B2B Market Segmentation Research: Real Buyers vs. Imaginary Friends
How much guesswork is involved in your B2B market segmentation strategy? Are you building products for an imaginary buyer? In the B2B tech sector, this happens more often than you would think.
Change Your Tactics To Sell To the Little Guy
For example, one of our SaaS clients is very successful at selling to human resources (HR) buyers in enterprise organizations. But when they tried to launch a product targeting small and medium businesses (SMBs), it fell flat.
What went wrong?
B2B market segmentation research revealed several issues. In its move down market, this company held assumptions of SMB buyers that didn’t match reality.
For instance, messaging that worked with dedicated HR roles in enterprise companies failed to resonate with HR roles in small companies. HR tended to be a part-time job in small companies, so their priorities were different. Enterprise companies craved the latest features, but small business HR staff cared more for ease of use. Finally, complex pricing models designed to meet the needs of large companies failed to entice small businesses that wanted a simple bronze, silver, gold pricing model.
These are the kinds of insights B2B market segmentation research can provide. You’ll be able to identify who your buyers are, what kinds of buying criteria they have, and how you can adjust your messaging to reach them.
Do Your Market Recon Before You Land On Foreign Shores
We often find that companies struggle to market effectively to B2B buyers in new geographic locations.
For example, one of our clients sells a solution that provides secure collaboration and file sharing for mid-market and enterprise organizations. Solutions of this type need to meet compliance and governance needs that may vary. Consider how German, French, South Korean, and US users all face different compliance standards. As a result, our client not only needs to provide solutions for different standards, but know how to sell to each foreign market as well.
B2B market segmentation research can help an organization like this navigate geographic mismatches before they plant a sales team in a new country. Market segmentation research can also direct companies to develop features and capabilities that align with the needs of each geography.
Skid Hazard: Shifting Marketing Segments
Don’t forget that the B2B tech landscape is constantly evolving…which means your buyers are too. If there has been a major shift in the marketplace, don’t assume your market segmentation research from a few years ago is still relevant and correct.
Consider how the role of system administrators has changed over the last two decades. Where system administrators used to be the primary buyer of IT solutions, today, buying power has shifted to the business group. Nowadays, the main requirements to implement a SaaS app are business smarts and a credit card rather than the deep technical wizardry that was necessary in the past.
This shift turns the system administrator from a buyer to an influencer. Conversely, the business user, while rightfully ignored in past messaging, now becomes the main buyer persona to be persuaded.
Industry Context Matters
One key challenge with market segmentation research is that it’s not a census. No one in the private sector has the budget to run a census of an entire country, industry, or company type just to determine product-market fit.
With any market segmentation project, you’ll have to make some early decisions so you can focus your research spend. Here are just a few:
- Which markets should be surveyed?
- How should these markets be defined at a high level? (Enterprise, SMB, geography, industry, etc.)
- Who should be surveyed? (Specific roles, titles, functional areas, etc.)
- Which markets should be in/out of the first survey?
The best way to make decisions like these is to have a research partner who understands your industry and your buyers from the start. Only then can you get started quickly and have confidence that you are on the right path.
Don’t wander through an unfamiliar market segment and wonder why your efforts bear no fruit. B2B market segmentation research can help you map a path that leads to future sales.
This article is brought to you by Cascade Insights. With B2B-focused market segmentation research, Cascade Insights helps companies eliminate guesswork and focus on profitable opportunities in the B2B technology sector.
Special thanks to CEO Sean Campbell, President & CTO Scott Swigart, Director of Systems Design Philippe Boutrous, Director of Research Operations Harrison May, and Research Analyst Christopher Boll for advising on this article.
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Brian Surguine
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Sean Campbell
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