Prospecting is one of the most important things a sales team does, and finding ways for it to scale up is essential to growing a business.
But casting a wide net risks losing the personal touch that’s so important to closing a deal. Failing to identify what makes each lead unique will lead to wasted resources, missed opportunities, and stagnant growth overall.
Customer segmentation has traditionally been the domain of marketers, but it offers salespeople at companies big and small a way to scale up their prospecting efforts without just spamming cold leads. Done right, customer segmentation can also give you an iterative, data-driven method to improve what you’re doing and win even more customers over.
What is Customer Segmentation?
Sales prospecting and marketing are all about delivering the right message to the right person, personalized to their pain points and ambitions. If you try to do that at scale, you’ll spend your days researching every single potential lead to find maybe one in 10 that are worth chasing. If you try to scale up with no personalization, you’ll just end up spamming potential customers and ruining your brand.
Customer segmentation helps sales and marketing teams do personalized messaging at scale. It involves dividing your customer base into groups that share similar characteristics.
Some kind of segmentation is core to most B2B companies and can form part of your business transformation steps. If you’re selling telephone systems to businesses, you likely have different solutions tailored to different kinds of customer. One for big enterprise HQs, one that’s flexible for a startup with remote workers, etc.
But in this context, your customer base is formally broken down on factors like demographics, behavior, geography, and psychology.
- Demographic segmentation: Dividing your market into groups based on demographic variables such as age, gender, marital status, family size, income, occupation, education, religion, and nationality.
- Behavioral segmentation: Dividing your market based on consumer behaviors, including their knowledge of, attitudes towards, usage rate, and response to a product.
- Geographic segmentation: Dividing the market into different geographical units like countries, states, regions, cities, or even neighborhoods. This is vital for localizing ecommerce sites.
- Psychographic segmentation: Dividing the market based on personality traits, lifestyle, values, attitudes, and interests.
Importance of Adapting Segmentation Strategies
Customer segmentation has been transformative in the world of marketing, particularly in digital fields like ecommerce, email marketing, and social media.
Ecommerce platforms use customer segmentation to analyze data like buying habits and browsing history, creating personalized experiences that increase conversion rates and order value. Segmenting customers along similar lines can help sales teams to identify high-value prospects for targeted upselling, growing the ROI on sales efforts.
Email marketing uses segmentation to send personalized content based on anything from customer demographics, behavior, or lifecycle stage. This leads to higher conversion rates and lower unsubscribe numbers. Sales teams can use email segmentation to do personalized email outreach at scale, increasing the conversion rates on cold outreach. Trialing an alternative domain name for website content can have an impact on engagement from different audience segments.
Marketers will use all kinds of tactics from analytics to loyalty programs to predict which customers will have the highest lifetime value. In the same way, data-driven customer segmentation can inform lead scoring and retention strategies, allowing businesses to prioritize high-value leads similar to their best existing customers.
How Customer Segmentation is Changing Sales Prospecting
So how can adopting customer segmentation strategies make an impact on sales prospecting?
There’s a shift towards data-driven segmentation
Customer segmentation can enhance sales prospecting by creating data-driven buyer personas.
Segmentation rules allow businesses to segment customers based on various data points like spending habits, product usage, social media activity, and email marketing engagement. This data provides insights into customers’ financial capacity, influencing pricing strategies and new product development.
These insights also inform sales teams, allowing them to identify potential customers accurately and improve their customer relationship management efforts. In B2B contexts, this could mean understanding varying needs of industries, company sizes, and job titles.
Overall, a data-centric approach to customer segmentation significantly refines sales and marketing efforts. By utilizing customer segmentation software and harnessing available data, businesses can deepen their understanding of customers, boost their strategies, and enhance customer satisfaction (what is CSAT?) and loyalty.
Personalization and individualization
Customer segmentation is revolutionizing sales prospecting by enabling personalized experiences, even with some kind of automation involved.
Say a business offers enterprise communications solutions. Looking at VoIP phone systems, we see the main advantages are cost, ease of installation, and security. Which of those is most persuasive will depend on the customer. With segmentation, businesses can assign tags on potential leads like “less than 15 employees”, “remote-first company”, or “subject to HIPAA” automatically.
Just one of those tags would give the sales team an idea of how to approach, or even which automated outreach to send out. But a lead could fall under more than one segment: where those tags overlap, there’s room for deep personalization at scale.
