Targeting a business market segment can greatly improve you B2B business. But do you know what to look for in a business market segment? Do you know how to pick a business market segment with shared interests and common behaviors that make one group of businesses your best potential customers?

While the most common type of market segmentation for business-to-consumer companies is demographic segmentation, the most common type of market segmentation for B2B companies is firmographics. Thus firmographics provide the best starting place when selecting a business market segment.

Firmographics are facts about a businesses that help to group them into target markets, but do you know what firmographics to use in determining your best business market segment?

This article covers three broad categories of firmographics that provide numerous ways that you can select a specific business market segment to target. These include:

Select a Business Market Segment by Organizational Firmographics

Select a Business Market Segment by Financial Firmographics

Select a Business Market Segment by Industrial Firmographics

Using Organizational Firmographics To Select a Business Market Segment

The first organization firmographic to consider in selecting a business market segment is size. You separate potential business customers into sizes by considering how many employees they hire, how many plants, stores or branches they include at where they are located.

Size of the business can help you determine the number and type of people that will be involved in purchasing decisions. If the organization is large, you will probably have to deal with one or more employees, who are assigned purchasing decisions. If the organization is small, you are more likely to deal with the owner, who makes all purchasing decisions. Select the size that best meets your selling preferences and your ability to serve customers well.

Age distinguishes businesses in other ways. For example, young businesses need more help in choosing the right products and services for their businesses. They will respond best to marketing directed at helping them to make good decisions, rather than just selling to them. Older businesses are more likely to know what they need, but those needs may require customized products and services.

The geographic location of a business market segment reveals regional characteristics that influence businesses. In addition, each location has different tax laws, regulations, and economic environments that make businesses different by location.

Knowing these organizational firmographics can help you to select the business market segment with the best long-term profit potential for your B2B business.

Using Financial Firmographics To Select a Business Market Segment

Financial firmographics include sales volume, profits and market share. They can help the B2B business owner to distinguish businesses by whether or not they have the financial means to buy a product or service. Financial firmographics also identify a business market segment that’s sales volume demands more automated products.

For instance, if you sell an accounting system capable of handling thousands of transactions a day, a business with small sales volume is not in your target market because a simple, readily available, accounting program will handle its needs.

Ownership factors can also help you select the business market segment for your target market. You need to know whether the business leases or owns its office, plants, stores, warehouses, and equipment. By monitoring the relationship of ownership factors, you can determine relationships between these factors and the businesses needs and purchases.

Selecting the business market segment with financial firmographics that match you B2B business products and services can help you to target businesses most likely to become customers.

Select a Business Market Segment by Industrial Firmographics

Industrial firmographics provide another way to distinguish the best business market segment to target. Businesses differ in many ways according to the industries they operate within. Each industry has different standards, regulations, expectations, inspections, etc. that require different products and services. Determining which industry has the most need and desire for what you sell goes a long way to selecting your target market.

The following example illustrates how industrial firmographics influence what businesses need and want and what kinds of customers they will be.

Manufacturers differ in the equipment, components and supplies that are used in high-tech production compared to low-tech production. Their processes and facilities also differ.

Luxury market businesses need different production processes and buy different types of supplies than businesses who manufacture higher-volume, mass marketed products. Thus, one type will be a better potential customer for your B2B products than another.

A consultant is a business market segment in the information industry, but the consultant’s business is very different from a major book publisher. Consultants’ incomes are limited by how much they can charge for their time. Book publishers’ incomes are limited only by the number of books they can publish and sell.

By understanding how industrial firmographics influence business needs, you can distinguish the business market segment most likely to provide your B2B business, new and repeat customers.

In Conslusion

You can improve your marketing and sales by gathering as much information as possible about each business market segment, and relating each to your past sales.

Thus, you should keep records of all contacts with present and potential business customers. Then categorize those records by business market segments so that statistics can reveal the best way to relate to a specific business market segment.

You will increase your changes of selecting a profitable target market for your B2B business if you use records and research to make business market segment selections.