Customer segmentation is at the heart of a strong B2B marketing strategy. Marketers rely on segmentation to effectively market specific products to appropriate audiences.

Lori Wizdo, principal analyst, Forrester Research

But in today’s constantly evolving B2B ecommerce environment, customers’ demands for more contextually relevant shopping experiences is rapidly growing. And B2B marketers should address this challenge by leveraging new data and analytics tools and strategies to fine-tune those segmented audiences into microsegments, Forrester Research Inc. says in a new report, “Microsegmentation Yields Contextual Customer Experiences That Convert,” by Lori Wizdo, a Forrester vice president and principal analyst for B2B marketing.

Letting go of outdated segmentation

Traditional segmentation has lost its mojo, the Forrester report says, because many B2B marketers are still holding onto a legacy mindset of what it calls static macrosegmentation. Macrosegments cast a wide net—placing audiences into large demographic groups such as company size, industry, geography and the end market served.

Advancements in data and analytics technologies means B2B companies know more about their customers than ever before. Where traditional demographic macrosegmentation was once a cutting-edge marketing strategy—identifying such customer demographics as company size, industry, and geographic location—it still had the potential to be vague. But Forrester says new data and analytics capabilities now allow B2B marketers to break these demographics down further into microsegments—covering, in addition to demographics, such criteria as customer buying behavior, record of sales growth, price sensitivity and aspirations—which allows sellers to reach even more targeted audiences.

Using data and analytics technologies, Forrester says marketers can develop various types of microsegments. A “context” microsegment, for example, categorizes an audience based on factors such as the products they own or their maturity level. A “behavior” microsegment identifies customers by the content they consume, their engagement level or where they are in the buying process. And a “choice criteria” microsegment groups together those customers who might be sensitive about price, delivery time or product quality.

While traditional macrosegmentation helps B2B sellers find customers, Wizdo says that microsegmentation helps marketers build content so B2B buyers can more easily find the most appropriate B2B sellers. “68% of buyers say it is important that vendors provide relevant content at each stage of their buying journey without having to rely on sales reps to deliver it,” she writes, adding: “By targeting the drivers of customers’ actions, you can build trust through more empathetic, relevant content and accelerate the buyer’s journey.”

A microsegmentation strategy delivers results

Microsegmentation, which allows B2B marketers to collect, analyze and manage data to segment audiences based on a wide variety of factors, provides multiple benefits to B2B businesses, the report says.

B2B marketers have reported that inbound marketing efforts are falling short on delivering enough targeted traffic and leads, the report says. That places outbound marketing—such as email and advertising—at center stage with regard to generating new, high-quality audiences. The most successful outbound marketing campaigns rely heavily on research, a fact that Forrester says underscores the likely success of a microsegmention strategy. Microsegmenting those audiences means the audiences targeted will most likely benefit from those products or services—which will improve the performance of those outbound marketing campaigns.

The Forrester report also points out that microsegmentation will boost a B2B company’s return on its content marketing and inbound strategies by using customer information to “customize experiences that persuade and influence specific clusters of customers.”

Also, the report says that microsegmentation will help B2B companies build a high-yield marketing portfolio. To maximize their return on investment, B2B companies need to be able to get the products in their portfolio in front of the specific customers that need specific products. Microsegmenting is the strategic process that identifies those high-potential audiences for those specific products.

Ultimately, the report says microsegmentation benefits both the B2B customer and the B2B seller because it results in more relevant shopping experiences for the buyer and increased conversions for the seller.

Cate Flahardy is a Chicago-based freelance journalist covering business and technology.

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