As an organization, consumer satisfaction should be a top priority if you want to stay in business. Each customer has unique criteria when making decisions about your product or service.
Today, we have many types of market segmentation that help organizations understand their target customer base, one of them being firmographics which focuses on B2B (business-to-business) customers. Firmographics and demographics have many similarities in how companies market their products and services also they are useful in building customer profiles.
While demographics are more focused on building profiles by grouping the population of a certain geographic region under different characteristics, firmographics concerns itself with identifying the right sector of the audience, it does this by dividing potential clients into different groups to work on customer satisfaction. Without further ado, let's dive into more details on firmographics.
What is Firmographic data?
Organizations and their products or services differ. When evaluating a company's efficiency, many factors are taken into consideration. Information about a B2B organization's target audience and industry is critical in determining the relevance of its product/service to that audience.
Firmographic data is information about a company's key characteristics that can be used to define market segments and gain insights into the needs and desires of these organizations.
Firmographic data, like other primary forms of segmentation, is collected and then used to analyze B2B audiences based on their characteristics, making it much easier to target, customize, market, and identify high-value customers via the Firmographic Segmentation process.
Main 5 Attributes of Firmographic segmentation
Firmographic segmentation examines and categorizes B2B audiences based on common characteristics. While B2B companies can use a plethora of variables for firmographic segmentation, we'll focus on the five most important aspects of firmographic segmentation:
1. Industry
The Industry is divided into 4 broad categories. (i) Primary Industry: Agriculture, Mining, Fishing. (ii) Secondary Industry: Manufacturing, Processing, Construction. (iii) Tertiary Industry: Hotels, Real-estates, Restaurants. (iv) Quaternary Industry: Health Care, Education.
This feature is essential for firmographic segmentation. It entails categorizing your target audience based on the type of product/service they offer. Targeting the right industry can help your segmentation efforts, and vice versa. It is beneficial to understand the specific industry in which your product/service is valuable.
2. Location
This is based on the geographical location of the target audience. It considers factors such as city, country, state, and environment. The location of a company influences how customers buy its products and determines a brand's ability to sell and distribute. This attribute can be used by B2B marketers to identify areas where their product adds value to consumers.
3. Size
This attribute can be defined using an organization's annual revenue and employee count. It indicates the size of an organization, whether it is micro-scale, small-scale, medium-scale, or large-scale.
In order to target the right audience under the size attribute, you must first ask yourself whether your target market is a Fortune 500 company or a small start-up. You must ensure that your target market can afford what you're offering or risk losing money.
Similarly, an organization's employee size can indicate whether it is a small, local business, or multinational, as well as its purchasing power and likelihood of returning customers.
4. Status and Structure
This characteristic usually refers to an organization's legal status. This could be a sole proprietorship, a partnership/limited partnership, a corporation, a limited liability company (LLC), a non-profit organization, or something else. the funding type and hierarchy differ, hence understanding which organizations would benefit the most from your product/service will inform your marketing strategies and ensure increased profits.
5. Performance
This firmographic segmentation feature encircles an organization's accomplishment over time. It considers factors such as business execution, employment growth, financial performance, and revenue increase or decrease. Grouping your target audience based on their performance over time is an effective way to determine their current position and predict their future behavior, which is useful in developing sales and market strategies.
Furthermore, the Executive title and Sales cycle of a company are critical variables in firmographic segmentation. Knowing the executive titles of your target audience(s) allows you to identify the key decision-makers and influencers in your target organization. Are you aiming for the CEO, the Managing Director, or the CFO? Knowing which customers can be relied on helps you avoid wasting time and effort on the wrong decision-maker.
Understanding your target audience's sales cycle stage always determines the type of information you provide to them. The stages of the sales cycle are Awareness, consideration, and decision.
Let's take a closer look: In the awareness stage, a company is just learning about what you offer as a B2B company and is most likely looking into other options. Your brand may be considered a viable option during the consideration stage. The decision stage indicates that they have determined that your company meets all of their requirements and will select you over competing options. Knowing your target market's cycle stage allows you to know when to push them to the next cycle stage and aim for the bull's eye.
Key Benefits of Firmographic Data
Firmographic data has aided many B2B organizations in identifying their target segment and ideal customers. A single approach for all types of matrices does not yield positive results. Using a different approach for each grouped segment with the help of firmographics yields the desired result. The following are the advantages of firmographic data:
1. Identify B2B/C2B Target Segment
Firmographic data is useful for B2B companies in identifying their target audience. B2B companies' target audience consists of decision-makers in the sector they are prospecting, such as CEOs, Managing Directors, CTOs, and CFOs.
Identification of these target segments is critical because they are the main influencers in your prospective organization, purchase authorization, and approval of the services you provide; this can be useful in customizing sales and marketing approaches.
2. Refine Advertising Campaigns - Promotional Tactics
Advertising based on assumptions can be difficult today. If you make incorrect assumptions about a target audience, you may end up wasting resources if they are not interested in your product/service. Instead, by gathering as much information as possible about your target audience, you can then use that information to target ads more effectively.
For example, if you're running ads on LinkedIn, you can target audiences based on the firmographic data we discussed earlier.
3. Increased ROI
Understanding current and prospective customers through firmographics allows you to allocate and utilize resources in a calculated manner, resulting in the expected results and increased return on investment.
Firmographic Data Sources & Provider
Data Acquisition, processing, and analytics are extensive processes and for them to be meaningful, up-to-date quality data is crucial. Let's look at some of the ways of data acquisition.
3rd Party Websites
Today, you can obtain ample information on any company with the click of a button, but the accuracy and relevance of such data can be a challenge.
Customer data platforms, marketing intelligence, and a company's public databases are examples of third-party websites that provide firmographic data. For B2B businesses to use for marketing and lead generation, information from these sources is accurate and reliable.
Conducting Surveys
Online surveys have grown in popularity as a cost-effective way for businesses to collect data on their customers. However, they can be time-consuming. B2B marketers, for example, can create surveys to gather information about a company's size, industry, location, and revenue.
Even if it appears to be a simple way to obtain direct data, there is a chance that your target audience will withhold or even refuse to provide certain information for reasons best known to them.
Linkedin Search
Linkedin search is another popular source of firmographic data; most, if not all, businesses have a presence on Linkedin. It's also a low-cost method of gathering information about your target market.
Professional Data Provider
The data sources listed above are useful, but getting data from a reputable data provider is the best way to obtain massive, structured, and accurate data on your target market.
Proxycurl's company profile API provides firmographic data, allowing you to group or filter organizations based on category, how much a company has received in funding, past and current employee data, acquisitions and exits, and much more. Furthermore, it is a one-step process that requires less time.
Cross-checking with publicly available sources is also advised to ensure consistency of accuracy.
Bottom Line
Firmographic attributes should be used by B2B companies to create ideal customer profiles. All of the various matrices provide opportunities and necessitate different approaches. Please be as specific as possible.
Know your customer and comprehend your consumer.
Utilizing the right amount of resources is critical when targeting prospective organizations. Gathering firmographic data from web searches and surveys can be time-consuming, and you may end up with unnecessary information; instead, it is best to outsource firmographic data to professional providers such as Proxycurl, which offers an amazing data set of companies.
