Common Firmographic Segmentation Variables for Effective Customer Classification
Firmographic segmentation is a marketing segmentation method in which businesses are grouped based on shared characteristics, such as company size, growth rate, etc. It’s similar to demographic segmentation, but applied to companies.
Just like how B2C companies dig deep into understanding their customers’ age, gender, etc, B2B companies rely on firmographic data to target the right audience.
Firmographic segmentation is a low-cost method to comprehend the distinctive attributes of companies, businesses, and nonprofits, which can help you send targeted email campaigns.
We’ll explore the most common firmographic variables to help you classify your audience and maximize email marketing conversions.
What is Firmographic Segmentation?
In firmographic segmentation, businesses are categorized based on their observable traits, such as the age of the business, the number of employees, etc. By analyzing these characteristics, businesses can identify customers with specific needs and tailor their marketing strategies to suit their interests.
Let’s assume a SaaS company wants to target startups in Silicon Valley for their new cloud-based productivity tool.
They could use firmographic segmentation to identify potential customers by:
- Size: Focusing on startups with a specific number of employees or annual average revenue.
- Industry: Targeting specific companies inside industries, such as cybersecurity, artificial intelligence, or fintech.
- Geographic location: Limiting their target customers to Silicon Valley, a hub for technological innovation.
- Revenue: Targeting startups with specific funding and growth potential.
Using this firmographic data, B2B companies can implement targeted email marketing efforts to resonate with their audience segments.
Benefits of Using Firmographic Market Segmentation
Firmographic segmentation is a more straightforward data collection method than most other marketing segmentation methods. Often, you will find free information in government databases and through email surveys. You’ll also have access to firmographic data if you pay a small fee on research sites.
Firmographic segmentation is generally a low-cost, high-impact method when done online.
It also helps with the following aspects:
- Targeted email marketing: Firmographic segmentation allows email marketers to personalize their email campaigns, improving the relevance and effectiveness of marketing campaigns.
- Efficient resource allocation: Focusing on specific customer segments avoids waste of resources and time.
- Improved customer acquisition: Firmographic segmentation helps identify and acquire high-potential customers who are likely to be interested in your company’s products or services.
- Enhanced customer relationships: Understanding the specific needs of the audience segments fosters better customer relationships. This allows you to send tailored email content to move people further down the email marketing funnel.
- Data-driven decision making: In-depth firmographic data provides a solid base to build your email and social media campaigns.
- Measurable results: Firmographic data can be effectively measured and tracked, helping you improve email performance.
Firmographics vs. Demographics: How Are They Different?
Firmographics and demographics are crucial marketing strategies but each applies to different types of entities — individuals and businesses.
The table below elaborates on the key differences between firmographic and demographic segmentation methods.
| Aspect | Firmographic Segmentation | Demographic Segmentation |
|---|---|---|
| Definition | It shows the descriptive attributes of a company. | It shows the characteristics of individuals, such as age, gender, income, etc. |
| Application | It’s primarily used in B2B marketing segmentation, sales, and customer acquisition. | It’s used in B2C marketing segmentation. |
| Key data points | ‣ Industry ‣ Company size ‣ Revenue ‣ Location ‣ Growth rate, etc. | ‣ Age ‣ Gender ‣ Income level ‣ Location ‣ Marital status, etc |
| Use in email marketing | It helps to create targeted B2B email lists and strategies. | It helps reach specific customer segments based on their characteristics. |
| Data collection resources | It’s typically gathered from business databases, such as financial filings and industry reports. | It’s extracted from social media profiles, surveys, customer purchase history, and market research reports. |
| Customer decision-making process | The decisions are made by multiple stakeholders and are based on organizational needs. | The decisions are made by individuals or households based on short-term needs, preferences, and lifestyle. |
Firmographics also provide up-to-date information and insights on the changing market trends, often essential when adapting messages to suit the customer’s email marketing journey.
Typically, you’ll review the size, industry type, and similar when conducting a firmographic study. Let’s discuss the common variables to help you accurately identify your customer segments.
Firmographic Segmentation Variables
Firmographic segmentation can help you gain deeper insights into the market, such as growth trends or the annual revenue and profit potential of a company.
Common firmographic attributes include the following.
| Variable | What it means |
|---|---|
| Industry | It refers to segmenting businesses according to their area of operation, such as retail, healthcare, etc. |
| Company size | The company size is based on the number of employees or revenue. They can be categorized into small, medium, and large enterprises. |
| Geographic location | It means identifying a company as per its place of operation, such as the state, city, or region. |
| Annual revenue | Grouping businesses based on their annual revenue potential. For example, <$1M, $1M-$10M, etc. |
| Number of employees | It refers to segmenting the size of the workforce, often correlated with operational efficiency. |
| Legal structure | It shows how the business is legally structured. For example, LLC, partnerships, etc. |
| Growth trends | Targets companies with a potential for growth in terms of employees or profits. |
| Ownership status | It shows whether the company is public, privately owned, or government funded. |
| Stage in the business lifecycle | Identifying whether the company is a startup, in the growth phase, or declining. |
| Technological adoption | It segments companies based on the adaptation to technology, such as early adopters, mid-adopters, or slow-learners. |
| Market served | Distinguishing companies based on the market they serve. For example, local, national, or international markets. |
The above variables serve as a definitive starting point to customize different types of emails and maximize conversions.
