Understanding customers is essential for achieving corporate success. Marketing should be focused on identifying the prospects who need specific attention If a prospect doesn’t seem to need anything, they could count as wasteful resources and no business owner wants to waste money and time trying to reach a potential customer base who doesn’t think they need your product or service.
With firmographics, sales and marketing teams can now know the segments and industries they want to target by their demographics, psychographics, or behavior data and get the most value.
Consider firmographic data to be the B2B equivalent of demographic data. Instead of looking at the contact’s personal information, you look at company data such as industry, employee size, annual revenue, many more.
This information is critical for B2B sales and marketing teams since it ensures alignment with leads, potential prospects and your Ideal Customer Profile.
There are countless variables, but here are some firmographic data that may be found in your firmographic segmentation spreadsheet:
- Business type
- Organizational structure
- Customer base
- Company size
- Annual revenue
- Industrial segmentation
- Executive title
- Number of employees
- Geographic information
- Legal status
What Is Firmographic Segmentation?
Business-to-business customers are categorized using shared company or organization attributes through firmographic segmentation. This method can effectively steer marketing, advertising, and sales by offering deeper company insights, ultimately leading to more focused marketing campaigns.
Benefits of Firmographic Segmentation
The fundamental goal of firmographic data is to aid firms in segmenting potential B2B consumers into meaningful groupings.
By having access to pre-segmented client data on each potential customer’s size, geography, or revenue classification, sales teams and marketers may save time and resources.
We will now explore the reasons for employing firmographic segmentation.
Why is firmographic data important?
Access to business insights and demographic data
With relevant messaging, firmographics provide accurate information on the target business. Factors like companies’ locations, products they sell, annual revenue, company size, market share, and other companies’ information are revealed. Check out the guide about lead-to-revenue management.
Simplify the trends
Your company can identify data patterns by evaluating firmographic information, which will assist in creating a marketing campaign that can help strengthen your marketing and sales efforts in the long run.
Optimized resource allocation
You can accomplish your sales and marketing efforts and objectives without making a big financial commitment by integrating firmographics into your marketing strategy. Companies that try to sell to an industry that is unlikely to buy their goods squander resources by doing so.
Through firmographic segmentation, your sales and marketing effort is concentrated to only targeting clients who are most likely to be interested and who have the means to make a purchase.
Time saving
Adopting a firmographic segmentation will save you time spent on irrelevant leads in the long run. Instead, you will devote more time and energy to more potential customers, one company at a time and consequently, more conversions.
Customer retention
You can forecast your customers’ purchasing behavior if you know what kinds of organizations will use your product or service. Then you can recommend alternative solutions that might address the requirements of particular clients.
Safety
Reduce the risk of missing out on possibilities by using firmographic data to support your marketing and sales strategy. You can use it to locate potential clients and gauge the market size.
Improved ROI
Employing firmographics in your business will assist you in developing a solid marketing plan that complements your sales activities.
Consequently, your sales and revenue will grow, inevitably. Check out the guide about gross revenue.
Factors Considered While Creating Firmographic Target Marketing Strategies
There are innumerable variables that can be employed, but these are typically the firmographic data examples that most businesses and mid-size companies use for firmographic segmentation:
Company’s size – annual revenue
Size firmographics determines the size of the organization. It is obvious that a marketing effort targeted at small firms won’t have the same impact on a major enterprise-level organization. Because of this, successful businesses divide their clientele into several size segments.
The amount of income and employees that a company has are the two most common measures of its size. Enterprises are divided into the following categories based on these two criteria:
- Micro-companies
- Small businesses
- Mid-sized businesses
- large businesses
All Time Design
Industry
Because some sectors are more likely than others to be interested in particular goods and services, industry type is a natural variable. Publicly owned companies with a municipality status that deal in building supplies won’t pique the interest of an advertising company in the education sector looking for clients to invest in modern technologies for classrooms.
Location
Most companies are naturally constrained to certain industries due to their location. For example, most cement depots are situated in certain areas. Location firmographics assume that organizations should be categorized according to their locations. As a result, businesses may be divided into groups based on factors like a city, state, area, and so forth.
Organizations can determine which geographic regions their marketing campaign is most successful in and which regions they should focus more attention and effort on those specific segments where the companies are located.
Think of a company in Nigeria that doesn’t do much business with one in Europe. The company shouldn’t invest a lot of time or money in working with the European firm or anyone else outside of its immediate area.
E-commerce is expanding quickly, and in 2023, e-retail sales are predicted to account for 22% of all retail sales globally through company websites. However, the location shouldn’t be regarded as a fuzzy variable when segmenting data. For many businesses, the possibility of a sale still depends on the distance from the customer. For instance, the interest of a certain firm may be significantly influenced by the climate. Find out what is sales negotiation and how to do it.
Company Structure
A firm’s legal status or the relationships between its constituent businesses are shown by firmographic information like the company structure. Businesses may fall under one of the following categories:
- Limited Partnership
- Limited Partnership
- Corporation
- Limited Liability Company
- Sole Proprietorship
- Partnership
- Limited Partnership
- Cooperative
- Government organizations
- Non-profit Organization
- Owned by the Public
If firms are aware of the types of businesses for whom their product or service is most beneficial, they can significantly increase the effectiveness of their sales and marketing campaigns.
Sales cycle stage
The content you offer a potential consumer should be pertinent to their stage of the buying process. Do they intend to buy now, or are they merely gathering information with the intention of buying later? Use relevant content, or better still, even personalized content.
Performance
Firms are grouped together based on qualities relating to their business execution over time in a process called firmographic segmentation by performance.
- Period of existence
- growth or decrease rates
- Losses and gains
Similarities in any of these areas may be a sign that the businesses require your good or service as a solution.
Final Words
Firmographic market segmentation reveals important information that may be used to guide and enhance advertising operations. You’re likely to gain from more advertising options, more pertinent messaging, and improved ROI by classifying potential companies based on comparable characteristics.
Frequently Asked Questions On Firmographic Segmentation
What is firmographic data?
Firmographic data are types of info used by organizations to categorize potential customers and their target market, such as company size, geographic location, how many employees and customers, type of organization, industry technology, other businesses involved in the marketing process, and sales strategies, etc.
Is industry one of the firmographic data points?
Industry firmography describes the activity of the company. Organizations are classified as businesses or government groups based on characteristics-related features, and most activities in business are purely restricted to a particular sector by its core competencies or its customers’ demand for specific products.
What are firmographic questions?
These are questions asked to collect firmographic data, identify firms, and segment companies that count as qualified prospects. For example, how do companies in certain industries compare the firm size to other variables such as market segments? Do employee numbers grow or shrink in their companies? Is a new product more popular among entrepreneurs, growth companies, and established companies than others? What is the number of employees?
What are examples of firmographics?
Firmographics include data about company sizes in industries, locations, revenues and other factors. These data can come from public sources like annual accounts, press releases or websites.