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May 19, 2022

B2B Audience Segmentation: How to Get Started and Evaluate Your Strategy's Success

By Chantel Hall, Marketing Content Specialist

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Reaching the right people with the right message at the right time is the foundation of all marketing efforts. The first piece — reaching the right people — requires an in-depth understanding of your buyers, their goals and pain points, and how they're unique from each other.

 

Marketers have reported revenue growth as high as 760% from segmented email campaigns.

-Campaign Monitor1

 

Audience segmentation allows you to filter and break up your audience into distinct groups so you can make messaging more targeted. B2B audience segmentation is essential for paid efforts and email marketing, but without an understanding of your audience and a continual effort to improve your segmentation strategy, many of your marketing efforts will not perform well.

B2B buying decisions are made by a group, but each stakeholder may require different messaging. For example, a decision-maker on the financial side may want to hear about the ROI of your solution or how it will affect their bottom line; alternatively, a decision-maker on the technical side may want to hear about how easy the solution is to implement. Because messaging may be different for each group, audience segmentation allows marketers to test what works with each.

 

32% of B2B companies replied that the most common reason prospects drop out of the pipeline is they do not get buy-in from all decision-makers.

-Ironpaper, 2021

 

Furthermore, leads are 26% more likely to open emails with personalized subject lines, and marketers have reported revenue growth as high as 760% from segmented email campaigns.1 Segmenting your audience and personalizing messaging to their unique needs will make your marketing efforts more successful and help you build meaningful relationships with leads and prospects.

Ironpaper can help you target and convert the right audience with account-based marketing. 

How to approach B2B audience segmentation

There isn't one perfect method of segmenting your audience that works for every company, and a successful segmentation strategy requires informed experimentation and research. However, a successful segmentation strategy is built on three key pieces.

First, you must understand your buyers, goals, and pain points. Without a thorough understanding of your buyers, you can't group and segment them in any meaningful way.

Second, you need to know who is visiting your site and interacting with your marketing efforts. Are they in the industries you want to reach? Are they decision-makers? Are your marketing efforts connecting with the people you consider your target audience?

Third, set specific goals for each campaign. Without goals to compare conversions and lead generation against, you won't be able to quantify the results of your audience segmentation and continually improve upon it.

If you're segmenting your audience by companies, you might segment by:

  • Specific companies (especially for ABM campaigns)
  • Company size
  • Company location
  • Company industry

If segmenting individual leads, you might segment by:

  • Job role/title
  • Lead's decision-maker status
  • LinkedIn member groups/skills

Finally, your segmentation strategy should expressly exclude the companies and leads you don't want to see your marketing. Exclusions help you avoid watering down your metrics and spending part of your budget on leads you know won't convert, such as non-decision-makers, people in the wrong job roles or level of seniority, and leads in industries that aren't the right fit for your solution.

In the end, your understanding of your buyers will make or break your segmentation strategy. 

How big should your audience segments be?

There's no magic number for B2B audience segmentation, and focusing too much on reaching a specific audience size takes your attention away from whether your segmentation strategy is helping you achieve your marketing goals. Instead of focusing on reaching a specific number or audience size, focus on continually tracking and refining messaging to each audience segment based on its performance. 

1. Start broad: When developing a new audience segmentation strategy, start with a wider audience than you think you might need. The bigger your audience is, the more you can run tests and refine messaging and segmentation. 

2. Let the data guide you: On a daily or weekly basis, look at who is interacting with your campaign and following through on the actions you want them to take. Use that data to include or exclude people or businesses or further segment your groups. 

Focusing on a smaller ad spend and continual refinement instead of reaching a specific audience size will help you learn from the available data and create audience segments that enable growth.

How do you know if you've segmented your audience correctly?

The most important outcome of audience segmentation is that your messaging is getting in front of viewers who are most likely to convert to a lead or customer. Segmentation should help you nail the "right people" piece of reaching the right people with the right message at the right time. 

If your audience segments aren't helping you generate qualified leads or improve conversions, you need to reconsider how you've segmented your audience. The examples below illustrate how you can address issues with your audience segmentation and improve conversion rates by adjusting your segmentation strategy.

Problem

Solution

I'm getting too much interaction with my ads from people who quickly drop out of the process or aren't interested in our solution.

Your audience segment includes leads and companies that aren't in your target market. Look at these leads' demographic and firmographic information and exclude them from your audience segments.

I'm targeting two primary industries with a campaign, but only one of them is responding despite the non-responsive industry being a strong revenue generator for my company.

Your messaging for this audience segment appeals to one industry but not the other. Break this audience out into two segments along industry lines and target your messaging to each industry.

My campaign is attracting a lot of leads from the right industry, but they aren't decision-makers in their company, so they drop out of the funnel quickly.

Your segmentation is targeting the right industry, but not the right leads within that industry. Exclude non-decision makers based on their job titles and experiment with including different job titles and seniority levels to uncover who the decision-makers in this industry are.

An audience segment is performing poorly, and further segmenting would exclude almost everyone in our target audience.

You may have started with an audience segment that's too small. Broaden your criteria and then begin refining your audience based on the data the larger segment generates.

I'm getting a lot of interaction from a group of leads I didn't expect and was planning to cut out of this audience segment eventually.

One of the benefits of starting broad is finding lead sources you didn't know about before. Track these leads throughout the process to find whether they turn out to be fruitful and, if they are, segment them into their own audience and create messaging targeted to them.

 

Successful B2B audience segmentation is a process

Segmenting your audience isn't a set-it-and-forget-it task. Marketers must approach segmentation with an experimental mindset and use data to make decisions around refining or broadening segments, iterating messaging, and developing targeted campaigns.

Sources

1Campaign Monitor, The New Rules of Email Marketing

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