I hate market segmentation. I understand why we need to do it, but for B2B marketers, it’s a tedious, often fruitless waste of time.
Consumer marketers get to play with demographics, psychographics and other juicy factors. We get something called firmographics, which sound more like control top hosiery than a useful way to view a market. We also have the taxonomy funded by our tax dollars in the form of Standard Industrial Classification (SIC) codes. In this strange, strange world, concocted by people who ought to get out more, the lawyer lies down with the lamb, or at least the guy who shears it. Happily, we have wine to help us.
Here is how I know that. A few years ago I was trying to segment the small business market. Yes, the whole thing. After days of staring at the SIC codes and descriptions and failing to come up with anything these segments might have in common, I had this thought: what if segmentation was not about the shared business traits of meth labs and car detailers but about their shared relationships to our products or product sets or to the way they work, rather than what they produce?
So naturally I went home, poured a lovely Chianti and got to work. The first thing I did was look at how these business owners worked: that is, were they at a desk all day, out in the field, or in the business but away from a desk? In this scenario, real estate agents and plumbers wind up in the same bucket, as do hair stylists and auto mechanics and accountants and graphic designers. In the case of telecom products, this tells us a lot about the circumstances in which they use our stuff ( all day, evening only, on a mobile device etc.).
I celebrated this brilliance with a second glass and looked next at how critical our solutions were to each type of business. So the graphic designer, with their absolute dependence on fast Internet, shares a bucket now with an investment broker, while the hairdresser snuggles up to the plumber since their Internet reliance is minimal. The lawyer and the meth dealer, share a high dependence on mobile voice service, and possibly each other.
The next glass revealed that not all of our customers have the same degree of technical acumen when it comes to our products. Graphic designers and software developers share a great ability to troubleshoot a wonky modem while landscapers and accountants just want the light to stop blinking.
As I drained the bottle, I added categories around price sensitivity, likelihood for more share of wallet and overall growth potential in their industries.
By the middle of the second bottle, it seemed obvious that I needed a very simple scoring system. Having limited cognition at this point, I opted for a three-point system and started emailing my Member of Parliament about crop circles (not enough in my neighbourhood).
There are not a lot of things that look as good sober as they do through a few glasses of wine. Members of Parliament are among them, but not the Chianti Segmentations. This sucker not only made sense the next day, but once I corrected the formulas and deleted the photos of Rinaldo I didn’t recall adding to the sheet, it actually made more sense. So naturally, our research department hated it. More because I didn’t invite them over, I suspect. But off they went to validate it and, behold, it worked.
The simple scoring system made it very easy to spot the industries where we could target specific products, and identified some basic characteristics we could use to craft offers and messaging. Plus it gave us the basis for some pretty sexy buyer personas (for a given value of sexy when we’re considering investment dealers).
I am not advocating you drink excessive amounts of wine to do your segmentation; cough syrup would probably work too. My point is, regardless of the substance that stops you from crying in meetings, segmentation should be about the relationships between products and users and not about the relationships between users and arbitrary external classifications.
Has anyone seen the corkscrew?
Read more: The Tedium of Change