B2B Industry Segmentation
Written by Jay Shapiro for Gaebler Ventures
Recognising different industries needs will help you to sell more effectively. Most of us do the majority of our business in or two sectors. Know yours.
If you sell primarily to other businesses, segmentation is your friend. Why?
If you can accept that there are major differences between a school and a transport company then you should consider treating them differently when you try and sell to them.
First you should check your database of existing customers, you will almost certainly find that you do much of your business in one or two sectors; finance, manufacturing etc. Either your product lends itself better to these industries or the way you promote it works better there.
It is usual to find that 80% of your sales come from a very narrow industry grouping. If you find this to be true then you have several things you can do to increase sales quickly. Before you do that though the first thing you have to do is find out why these groups buy from you, you have to get out and talk to some of your existing customers and ask them:
- Why they bought from you
- What features of your product attracted them
- What needs did your product meet for them
Ask as many customers as you can. Then look for common themes in their answers. This will give you a good idea why companies in that industry segment are buying your kind of product and why they choose your company over your competitors. If you do this for the top three industries you sell to you should notice some differences in the needs your product addresses in each segment.
These needs are what you will use to attract new customers but as you see differences in the needs of different sectors you will need to plan your marketing better so that you can target those sectors more precisely, By producing specific marketing activities aimed at just the sectors you already do well in you can bring in low hanging fruit from those areas, you will find the sale easier because you have a ready source of references you can use in the same industry.
Your next task is to find industry segments that are very similar to the one you are having success in, ones with similar needs and who may accept customer references from your existing client base. If you have a few customers in these new segments it is time to contact them and ask them the same questions you asked above, then you can be more effective in targeting their needs in your marketing.
Now you have the process working and can see the benefits in terms of sales you can start deciding which are the next segments you will move onto using the same principles as above and choosing the ones who are most closely related to your existing base.
This stepping strategy allows you to make the most of your existing strengths and gives you a better chance in the new segments you are trying to break into. Keep a comprehensive customer database and include fields for industry, company size and products purchased. Then you can build your knowledge base as your company grows based on effective targeting rather than luck.
Jay Shapiro is a freelance writer based in the UK. Jay has a particular interest in the emotive aspects of the entrepreneur's character. "Alongside the nuts and bolts of business, the character of the person is often the ingredient responsible for success."
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