All related (27)
Morgan Molnar
Director of Product Marketing, Momentive | Formerly SurveyMonkey, NielsenMarch 21

There are many ways you could segment your market for your marketing and sales motions: from industries to personas to company size to geographies (and for B2C companies, major demographics like age, gender, etc come into play). The questions you need to ask are "Do these groups of customers have fundamentally different needs for our product?" and "Would we acquire these groups of customers in different ways?". Wherever the differences are greatest, you'll want to start there.

Another key consideration is resourcing: do you have enough people to create focus areas among your marketing/sales/post-sales teams? Do you have enough bandwidth to create personalized messaging and campaigns? Do you have sufficient budget to split paid campaigns into different segments?

Market research data or industry reports may be able to tell you what some of the largest groups are that you should go after, but you'll also inherently start to learn this when you start running marketing campaigns & selling.

For example, it was immediately apparent to our sales team that institutional investors (hedge funds, equity analysts) spoke about research differently and had different objectives than insights and marketing professionals. Then we started to notice that B2B SaaS companies had different research challenges targeting niche groups of professionals than consumer goods companies doing research with the general population. As our teams scaled, this is where we made distinctions and split up our sales and marketing teams into "pods" to focus accordingly. Market research will come into play again when we need to make a strategic decision for which vertical to take on next and how to position ourselves differently.

It's also worth noting that you may use a totally different framework for customer segmentation to structure your post-sales teams. For example we have segments for self-serve vs sales-assisted customers. Self-serve customers are segmented by subscription type, and sales customers are segmented by spend level to determine the level of support/service they can receive so that our team can scale their efforts.

Alex Lobert
Product Marketing Lead, Creator Promotion, SpotifyMarch 15

First, it's important to know why you need a segmentation. Is it about go-to-market and creating more effective messaging? Is it about changing your channel / sales strategy? Is it about product development? Media Targeting? Once you have an objective or objectives, a method for segmentation often becomes more obvious. 

When thinking about messaging or product development, I often find it helpful to segment customers based on common needs. In B2B organizations figuring out what types of customers have common needs might mean talking to experts on your customers like sales people, doing desk research, or conducting customer interviews. In B2C organizations, this probably means interviews and / or surveys. 

Sometimes a behavioral segmentation is the right tool. Especially if you are trying to cross-promote or upsell products, you may want to segment customers - and in-turn your strategy - based on how they interact with your products. 

Finally, demographic segmentation is useful because it's usually easy to understand and action on. It's rare that demographics are all that precise (all Millennials don't do anything as we all know), but you can easily make decisions that are "pretty good" based on this type segment. Plus demographic segmentations make for easy targeting in the real world given they are often observable characteristics of people or businesses. 

PS. don't forget to take a look at how others in your industry / adjacent industries have segmented customers. Even if you are creating a new category, there are likely people you can learn from / build off. 

Matt Kaufman
VP of Marketing, QualiaSeptember 15

This is largely industry specific. Definitely research your market and listen to the data. An extremely important data point that should come your way is from your sales motions and how your plays work with each audience. It's important though to resist the tempation to over segment - that's a rabbit hole that is hard to get out of.

In a vertical marketing strategy the most basic of segmentation comes from which audience in the ecosystem you're speaking to. The most basic example would be if you're marketing a Marketplace you'd segment based on Buyers and Sellers.

However, segmentation gets a bit more complex once you're focused on a specific audience. In B2B vertical marketing there could be several factors that come into play including but not limited to size of account (SMB v. Enterprise), regionalization (often relevant in highly regulated industries), and account maturity (new v established business). 

It's important to keep in mind your goal around segmentation: accelerate sales. I've found the most valuable information to base segmentation strategies on are looking at your time to close and win/loss rates based on a prescribed set of segmentations you believe may be influencing your deal cycle. This data will also only be as valuable as the inputs you have on the accounts that you've worked with. In other words, make sure your enrichment and data hygiene are done consistently and are top notch to get the most actionable insights. 

Once you've been in market for a sufficient round of deal cycles you should be able to identify patterns for how your current marketing and sales plays resonate with a specific groups based on the data you've gathered, and where it's failing (the anecdotal information from your sales partners will support this as well but may be highly influenced by reps who can make compelling cases). I recommend taking both those quantiative and qualitiative inputs to determine tests on where you could increase w/l rates and deal velocity and start experimenting. In the end, your segmentation will likely not only modify your marketing but could also drive how your various teams are organized.

Sonia Moaiery
Product Marketing, Intercom | Formerly Glassdoor, Prophet, KraftMay 3

I believe the best way to segment your market is to do initial high-level qualitative interviews to get a broad understanding of the market, followed by a robust quantitative segmentation, and then follow up with in-depth qual with what you believe are your priority segments.

A quantitative segmentation leverages a cluster analysis that considers:

  • company/customer demographics and technographics (size/industry/revenue/region etc.)
  • Attitudes - how they think/feel/pain points and perceptions of you and your competitor set
  • Behaviors - what they do, how they buy, purchase journey (self serve vs. sales assisted)

Many companies will just segment the market based on #1.#1. But, #2#2 and #3#3 are critical. A cluster analysis of all three factors allows you to find groups of similar customers based on the smallest variations. A large-scale survey across geos (sample sizes of 600-1000, depending on the market) will generally include a discrete choice model that forces participants to make trade offs between attributes or features so you can really pull customers apart based on what they value and not just their demographics or technographics.

Once you have a sense of various clusters/segments and what defines them and how they differ, you can internally align and workshop which 1-2 segments are your targets and are priority. Your segmentation survey should help you understand not only the segments but also what is your company’s differentiated value (what can ONLY you do for customers that competitors can't) and what types of companies really care about that value (what characteristics do they have in common). Once you’ve identified the priority segments, you can move on to learning about the specific personas inside those orgs.

With segmentation keep in mind that your goal is to be more targeted in prospecting to support sales and marketing, and also give Product a north star for who to build for. So at the end of the day the end output has to allow marketing to change who they target and with what message and for sales to get higher quality leads as a result. If your segmentation can’t provide that, it’s a big investment to make!

Abdul Rastagar
GTM Leader | Marketing Author | Career Coach, May 7

Data should always inform decisions, though it’s OK to supplement it with some qualitative insights driven by observations of market trends. It’s not good enough to simply let the most senior person define the segmentation. Segmentation is relatively easy if you are focused on one specific vertical but gets much more complex for companies that serve across horizontals. This is where the value of data comes in to drive your decision.

Mary (Shirley) Sheehan
Group Manager, Engagement & Retention Campaigns, Adobe
I answered this in a similar post - see it here: https://sharebird.com/can-you-outline-the-best-structure-and-format-for-user-personas-that-are-useful-across-the-org