More focus on customer behavior and actions
In today’s customer-centric business landscape, behavioral segmentation, focusing on customer actions and preferences, has become critical. This approach observes customers’ usage rates, spending habits, product benefits sought, loyalty, and marketing responses.
Behavioral segmentation helps sales teams understand their target segments better, allowing them to identify purchasing triggers, optimal buying times, and effective marketing messages. For example, understanding product usage can guide product development and promotional strategies. Similarly, knowledge of shopping behavior can assist in tailoring prospecting strategies and choosing the right engagement channels.
Expands prospecting beyond traditional channels
Businesses need to deeply understand their customers, which entails leveraging customer segmentation methods such as demographic, behavioral, geographic, and psychographic. These insights facilitate personalized marketing strategies, enhancing customer experience and relationships.
The rise of ecommerce and social media has opened up new customer segments beyond traditional channels. Ecommerce platforms offer insights into customer buying behaviors, enhancing marketing effectiveness. Similarly, social media platforms foster direct engagement with diverse customer groups, improving brand loyalty.
Social listening tools offer additional actionable insights by monitoring social media conversations and trends. This can unveil customer needs, potentially prompting the development of new product features.
In short, thorough customer understanding through effective segmentation expands companies’ horizons, helping them leverage ecommerce, social media, and social listening for improved sales prospecting.
Shift from individual leads to account-focused approach
The traditional lead-focused approach, which can lead to prioritizing quantity over quality, is being replaced by an account-focused approach. The most switched-on B2B sales teams know that their customer isn’t one good contact within a company, but a network of stakeholders and decision-makers.
An account-focused approach, often referred to as account-based marketing (ABM), shifts the focus from individual leads to groups of decision-makers within a single company or account. This strategy allows businesses to understand entire markets better, considering factors like company size and industry.
There are two big advantages to this approach.
First, by focusing on entire accounts, companies can align their sales teams and marketing teams more effectively, ensuring a unified message and strategy. This increases the efficiency and effectiveness of their marketing efforts, marketing campaigns, and the use of marketing resources, ultimately improving their marketing strategy as a whole.
For instance, if a data integration company detects that somebody from Acme Corp. has spent several minutes reading the landing page about their cloud integration solutions, they could employ an account-focused strategy by showing LinkedIn ads specifically to managers and executives at Acme Corp., showing what the solution can do for a big enterprise like theirs.
If the account is big enough to warrant that effort, there’s a lot of room for creativity. Customer segmentation lets companies automatically sift through analytics data and sort leads into high- and low-value accounts.
Second, an account-focused approach allows companies to tailor their approach to the unique needs and characteristics of individual businesses. This means that the marketing messages, product development, and even pricing can be customized based on the characteristics of the target account, leading to more personalized experiences.
For instance, a company might offer a specific bundle of services or discounts to a large corporation, while a smaller business might be offered a different package tailored to their needs and resources. Some target accounts might have specific technical expertise – maybe they want a quick spin through the finer points of headless CMS Drupal, while others need to move at a slower pace.
By focusing on entire accounts, they can build stronger connections with multiple individuals within the company, fostering brand loyalty and enhancing the customer experience.
Automating this process through the use of customer segmentation software further improves the efficiency and accuracy of identifying and targeting the right accounts. This enables companies to focus on nurturing the most valuable and loyal customers.
Customer segmentation automation
The automation era has significantly impacted customer segmentation, a crucial part of marketing strategy. While traditional segmentation groups customers based on shared characteristics like demographics or spending habits, manual processing can be laborious and error-prone, especially for large companies.
Automation tools address this by swiftly analyzing vast amounts of customer data, encompassing demographic information, buying habits, and customer feedback. This rapid analysis helps marketing and sales teams identify ideal customers.
For instance, these tools can identify loyal customers by evaluating purchase frequency, customer lifetime value, and loyalty program participation, enabling more targeted marketing.
Notably, these tools also deliver actionable insights, such as trend identification, pain point revelation, customer behavior prediction, and marketing campaign recommendations. Furthermore, real-time updates ensure the segmentation remains current in a rapidly changing market landscape.
Automation streamlines customer segmentation, enabling better understanding of the customer base, targeted marketing, and goal-oriented business growth. As digitalization continues, automation’s role in customer segmentation is set to expand.
The shift to data-driven sales
The shift towards data-driven, personalized sales prospecting is driven by the customer segmentation marketers have been doing for years. These practices can provide sales teams with valuable insights into customer behavior, enhance customer relationships, and grow the bottom line in the long term.