B2B Market Research Case Study
“Circle are experts in B2B research and segmentation”
From its headquarters near Geneva in Switzerland, Global Blue offers a range of services which help retailers to increase their revenues from the lucrative international traveller market by offering VAT refunds. Having introduced the concept of Tax Free Shopping over 30 years ago, Global Blue now works with over 270,000 of the world’s favourite retailers, shopping brands and hotels in over 40 countries.
The Research Project
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.
To develop an alternative approach to segmenting the market, Jorge Casal (Global Blue’s Senior Vice President of Tax Free Shopping) invited several research agencies to pitch their approach and ideas. B2B specialists Circle Research emerged as a natural choice for this strategically important project. As Alexandre Vukanovic (Product Retail Manager) who subsequently managed the project explains: “Circle are experts in B2B research and segmentation. This helped to bring credibility to the project and was a very strong deciding factor for us.”
Circle’s previous experience of undertaking B2B market segmentation has identified a number of factors which often help to explain B2B customer behaviour. Using these factors as a starting point we developed a hypothesis about what drives retailer behaviour.
We then held a series of workshops with Global Blue, to test and flesh out our hypothesis. This step also ensured the buy-in of the Country Managers – a key audience that would be instrumental in implementing the new approach to segmentation.
The next stage involved carrying out qualitative research amongst Global Blue’s customers. This was designed to fully explore the drivers of customer behaviour and identify the different segments in the market. In total, more than 50 in-depth, hour long interviews were held with Global Blue customers in Austria, Finland, France, Germany, Italy, Singapore, Spain and the UK.
Care was taken to ensure that a wide mix of different customer ‘types’ were represented in these interviews so that all possible behavioural motivators were identified. For example, we specifically targeted a range of job roles. Financial directors whose primary interest is often the financial contribution from Tax Free; strategists who are concerned with growing the Tax Free business and developing a proposition that will achieve this; and store managers or owners, who are more interested in what point-of-sale support Global Blue can offer them.
The findings from this stage of the project clearly supported our view that the primary drivers of segmentation were not only firmographic, but were largely defined by retailers’ attitudes towards Tax Free and their requirements from a Tax Free supplier. It resulted in a provisional segmentation model and identification of several distinct customer segments.
We then moved on to further develop and substantiate our view via a wider, global quantitative research study carried out online. This allowed us to see if the provisional segmentation model held true across a wider range of countries and amongst a much larger group of customers. The survey invitation was preceded with a communication from Global Blue to ‘warm up’ respondents, and was carried out using our sophisticated online platform. This includes features which enhance the respondent experience, such as mobile optimisation. The result was a strong response rate and highly reliable base from which to draw conclusions.
Finally, we added information from Global Blue’s internal systems into the mix (e.g. sales data) and applied a statistical technique known as Cluster Analysis which sifts through survey data and finds patterns in how people are answering. These patterns identify the different segments in the market, size them and place each survey respondent into one of them.
The Key Findings
We identified several distinct segments – groups of customers who shared notable similarities in their needs, attitudes and behaviours. These segments were then cross-analysed with firmographic information to allow them to be more easily identified in real life and effectively targeted.
“We ended up with a number of customer segments and a clear cut description of who they are, what they need and so on” explains Alexandre. “The first very big value that we got from this segmentation exercise is that we realised some services were requested across all segments, and some services were very specific to individual segments. This was a critical part of the findings.”
Because we had merged in Global Blue’s internal data we were also able to attach revenue and profitability estimates to each segment – invaluable knowledge when deciding which segments to prioritise. And to add a further element of ‘actionability’, we also identified a handful of ‘Magic Questions’ which if asked to any customer would immediately place them into one of the segments. This is an invaluable tool for sales teams operating on the ground and for those at Head Office seeking to profile the entire customer database.
The Ultimate Result
Our significant track record in segmentation research reminded us that a segmented view of the customer must be carefully implemented into an organisation if it is to succeed. After all, for many B2B organisations it’s quite a radical change from how customers have traditionally been viewed. We knew then that it was critical not to stop at the point where we delivered the segmentation model, but to support Global Blue in developing a strong internal communications plan, as Alexandre continues:
“When the research was complete we needed to package the findings and to ‘sell’ them internally. At this stage Circle partnered with our communications agency to come up with a way of expressing findings that would not be just accepted by one country but by many countries across the world.”
There were a number of dimensions to the internal communications strategy, but at its centre was a series of pen-portraits which brought each customer segment to life. Each pen-portrait included:
- Their beliefs, attitudes and behaviours in regard to Tax Free
- Their key drivers when it comes to choosing suppliers
- Their interest in different product types from Global Blue
- The marketing channels most effective in targeting them
- Firmographic details of where they are most and least likely to be found
Each segment was also given a memorable, descriptive name to help Global Blue’s staff to identify them and associate with them in a human way.
“Once we finalised the naming and the description of the segments, we presented these to our board in order to gain validation from the management. This was very important to do, in order to gain support for the next steps, both with the senior management and the sales organisation. Circle gave us some really good support here. This is critical if you want to move on with such a campaign, and is definitely something that we learned as part of the process.”
With a clear understanding of the different types of customer which they are aiming to support, Global Blue has now begun a transformation. It is moving from a ‘one size fits all’ approach to a much more targeted strategy. For example, specific marketing messages have been developed to resonate with each segment and a number of new product concepts which tap directly into the needs and wants of specific segments are in the pipeline.
Read more about our approach to business-to-business (B2B) market segmentation.