B2B Segmentation – the impact of behavior

Just a few more thoughts about segmentation…B2B segmentation specifically.  Segmenting B2B customers is both simple and more complex at the same time.  Simple because of smaller datasets and widely conforming variables, but more complex because of a greater number of disparate data sources – and aligning data definitions for each – and because of the very real problem of defining the “customer.”  Mostly I’ve seen companies overcome the above complexities in all but one regard – properly parsing and modeling customer behavior.

What does that mean?  consider this:  how often and how easily are customer tenure, i.e., length of time as a customer; specific product or service usage – i.e., name, SKU, quantity; and customer recency, i.e., last purchase date/ship date,  tracked and added to a customer or analytics database?  How many years of data are combined and stored in such a database:  1 year? 3 years? 5 years?  Modeled correctly, these few variables will provide actionable insight into your B2B customers’ behavior and when added to their firmographics profiles will impact the relevancy of communications, offers, promotions and service-calls.

Most of the B2B segmentation I’ve seen is based on a combination of firmographics and revenue, some even based on year-over-year revenue or 3 years of revenue.  Or sometimes the segmentation is based on product profiling.  But rarely are they enriched with behavioral data such as defined above.  Why care?  because this means that the company will forever be stuck knowing what their customers “did” but not what the customer will “do next.”

Wasn’t it Wayne Gretsky that said “I skate to where the puck will be not where it has been.”

Properly combined with customer firmographics and modeled for predictive outcomes B2B customer behavior will have a powerful impact on future growth.

Tell Me What You Think!

Ann McCartan, DBMCatalyst