The complexity of data can't be understated. The complex world of data is due to the unending volume, and types there are. For example, one of the most common types of data vital to the growth of a B2B company is firmographic data. Hence, as a business owner or data analyst, it becomes imperative to understand firmographic segmentation.
As with other data types, firmographic details play a critical role in marketing, sales, and advertising. Data collection is all about deeper and accurate insight; firmographic segmentation aims at the same. Hence, in the fewest words possible, let’s explore this data type and the impact it can have on your business.
What is Firmographic Data Segmentation?
As a B2B company, firmographic data can put you ahead of the competition. Firmographic data is the information type that describes and categorizes other organizations you provide with products or services.
The firmographic data details include geographical information, organizational type, numeric clientele details, technology, etc. Further in this piece, we'll explore the core factors of firmographic segmentation.
Like other data types, you want the firmographic data you collect to be as deep and insightful as possible. A rich data bank gives you competitive intelligence at the very least.
Summarily, firmographic segmentation is the process of classifying business-to-business customers based on certain tags and attributes. Thanks to firmographic segmentation, your company can target customers with specific ads. Targeted ads have a higher chance of returns.
Firmographic data is for B2B companies, while B2C companies target people using demographic data.
Understanding the Core Factors of Firmographic Segmentation
Variables and factors used in firmographic segmentation are numerous. However, we’ll take a look at some of them, so you can better understand the context of this vital data concept.
The ‘industry’ label is used in firmographic segmentation to classify companies based on what they do. The determinant of a company’s industry is the product or service they offer. As a B2B business, it's important to target the right industry. Working with companies in industries where your product or service fits can skyrocket the returns you get.
Through proper firmographic segmentation, your business can also easily service different industries. For example, when your clients have categorized accordingly, you'll have no problem serving both the agricultural and fashion industries, despite the contrast in their needs.
Location is also common as firmographic data. As a firmographic segmentation factor, location involves resident cities, countries, climate, culture, continent, etc. A consumer's location can determine if your product will make sales and be appreciated. You need to understand the terrain in the different locations your business is based on to maximize it.
The two main elements of company size are revenue and employee count. Understanding your customer’s financial state helps you place your product in the affordability range for them (if it still profits you).
The US small business administration says that companies with less than 1500 employees are termed as small businesses. Thus, the employee count of a company reflects the company's position.
Sales Cycle Stage
It’s important to know where a lead is in your sales funnel cycle. The extent to which you’ve gone with a particular client in the sales cycle determines the type of information you share. You must recognize and categorize based on if the potential client is at the; awareness, consideration, or decision stage. Understanding these stages will help you choose your marketing words carefully.
Other factors of firmographic segmentation include; performance, executive title, performance, ownership framework, Growth trends, potential buying power, and departments.
Importance of Firmographic Data Segmentation to Your Business
As a business serving other businesses, you can’t slack on your data collection process. For instance, you can leverage firmographic data from core signals to understand your clientele better. Here are reasons why firmographic segmentation is vital to your business.
Improved Market Targeting
Marketing without data is like scattering your seeds into the air; the chance of reaching the right people is low. However, when you understand your target audience in-depth, you'll reach them exactly where they are. As a result, the ratio of returns to effort becomes higher.
Improved Customer Service
Customers want the best service possible. Your competition is most likely offering the same quality of service and product as you. Hence, the main differentiating factor your potential customer will use is experience. The more firmographic data you have, understand, and leverage properly, the better.
More Sales Potential
When you understand the current situations in your target customers' companies, you can make sales irrespective. Whether the company is growing or downsizing, you can still make sales when you play your cards right. These realities, as you'll expect, require different approaches. For example, when a company is currently downsizing, they'll need products and services that are cost-effective but with the innate ability to scale once revenue is back on track.
As a business owner, you have to be tactically aware of the different situations.
Like B2C businesses, B2B customers also want to get personal with products and services. Personalization of service and product experience is what will get you the market share you desire. Understanding the customers thoroughly is the first step in the right direction. Hence, firmographic segmentation.