How to Choose Your B2B Segmentation Strategy

What is B2B market segmentation?

Let’s use an example for this one — you are a SaaS company providing cloud software for customer communications, and you are reaching out to Company A and Company B with the same proposition.

Both companies fit your profile — they are larger enterprises with over 1000 employees providing customer service to big volumes of customers. And yet there can be significant differences that you might not have considered:

  • Decision-making unit. Company A might have an IT support team who can make buying decisions all on their own, with the IT Admin in charge of software acquisitions. Meanwhile, Company B has a rigorous process of choosing and implementing new software. The product might go through a few people like the IT Admin, Chief of Business Development and Financial Director before the decision is made and the contract is signed.
  • Future strategy. Company A might be on the market actively searching for new solutions, meaning they will be more receptive to a marketing campaign, whereas Company B is settled with existing software and will need nurturing.
  • Their spending budget. Your product might be the best product on the planet, but ultimately it will not matter if your prospects have not accounted for it in their yearly budget. While Company B might leave room in their budget for innovations, Company A can be on a strict spending schedule. These habits also need to be taken into consideration.

As a result, your marketing campaign results are scattered and inconclusive because chasing two different leads will get you none.

In order to avoid these issues and create a more personalised approach to each company, forward thinking businesses are employing different B2B segmentation strategies.

Why should you use a B2B segmentation strategy?

  • Optimised targeting

As we’ve discussed, not all business opportunities are created equal. Some prospects might be more relevant to you than others, some are harder or easier to sell to.

Segmentation helps to identify which customers are the most attractive and create a profile of an ideal customer (or a few) which in turn will personalise their experience and enhance customer relations.

That way you can create categories through which to sort your prospects (location, language, seniority etc) and prioritise certain segments for different parts of your campaign.

  • Personalised marketing messaging

One of the menaces of an unsuccessful marketing campaign is scattered, unfocused and unpersonalised messaging.

Personalisation is really key to great marketing (and it is one of the most influential trends for 2021!)

There’s nothing worse than a copy that says everything and nothing at the same time.

Instead of wasting your efforts on a bunch of small fish that will not be receptive, focus your marketing around a few key concepts, painpoints and solutions that only this target audience could relate to.

Creating a marketing strategy for a specific high-profile audience has proven to be not only more effective, but also much simpler.

If you know exactly who you are reaching out to, you can correctly guess their specific challenges and address them in a personalised way.

By avoiding generic language and speaking in their tongue, you can gain credibility and trust with your prospects, which really is the modern day currency in sales.

  • Perfect outreach channel

Finally, once you know exactly who your prospects are and how to appeal to them, you can find out where to reach them.

Not all prospects will have a presence on LinkedIn or social media, and not every lead’s contact info is publicly available.

It’s important to figure out the most effective campaign channel for each of your segments and, in some cases, it might even become the deciding factor in your segmentation strategy.

You can also use segmentation to consider different marketing approaches — would your prospect need nurturing? Would targeted ads be effective? How would I stand out with this messaging?

If you are having trouble putting your finger down on a single approach, we’ve created a helpful guide to major communication channels’ strengths and weaknesses.

What are the B2B market segmentation strategies?

Segmentation by organisation type (Firmographics)

Firmographics is one of the most common ways to go about segmentation, mostly because basic company information can usually be easily found online. As Tim J. Smith notes in The Wiglaf Journal, firmographics define target markets by grouping individual firms into segments along key variables.

Firmographics categories include:

  • Industry
  • Location
  • Company Size
  • Approximate revenue
  • Legal structure

Using these criteria is one of the easiest approaches to segmentation since it is extremely simple to verify and personalise. For example, you can use industry to segment into different marketing periods, try to conquer a new market or test a product in a new niche.

Approximate revenue will help you weed out companies that will have the buying power to invest in your product or service, or on the opposite, find businesses that seek to improve their revenue.

The location variable will most likely determine the language and the tone of your marketing messaging, as the way business is done around the world differs even if they use English as a primary business language.

Some companies will use company size as a determining factor, especially if their product depends on the number of employees or a company’s prominence on the market.

Another reason why firmographics are popular is that most automation software for automated cold emails or LinkedIn messages already include these categories as variables in the copy message, it makes marketing easy to personalise.

However, firmographic data can be quite generic and imprecise. Returning to our example of a customer service SaaS, one large retailer in the UK will not have the same needs as another such retailer in the same location.

Therefore it might be difficult to create truly personalised messages that are not informed by well-known general information. Such a campaign can lead to vastly different results.

Segmentation by decision making type

In any marketing strategy, even if you are speaking about the needs of a business, you are approaching real human beings and not companies.

Knowing precisely who in the company would be not only interested, but also have the decision-making power is one of the most effective strategies you can use for a campaign.

