Marketing Archives

6 B2B Market Segmentation Mistakes to Avoid

In our work with market segmentation in the B2B space, we often see the same mistakes. Here, we would like to pass on the benefits of our experience to help you avoid them as well.

These are the classic six mistakes in B2B market segmentation:

  1. Diving in before you have tested the water. Before you do anything else you need to define the market you wish to segment. What are the products or services that interest you and what are their alternatives from the customers’ point of view? For example, a few key accounts may make a significant proportion of the total market.  Therefore, it may be better to segment deeper within these accounts than perform a shallow analysis across the whole industry.  Scope the market carefully before segmenting it.
  2. Not knowing where the ball is going.  So many segmentation studies go to great lengths to study recent customer behaviour but pay little or no attention to how this might change in the future. If the economy is about to change or if a new technology looks set to take-off, then behaviour could change as well.  If a new market, re-organization or procurement strategy is about to be implemented, this could change who the decision-makers are and what they are looking for.  Understand where the ball is going, not just where it has been.
  3. Researching who you know rather than who counts. This is a particular problem in B2B where existing contacts are routinely surveyed for their thoughts – but they are often too low in the organization to make the big decisions or see the big picture. Use your senior contacts to setup interviews with the customer’s senior contacts, or use a third party company to help gain access to opinion leaders.  Ensure your research has the right quality of sources, not just the right quantity.
  4. Gaining just a shallow understanding of needs.  In a simple interview, customers will nearly always score price as an important factor, yet price is rarely the only reason why a customer will swap supplier.  Good interviewers will follow up answers with further probing “why” questions to try to get to the bottom of their real needs, which the customer themselves will find a useful journey of discovery. Gain a deep understanding of customer needs and throw new light on the real drivers of the issues.
  5. Forming segments that follow the norm.  Too many suppliers use simple segments that make life easier for them.  These could be industry-based, product-based or geographic-based segments.  But are there customers across these borders that actually have similar needs? For example, are there health & safety driven customers in Industry A, B and C which have similar needs and are not being served well by anyone?  Great segmentation will find ‘blue oceans’ of segments with little competition.   Use segmentation to see the world differently to your competition.
  6. Not using the segments. The greatest sin of all is to come up with smart segments that sit in someone’s drawer.  We must remember that the purpose of segmentation is to help develop better market strategies. It is better to do a small pilot exercise and use the segmentation outcomes, than to do a grand segmentation study only to find the implications too big for the business to handle. Make sure you link market segmentation to market strategy and drive implementation (even if just a pilot).

These should help you get a bigger strategic bang for your segmentation buck!

Edmund Bradford

Strategic Marketing Execution

This Blog is for anyone interested in executing their strategic marketing ideas successfully.

These ideas are typically captured in a strategic marketing plan (which may cover the next 3 – 5 years).  However, there is much evidence that most strategic marketing plans fail to get executed effectively.  So, this Blog is also for anyone that has a strategic marketing plan (or is writing one) and is keen to make it work.

It is about helping the marketing community get fundamental strategic change in place in their own (or their client’s) organization.


Marketing for the Greater Good

It is over 10 years since John Elkington wrote Cannibals with Forks: the Triple Bottom Line of 21st Century Business. In it he talks about the responsibility of business to deliver not only improved profits, but also improvements to their people and the planet.  But getting alignment on all three measures is easier said than done.

Here at Market2win we have setup one of our simulations to look at the planet vs profit issue.  In the simuation we have five businesses all competing on different “green” credentials.  The interesting point is that although the players in the simulation (who adopt the role of the marketing team of each business) start by emphasizing their greenness, once the profits are put under pressure, they rapidly forget their green principles and go for a more profitable strategy (e.g emphasizing low price over low carbon footprint).   This is also true in many businesses  where “greenwash marketing” (putting a green spin on some very ungreen activities) is a common policy.

The lesson here is that to make companies green, they must see a clear connection between the green initiative and greater profits. For example, many hotels now ask you to only place dirty towels on the floor.  This reduces their laundry costs and is also good for the environment.  Good for the planet and good for profits.

Too often, people try to fight the profit motive by appealing to more noble causes.  This, unfortunately, is a battle they will lose as the profit motive will always dominate.  It is better to align your cause with the cause of business and sell it like a business person.  This was reinforced to me this week when I bought the latest Big Issue magazine and read an article by its founder, A. John Bird (for those of you that don’t know, The Big Issue is sold by homeless people in the UK and they keep half the revenue themselves).   In the article, he says how he attended another award ceremony recently and although he didn’t win, he realized that “this one was different. This was for Business Leadership! Yes, for helping to create a business that was about dismantling poverty in the lives of people!  And this was the first, the very first time that The Big Issue was being patted on the back as business leaders!” 

He also goes on to say (and I would agree with this) that The Big Issue can help businesses respond to social crises.  Wrap a good cause in smart business thinking and sell it like a professional. Then there is change.

Top 10 tips for Naming a New Company

Are you starting a new business?  Got a name yet?

Deciding on the name for your business is one of the most important decisions you can make.  A quick look through your local Yellow Pages will show you how many people get this totally wrong.   Many names are either dull, unmemorable, restrictive, complicated or just dumb!  Moreover, unlike a product name, once it is done, it is a real hassle to change it.  The moral is, think about it carefully and get it right first time.

We have helped to get many businesses started in the right way and have developed a FREE sheet with our Top 10 Tips for Naming a New Company.  Simply email us at and we will gladly send it to you.  It will help you nail a great name and might just make a big difference to your business!