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B2B market segmentation research

Circle is an expert in B2B market segmentation research.  Through a programme of primary research we’ll:

  • Identify the different behavioural, attitudinal and needs based segments in your market
  • Size and value each market segment
  • Reveal the ideal proposition, positioning and message for each segment
  • Communicate the market segmentation in a way which your colleagues engage with and act on
  • Embed the market segmentation into your systems and processes

Over the last decade we’ve conducted business-to-business (B2B) market segmentation research for dozens of world-leading brands, such as Global Blue, Maersk, Premier Farnell and Vodafone.  We couple this extensive experience with a suite of smart research techniques which probe far beyond the superficial, and tools which bring the segmentation to life and embed it into your everyday processes.

The result is research which makes a real difference.

Our guiding principles

Over the last decade we’ve segmented the markets of dozens of world-leading business-to-business (B2B) brands.  Based on this extensive experience we’ve developed an approach which transforms how the target market is viewed and makes a real commercial impact.  Our approach to B2B market segmentation has eight key features:

  • Real: Market segments need to meet three criteria.  They need to be meaningful (grouped on dimensions that influence how you’ll approach them), distinct (each segment needs to be clearly different to others) and sizeable (each segment needs to be large enough to justify its existence).  Adhering to these rules creates a market segmentation which gives clear focus to commercial action
  • Art: The first step in any market segmentation process is to really get under the skin of customers through a series of qualitative research engagements. Beginning with this exploratory approach will ensure the final market segmentation model is based on the right foundations and can be brought to life with real-life examples
  • Science: It’s essential that, whilst guided by qualitative insights, the final market segmentation model is based on hard data as this gives a definitive view and allows segments to be sized and profiled.  In doing so, multiple data sources should be used as this ensures that the market segmentation reflects all the dimensions that matter – survey data on behaviours, needs and attitudes should be coupled with internal data on customers such as purchase history, spend and profitability.  Furthermore, spotting patterns in this data with the human eye is impossible, so it’s critical to use sophisticated statistical tools which identify market segments and profile them on multiple levels
  • Prioritised: Not all market segments are equally attractive – they differ in size, value, profitability and growth potential.  Identifying the commercial potential of each segment allows attractive segments to be prioritised
  • Actionable: This isn’t an academic exercise – once developed, a segmented approach needs to be used.  The biggest challenge here is changing how colleagues view the customer, especially if they’re used to a more straightforward feature based segmentation (e.g. based on company size).  As such, great care needs to be taken to get their buy-in to a new approach.  There are three critical steps in doing so.  One, they need to be persuaded that it’s a better way.  Two, segments need to be carefully communicated and brought to life so that they’re understood and recognisable.  And three, people need to be given the tools to use the market segmentation on a day-to-day basis
  • Findable: If a segment or segments are to be targeted then you need a way to find them.  To enable this, each market segment should be profiled using features which allow you to identify them in real-life, e.g. segment A is most likely to be found in the Healthcare, Manufacturing and Financial Services sectors
  • Embedded: To fully benefit from a market segmentation, it needs to underpin all of your activity.  Magic Questions are invaluable here.  This small set of questions can instantly place any individual into a segment with a high degree of accuracy.  These questions can be used in ‘real-time’ by sales staff and if embedded into your CRM can personalise your marketing activity
  • Flexible: Understanding similarities is as important as understanding differences.  Sometimes it’s not possible, or desirable, to tailor an activity to each segment.  In these situations a generic approach needs to be taken which has cross-segment appeal.  The market segmentation model should therefore identify common ground shared by all

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Global Blue

Like many other B2B businesses, Global Blue believes that the purchasing behaviour of their target market is largely influenced by their ‘firmographic profile’ – their size, their speciality, their home country and so on. However, examples of retailers behaving in unexpected ways, given their firmographic profile, led Global Blue to consider a different viewpoint. Are a retailer’s needs and attitudes not a far more powerful predictor of behaviour?

If this was the case then it had far-reaching implications. Product development should be driven by the needs of each segment, separate marketing messages should be tailored to resonate with their particular world view and sales teams should potentially be organised along different lines. This was an important and exciting revelation.

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