As individuals and workers, we also deal with different struggles and bear responsibility for different aspects of work. Knowledge of their exact job titles as well as who usually makes decisions will help you tailor the messaging in a way that would be relevant to each individual.

Coming back to the same example, Customer Experience Officer will not have the same incentive to try a customer service SaaS as a Business Development Manager, therefore the messaging must be tailored to their specific problems and reasons.

However, similarly to firmographics, job titles are just yet another cell in the database and will not inform you of the exact challenges and needs of a customer. Most of these conclusions will be deductions based on experience, however, a Head of Customer Success in Company A and Company B will still be two different people with differing needs.

Segmentation by profitability

Some marketers call the profitability category “tiering” which is a process of determining how well a business matches the goals of your company.

For instance, you can use customer tiering to segment customers based on how much revenue you can expect them to bring to your business during the duration of your relationship, or by how closely that customer matches your own sales and marketing strategies.

This type of segmentation places value at the forefront of your relationship with a potential prospect. Could this be a lifetime prospect? How much revenue could they bring in? What is the expected profitability of this company?

This strategy has several advantages.

First off, it allows you to allocate your resources more thoughtfully. Based on the company’s expected revenue (usually publicly available), you can choose whether to pursue this prospect with specific messaging or not. Larger companies are more likely to spend and scale, while smaller businesses would be driven by an incentive to grow.

Secondly, this type of allocation gives way to ABM (Account-based Marketing). After all, the mantra of ABM is chasing the big profitable whale, rather than going after a lot of small fish.

However, like all those strategies that utilise numbers on a screen or data in Excel cells, you are playing a game of guesses. Educated guesses usually, but unfortunately they don’t reveal your potential customers’ real desires.

Segmentation by needs and attitudes

This is the segmentation strategy popularised and perfected by B2C marketing approaches.

Recently, many businesses have adopted so-called ‘psychographic segmentations.’ This approach segments organizations based on more subjective factors, such as:

  • Personality traits
  • Personal interests
  • Content interests
  • Business priorities
  • Pain points
  • Purchasing or product needs

Such a strategy was given the name of customer sophistication and it remains one of the hardest and yet more effective approaches.

Of all the methods of segmentation, this one allows for a very precise and targeted marketing campaign.

For example, if you are a cloud service provider and a site visitor comes to you through a blog post on file sharing, then you may determine that prospect needs a solution that simplifies file sharing. As a result, you might target that prospect with additional content surrounding that concept to help usher the user further down your sales funnel.

Whereas other segmentation methods are based on guessing, using customer sophistication allows for knowing.

For instance, it is a lot easier to develop messaging for something you know is true (e.g., ‘Price-focused’ segment) rather than shooting blindly in the dark because some of your clients were in the size bracket (such as a ‘small business’ segment).

However, needs-based segmentation has its drawbacks.

Mostly it can be challenging to gather this information in the first place. Unlike firmographics, psychographic segmentations are not pooled together in an easily accessible database. Behavioral data can often be limited and not every prospect will want to participate in a short survey without a proper incentive.

Segmentation by behaviour

This was touched on briefly previously.

Firmographic and psychographic segmentations focus on who a customer is, but behaviour will tell you how they act. You can use criteria like these:

  • What they have purchased
  • Their spending habits
  • The channels they use to interact with you
  • The content they have consumed

For example, you can create custom messaging and a personalised approach to the segment of leads who have signed up for a specific webinar or those that downloaded your white paper.

Behavioural segments, in theory, provide the best of psychographic and firmographic segments without the drawbacks.

  • Like psychographic segments, behavioral segments give sales and marketing teams unequivocal guidance about what buyers want, making it easier to build strategies.
  • Like firmographic segments, behavioral segments are easy to identify in a database (as long as that database contains behavioral data.)

However, behavioral data tends to be limited in scope. You might be able to track some interactions with your products and content online, but you can’t gather information about offline behaviour.

Also, behavioural data only tells you how a prospect has behaved in the past with no insight into the future or even the present. You might know what someone did but not why. While the data gives considerable grounds for an educated guess, it might still be a miss.


The recurring theme running through all of these B2B market segmentation strategies is knowing your potential customer and personalising the buyer journey.

While in B2B marketing focus is obviously a relationship with a company, one should not disregard the individuals that comprise a company. Personalisation and building a trustworthy relationship with a prospect is key to making a successful sale.

Market segmentation strategies only help you find a way to that particular prospect. Whichever path you decide to take on depends on your and your business’ needs.

B2B relationships are evolving; going digital does not mean an impersonal approach, but rather the ability to personalise, and target, with precision. Market segmentation allows your B2B business to deliver the best, both online and offline, and keeps your customers satisfied within an ever-changing market.