B2B sales is all about getting personalized outreach to the right decision-maker at the right moment.
But how do you target prospects individually without spending countless hours researching each individual?
Enter lead segmentation, a powerful conversion tool.
At its core is data, which more businesses are using to gain a better understanding of potential customers and tailor content and outreach to greater effect.
The concept may sound straightforward–and it is. But if you want to truly reap the benefits, you need to take the right approach. Keep reading to learn more.
What is lead segmentation?
Lead segmentation is the process of separating your leads into subgroups based on certain characteristics, such as industry, company size, and location.
Different businesses have different budgets, decision-makers, and pain points. Sending out mass marketing content to every lead isn’t always effective.
Business-to-business selling relies on hyper-personalized outreach, so your B2B marketing strategy should reflect that. Sales and marketing teams need to understand the pain points and expectations of business decision-makers and offer relevant solutions at each point of the B2B sales and marketing funnel.
Utilizing a multimedia message as part of the outreach strategy can enhance engagement by catering to the preferences of different segments, ensuring that each message is visually appealing and informative.
That said, targeting each individual lead can be a poor use of resources.
It’s why lead segmentation is so powerful, allowing you to:
- Break your list of leads down into more easily manageable categories
- Increase the efficiency of your lead scoring system
- Better understand leads through their commonalities
- Design personalized content
- Get your products and services in front of the leads most likely to convert
- Identify and target key decision-makers
- Increase conversion rates
5 types of lead segmentation
Segmenting leads isn’t a case of randomly selecting contacts to group together. There’s a method to the marketing tactic, and it starts with understanding the different ways you can segment them.
Here are the most common ways to do that.
1. Firmographic segmentation
Firmographic segmentation separates businesses based on company size, industry/sector, location, revenue, and structure. This helps you reach businesses that need your product and can afford to purchase it.
For example, small businesses with just a few employees might not have the budget for enterprise HR software.
2. Geographic segmentation
Geographic data involves looking at different areas that you’re targeting and segmenting contacts based on language, culture, climate, and population.
How is this relevant? Because sales depend heavily on context. So, you need to understand cultural differences or cultural barriers that might hamper conversions.
For example, if you’re pitching to companies somewhere like the UAE with a diverse population, you might segment leads based on whether they operate in Arabic, English, or Urdu.
3. Behavioral segmentation
Behavioral data refers to the behavior of your leads throughout the sales funnel as well as their engagement with your content, products, and services.
Behavioral segmentation helps you analyze the historical data of how your leads interact with your brand and predict future sales.
4. Psychographic segmentation
Psychographic data, such as sentiment, values, and interests, allows you to create personalized outreach that prioritizes shared values. It helps you build deeper relationships with leads based on more than just pain points.
Business ethics has become a hot topic over the last few decades, and platforms like social media have only emphasized that. Issues such as politics, climate change, and equality are increasingly influential in purchasing decisions.
Prospects want to know your company’s ethical values align with their own before making purchases.
5. Technographic segmentation
Technographic data includes a company’s technology needs, including current solutions and future needs.
This segmentation method is particularly beneficial for B2B tech companies or SaaS providers.
For example, let’s say a growing SMB plans to scale up its customer contact center. They already have a few tools but these won’t support their growth goals. As a SaaS company, this is a golden opportunity to offer solutions that are scalable, whether that’s virtual receptionist services or automated features like an auto dialler.
How to segment leads effectively
Let’s go through the essential steps to creating a lead segmentation strategy and the tools that will prove invaluable along the way.
Automate, automate, automate
Automation is all the rage right now–and for good reason. It can help you with every step of lead segmentation, so it’s the obvious place to start.
Including process visualization tools like Value Stream Mapping can help identify inefficiencies and improve workflow in your segmentation efforts. By mapping out the lead segmentation process, you can see where delays or redundancies occur and utilize automation tools more effectively to enhance these processes
Gathering and analyzing data takes time and manpower. For small businesses, manual lead segmentation might provide a huge ROI. For larger businesses with lots of leads, automating some or all of the lead segmentation will streamline the process.
