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Approaching Psychographic Segmentation In B2B Marketing

As marketers and entrepreneurs, we sometimes get ourselves into a pickle trying to maximize conversion for every kind of customer. However, we all know that a better long-term strategy in converting more customers is to engage in practices of segmentation – like psychographic segmentation for instance.

Creating general campaigns usually works in the beginning; it helps set the standard for your selective segmentation as times goes by. It allows you to open new markets and identify potential customers for your business. This article aims to open new areas in segmenting your customers.

Instead of looking at income brackets, we will be looking at emotional factors that affect decisions and how we can group these factors proper in ensuring that conversion is highly likely.

 

The Importance of Segmentation

Businesses run on efficiencies and the more efficient the company, the better it is likely to perform. Segmentation allows you to focus your marketing resources on particular segments of your overall market that are more likely to buy from the company.

For instance, if you were to release an expensive line of your product – let’s say a more bespoke level of internet marketing services, it will generally appeal to parts of your market share that have a higher propensity to make money. It is also implied that those who make a smaller amount of money would not even consider these services.

However, how about if the real kicker in this product or service is the emotional appear for instance? Imagine that you can get any income bracket to purchase the upsell if it is packaged in a way that appeals to the emotions. For example, you can sell it as a product that safeguards their business’ success in the future. What sort of idealistic B2B client would not want that? That goes beyond income brackets.

 

B2B versus B2C Customers

B2B and B2C customers differ in a variety of ways, B2B relationships tend to last longer and create more repeat sales than B2C relations and, as a result, there is more focus on the relationship that you have.

B2B relationships tend to last longer and create more repeat sales than B2C relations

The personal relationship is one of the factors that drive the sales process. You are talking about complex products and services with real long-term purchase periods, and that is why there is a mix of different factors that drive the sale.

Also, there is the rationalization factor because B2B customers do not make impractical decisions compared to B2C customers that can make decisions due to impulses. However, this does not mean that there is no emotional component in B2B transactions, when in fact psychographic segmentation is partly the analysis of the emotions that could be associated in a B2B deal.

Related: The B2B Buying Process Has Changed: Here’s How Not to Get Left Behind

 

The Beauty of Psychographic Segmentation

Psychographic segmentation goes beyond the typical social and economic demographical factors that we have studied as marketers. It involves the careful analysis of the behavioral factors that influence a decision for a potential or current B2B – and B2C customer.

Psychographic segmentation looks at factors such as the emotional responses that cause a specific buyer from a particular demographic to make a buy decision towards your product or service. It involves data collection and fine tweaking particular campaigns to elicit certain emotional responses that could be highly beneficial to the company.

This is a more complicated process than trying to find out the geographical demographics of your customers because we are looking for emotional responses that we can quantify and use for our benefit.

Related: Industry Insights: How to Influence Today’s B2B FinTech Buyers

 

How do you go about Psychographic Segmentation?

In the example above we talked about a new product in an Internet marketing service that is priced higher than usual because of its custom/bespoke nature. However, we have failed to take into account another kind of customer there. How about those that do not fall into the same income bracket, but are willing to spend more on their Internet services depending on the emotional stimulus that you would attach to your campaign.

Psychographic segmentation involves a lot of data gathering with your current and potential customer base because you are trying to find that particular behavior that elicits a specific response. Also, we have to take into consideration that customers differ from one another, and what could work for some could be different for the next batch.

A useful way to go about this is to get your CRM software prepped and ready for your data. We are trying to analyze the personal and professional lives of your current and potential customers. We are looking at what makes them tick and what the factors that dominate their decision-making process are.

Related: Industry Insights: The 5 Types of Buyers You Meet in Cloud Selling

 

In reality, segmentation is more than how much money people have in the bank and how old they are. It is the process of analyzing emotions, responses, and behavior. This makes your marketing campaigns more effective and efficient.

 

Author Bio:

Rebecca Matias

Rebecca Matias is a Business Development Manager at Callbox. She is a proactive marketer who is willing to share her passion, leadership principles and craft in marketing. Follow Rebecca on Twitter, Facebook, and Google+.

