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How Market Segmentation Has Changed from "Our Latest and Greatest" to "How Can We Help"

Marketing Segmentation

On its face, marketing segmentation seems to be a study of contradictions:

  • Determining how buyers are different to capitalize on what makes them the same.
  • Reaching out to buyers by encouraging them to reach in.
  • Attracting as many prospects as possible by addressing them in the smallest possible groups.
These are the kinds of shifts in conventional thinking that marketing segmentation requires. And they may be why it‘s so hard for some B2B organizations to successfully move away from mass marketing — seeking ever larger audiences for a single product — to focus on smaller groups of prospects defined by certain characteristics.

This practice that we now call marketing segmentation wasn’t always this sophisticated. It evolved over the years as marketers got savvier about human interactions, motivations, and goals. They also gradually began to focus more on the buyer rather than on what they were selling.

And in recent decades, marketers have become more capable of using technology to benefit from perhaps the ultimate segmentation contradiction: enlarging the scope of segmentation to microscopic proportions. Today, marketers can segment at a cellular level to explore the psychological DNA of their prospects and customers. But is this the best strategy? For some marketers, has segmentation gone a bit too far?

To answer that question, we should take a look at how we got here. The first data-driven segmentation showed up in the early 20th century, when George B. Waldron at the Mahin’s Advertising Agency employed census data, city directories and tax rolls to characterize audiences by literacy rates and income levels. Segmentation went even further in 1956 when marketing consultant Wendell Smith published “Product Differentiation and Market Segmentation as Alternative Marketing Strategies,” an article advocating an emphasis on the market rather than the product.

B2B Marketing Gets Personal

So where are we today? The transformation from mass to segmented marketing ultimately gave rise to complex digital marketing tools and a race to employ them.

Early technologies moved from purchasing to lead tracking to contact management. Now, B2B marketers have access to customer relationship management (CRM) technology, the data-driven tool allowing them to segment and communicate to ever more specialized niches and even engage in one-to-one conversations. And marketers can use these insights to create products that solve the problems their customers face. The question that remains: are they the problems marketers should be solving?

Today, CRM Software is a virtual necessity for any serious B2B marketer. The most popular systems from providers like Salesforce.com, SAP, Oracle, Microsoft and HubSpot can gather individualized data from transactions, social sharing sites, blog subscriptions, special events and other sources. But using these and other tools often leaves a marketer with more questions than answers.

The importance and nuances of adopting an advanced CRM system for personalized segmentation — rather than simply relying on the marketer’s experience and gut feeling — are detailed in an upcoming Point To Point whitepaper scheduled for publication in April 2019. We’ll send you the paper upon publication. Just request a copy.

Until then, we’re happy to share more of our perspectives when it comes to your B2B marketing goals. We work with B2B brands, helping them navigate smarter segmented marketing using customer relationship management tools, advanced personalization, marketing analytics, and the creation of informed, compelling brand stories that drive results. For details, please get in touch.

Topics: General