Any business looking to automate lead segmentation should at least consider the following tools:
- Email marketing software: This helps you gather data and create personalized email campaigns.
- Customer relationship management software: CRM systems store data about leads and can also provide analytics.
- Marketing software: Whether you follow one of the best affiliate marketing programs, run ads on social media, or prioritize SEO-friendly blog content, marketing software brings it all together. Oversee various campaigns and channels to better manage lead generation, nurturing, and conversion.
- Sales software: Streamline workflow for sales reps with tools like autodialers, task scheduling, prospecting, and outreach.
- Lead scoring models: Platforms like Breadcrumbs help unlock growth in your tech stack to draw out your best prospects for targeted campaigns automatically. You can sort and prioritize contacts using real-time intent signals alongside traditional contact scoring methods.
Customer management software and sales and marketing automation can help you get the most out of your data.
Once your segments are defined and you’re equipped with the right tools, it’s time to drive significant traffic to your campaigns. Implementing targeted marketing ideas to boost traffic not only enhances visibility but also ensures that the right eyes are viewing your content.
This approach aligns perfectly with the detailed personalization that segmented leads require, bridging the gap between broad traffic generation strategies and hyper-targeted outreach.
These tools help you gather data, build company profiles, filter leads by categories, and create targeted marketing campaigns. Less effort, more impact.
Define your targets
Before beginning any new process, it’s important to establish what you want out of it. That way, you can evaluate the success and ROI of your efforts and get everyone working towards a common goal.
The ultimate goal of lead segmentation is to increase conversion rates. To do this, you need to identify areas in your process that will help you achieve that and set realistic targets for getting there.
Of course, every business is unique, but let’s look at a few general examples.
Goal #1: Generate more qualified leads
Your list of leads might be overflowing. But what if you’re struggling to convert those leads? You might need to refine your process for generating leads and nurturing them.
In this case, you might aim to:
- Better identify, understand, and target leads
- Increase interest and engagement
- Develop more effective sales prospecting methods
- Streamline your sales cycle
Goal #2: Move leads through the sales cycle more quickly
B2B sales cycles are notoriously lengthy. But if you’re finding the cycle longer than average for your industry, leads might be getting stuck.
In this case, you might aim to:
- Shorten the length of your sales cycle
- Identify bottlenecks where leads are getting stuck
- Enhance your lead nurturing processes
Goal #3: Identify upselling and cross-selling opportunities
Engaged leads and existing customers are a great opportunity to up-sell and cross-sell products and services.
According to HubSpot’s 2024 Sales Trends Report, 91% of sales professionals claim upselling brings in an average of 21% of their company’s revenue. And 87% of salespeople claim cross-selling brings in an average of 21% of revenue.
In this case, you might aim to:
- Increase revenue
- Identify more opportunities for upselling and cross-selling
- Build stronger relationships with existing customers
Targets help everyone stay focused, give teams something to work towards, and offer metrics to measure our success.
Create metrics to measure progress
Now that you’ve defined your goals, it’s time to develop tangible ways to measure them.
Reaching goals requires setting metrics, gathering data, and analyzing progress. You need to know if your lead segmentation process is paying off.
Metrics might include online engagement numbers, qualified lead generation, sales targets, conversion rates, revenue, lead response time, and any other measurable data that aligns with your goals.
Gather data
Before you can segment, you need data. It’s the only way you can learn enough about your leads to put them into categories.
You can gather data in a few ways:
- Your first port of call should be existing platforms like your CRM and email database, where you’ll likely already have at least basic information on key contacts.
- Companies have to report things like size, employee numbers, and financials by law. Search government databases or the company’s own website to find this information.
- To find key decision-makers, search a company’s website or employee LinkedIn profiles.
- For deeper insights, look at leads that have engaged with you and the information they’ve offered up through email sign-ups, social media engagement, feedback forms, questionnaires and surveys, and product/service reviews.