 

 

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Why Customer Profiling Could be the Best Investment your Company Makes

What is Customer Profiling?

You have a business, and chances are, your business offers various products and/or services that cater to different kinds of customers. Now, it’s convenient to just use the blanket marketing plan, the one-size-fits-all approach, where all marketing efforts are directed to the general target market. But convenient and efficient are two different things, and among the two, it’s the latter that gets you the ROI. So what do you do?

Here’s the thing: Business is like a game

Let’s say it’s a basketball game. Your goal is to win as many games as possible, maybe become the champion. In order to do so, you prepare for your opponent – in this case, your market. But you don’t have just one opponent all season long – there are plenty of them, each bringing to the court a different kind of style, the same way that the market is made up of different kinds of customers, each with different attitudes. So what you do is classify your opponents according to some criteria and prepare a different set of plays for each kind of opponent in order to defeat them.

That’s customer profiling. It’s creating a specific portrait of your customers so you can craft a marketing strategy that best attracts them.

Why is it a Good Investment?

Again, it’s all about knowing the “enemy”, and your “enemy” here, the one you’re trying to win over, is the market. How can you fight and win if you don’t know who you are fighting, right? When you do this, you can prepare before the “game”, which is of course, better than adjusting on the fly.

Customer profiling is not just crucial to business — it may sometimes even make or break a business. Here are the benefits of customer profiling:

  • Grows Revenue from a Segment – on a micro level, you can focus your marketing efforts on a specific segment of your market 
  • Provides Structure to a Marketing Plan –  your team would understand what the ideal customer is looking for, what matters to them most and how best to speak to them
  • Helps You Discover (other) Market Potential – an accurate profile of your customers allows you to see other market opportunities
  • Improves Targeted Marketing – customer profiling allows you to direct your marketing efforts to those who are most likely to purchase your products

Related: Better Business Decisions by Enhanced Customer Data Analysis

All these will:

  • Improve Marketing ROI
  • Reduce Direct Marketing Costs
  • (Possibly) Introduce New Products/Services
  • Save you money across the board 

How to Effectively Profile your Customers

Here are the Five Criteria Used in Profiling Customers:

Demographics: Common demographics to consider include age, sex, ethnicity, occupation, education, marital status, etc.

Geographics: Where are your target customers? You can find your ideal customer by country, region, state, city, and so on. If you have several branches and are looking for customers close to a particular store, segmenting by geographic location is a non-negotiable.

Life Stages: People’s buying habits are influenced by which life stage they are in – a teener’s choice of clothes or services couldn’t possibly be anywhere similar to that of a retired teacher.  Dig deeper into your demographics category and group ideal customers by which stage of life they are in.

Psychographics: Group together customers with shared interests, lifestyle choices, attitudes and similar mindsets.

Behaviors: You also have to know what motivates people to buy your product or avail of your services. Why do they want it? How often do they want it? Understanding how and why customers do what they do is important.  Use CHAMP Methodology: Spot on Sales-Ready Leads with These Questions

Of course, let’s not forget the kind of industry you are in. Obviously, a business-to-business company should have a different approach compared with a business-to-consumer company.

Related: How B2B Marketers Craft an Industry Related Content and Get Leads from it

B2B

If you’re a business-to-business outfit, then you would need to know:

  • what department your customer belongs to
  • whether they’re predominantly male or female (or a mix)
  • how old they are
  • what budgets they might have
  • what challenges they are likely to be facing that your product or service could address
  • what reasons they might have for buying/or not buying your product/service

Related: The Problem with (and Solution to) Database Decay

B2C

If it’s a business-to-consumer outfit, you’d need to know:

  • their age, sex, salaries, and spending habits
  • the sorts of products and brands that would appeal to them
  • how they like to shop or be approached
  • what they might read
  • where they might go

Related: Customer Profiling Checklist in Verifying Business Contacts

Conclusion

Knowing exactly what type of customers you want to sell your products to makes marketing a whole lot easier. And it doesn’t hurt that it will increase your chances of hitting that ROI, too. With a complete and accurate customer profile, you can now tailor your marketing strategy to the specific customers you want to attract.

Let us know what you think so we can help others. Your comments are welcome!

 

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