Outline your lead segments
Now, we get into it. It’s time to start segmenting. As we mentioned, there are five common ways to approach lead segmentation:
- Firmographic
- Geographic
- Behavioral
- Psychographic
- Technographic
You can also segment leads according to the buyer stage. If you have a lot of leads stagnating in your sales funnel, segmenting this way helps you re-target and recapture their interest. Outline your lead segments using the below categories and segmentation data mentioned above.
Unengaged leads
There may be some leads you’ve reached out to but never heard back from. Or perhaps you have leads who expressed interest a long time ago and have since disengaged or even churned customers.
Perhaps they’ve connected with a different B2B provider.
Perhaps more pressing matters have come up within their company and the need for your product has lowered in priority. You might even have failed to identify a key decision-maker, and your outreach is sat unread in someone else’s inbox.
Reach out to this lead segment by learning what drives them. Learn how to create a lead magnet that they can’t refuse. Remind them of their previous interest, offer deals that beat your competitors, or educate them about new and innovative products.
Engaged leads
This is where a prospect has expressed interest in your offerings but hasn’t moved any further along the funnel.
They might still be shopping around or researching other B2B providers.
To target engaged but wary audiences, consider offering educational content, free trials and demos, or a listening ear to their pain points. Then tailor your pitch accordingly, highlighting how your products and services are the ultimate solution.
Customers
You may have already converted them, but customer lifetime value (CLV) relies on retention. Existing customers are primed for cross-selling and up-selling opportunities.
Don’t assume converted leads will stay that way. Keep targeting them with valuable content like educational material, new products and services, unique offers, and personal correspondence to guarantee your company is always going to be their first choice.
Continuously analyze and segment leads
Lead segmentation isn’t a one-and-done solution. By integrating evergreen marketing strategies, you can ensure that your approach adapts to changing conditions while maintaining its effectiveness. Contacts might need moving around as they expand into new markets, hire new decision-makers, or adjust budgets.
For that reason, lead segmentation should be an ongoing process based on regularly gathering and analyzing new data.
To keep up-to-date with your leads, you can either update and reassess as new information comes in or create a schedule to reevaluate new information and re-segment your leads throughout the year.
Personalize your content
Remember, the ultimate goal of your lead segmentation strategy is to personalize your outreach to each lead segment. You want prospects to feel special, and personalized content will show them you’ve taken time to understand their needs.
While all sales have an expectation of personalization, B2B sales are the most demanding.
B2B customers expect a high level of personalization at every stage of the funnel.
Which is great, because now that you’ve followed the above best practices, you have the data and tools to deliver personalization like:
- Targeted marketing
- Follow-up emails
- Educational content
- Trials, demos, and samples
- Personal lines to sales and customer support reps
The possibilities go on and on. Whatever your target audience expects, you’re primed to deliver.
Don’t neglect existing customers
We mentioned earlier that keeping existing customers happy is vital to CLV. HubSpot’s 2024 Sales Trends Report backs this up, with respondents reporting that most of their revenue comes from existing customers.
You might be tempted to stop segmenting existing customers. Don’t.
Your clients still need that personal touch if you want to retain, up-sell, and cross-sell to them.
Ultimately, they are still leads. If they’re satisfied with your company, they’re significantly more likely to send new leads your way, so it’s worth nurturing them.
Lead segmentation for existing clients is also simpler, as you have more data on hand to create highly accurate categorization.
Your customers might cross into new categories throughout your relationship, though, so keep checking in with them and updating their information. Continue targeting them with personalized outreach, and that will go a long way to creating customer loyalty.
Lead segmentation: the secret to higher conversion rates
It sounds simple: break down a list of leads into manageable subcategories based on key traits that align with your business goals. Simple, but effective.
As we’ve discussed, the benefits of B2B lead segmentation include:
- Building stronger relationships with prospects and clients based on a deeper understanding of your target audience
- The ability to create highly personalized marketing and sales strategies that target the right leads at the right time
- Allocating resources more effectively to prioritize leads based on likelihood of conversion
But effective lead segmentation takes a considered approach. Start by defining your goals and gathering and analyzing data. After segmenting leads, focus on content that prioritizes personalization and continue to nurture relationships that will lead to long-term business.