But the challenging question is: how do you gather such enormous amounts of data about companies? Is it legal to access this type of information?
We discuss them in detail below.
How to Gather Firmographic Data?
The best segmentation approach for businesses is the one that uses trustworthy resources. While there are heaps of data available online, not all the information might be authentic and accurate. It’s crucial to find a reliable medium to source firmographic data.
Here are 8 methods to gather firmographic data.
| S.No | Medium | Where to access information? |
|---|---|---|
| 1. | Public databases and directories | ‣ Company websites ‣ Business directories, such as LinkedIn, ZoomInfo, and Crunchbase. ‣ The chamber of commerce or industry associations |
| 2. | Surveys and questionnaires | ‣ Send targeted email surveys to companies ‣ Incentivize participation with discounts, access to exclusive content, and free reports |
| 3. | Social media platforms | ‣ LinkedIn can provide exclusive company insights, such as employees, industries, and location ‣ Twitter and other social platforms can provide similar company information |
| 4. | Lead generation tools | ‣ Certain lead generation tools, such as Hubspot and Salesforce can scrap firmographic data through integrated datasets |
| 5. | Government and regulatory filings | ‣ Many government portals, such as the Securities and exchange commission in the U.S. have firmographic data |
| 6. | CRM | ‣ Use your own CRM to identify potential customers |
| 7. | News and press releases | ‣ Regularly monitor business news sites to know about expansions, acquisitions, or new products or services |
| 8. | Website traffic analysis | ‣ Using Google Analytics or similar tools can provide access to firmographic data |
Having a broad range of firmographic data can help you refine your marketing strategies, regardless of your marketing medium.
For instance, email marketing is a powerful tool to reach potential customers in their inboxes. You can use firmographic data to customize each email campaign to fit customers’ preferences and needs.
We’ll review how to use firmographic data with email marketing to land more conversions and sales.
Common Use Cases for Firmographic Data in Email Marketing
Firmographics in email marketing can reduce your email marketing costs and avoid common mistakes that may increase your unsubscribe rates.
An email campaign sent to the wrong customer segment can result in more opt-outs, increasing your customer acquisition costs. Using firmographic data will help you manage customer expectations, retain customers, and increase brand loyalty.
Check out the common use cases of firmographic segmentation in email marketing.
Email List Segmentation
Email segmentation strategies divide customers into different groups based on their preferences and needs. This helps you personalize email campaigns with promotional offers, industry data, or other relevant information.
Firmographic data allows you to:
- Create targeted email campaigns for different industries, prioritizing customer needs.
- Customize messaging based on the company size.
- Pitch premium products to financially sound companies and vice versa.
Custom Product Recommendations
No two companies might need the same product, even though they belong to the same industry. Firmographic data can assist in recommending products that are customized according to each business’s needs.
You can send product launch emails, customized videos, or similar content to capture user interest. Additionally, you can tailor your product’s value proposition so it satisfies each client’s objectives and expectations.
Lead Scoring and Qualification
In B2B marketing, not every marketing lead is qualified to convert. People typically compare and verify information, taking more time to become a customer. Assessing fit for your products and services is essential to avoid wasting resources and time.
Firmographic data determines whether a lead is an ideal fit for your product or service. For example, by understanding the growth stage of your target company, you can time your emails well, and nurture users through the buying journey until they are ready for a sale.
Automated Campaigns Based on Firmographic Triggers
Firmographic segmentation is important for automation. Emails can be triggered based on a company’s stage in its lifecycle, assisting you in offering products and services for effective scaling.
Event Invitations and Networking Opportunities
Firmographic data can be used to send event invitation emails about specific webinars or conferences tailored to the industry. It can also foster networking opportunities by helping you invite or connect with C-level executives.
Create Win-back Campaigns
Knowing your target audience’s company size and growth trends will allow you to create specific win-back campaigns for companies that have not yet engaged with your messages. It’s a fair opportunity to re-engage past customers and stir curiosity with potential customers.
Competitor Targeting
Firmographic data can provide insights into common purchase behavior, helping you highlight your product values and provide better solutions than your competitors.
Although firmographic segmentation ensures your email marketing is relevant, accurate, and personalized, it comes with its downsides.
We’ll examine essential aspects to consider when using firmographic segmentation in emails.
Factors to Consider While Using Firmographic Segmentation
Firmographics is a vital aspect of B2B marketing, but it’s also important to consider factors like:
- Data quality: The accuracy and completeness of your firmographic data drive your email marketing strategies. Ensure that the data is reliable and up-to-date.
- Segmentation depth: Firmographic segmentation can be as narrow or broad as needed. Consider the depth of each firmographic variable to maximize email revenue.
- Segmentation overlap: A few companies may fall into different segments, making it easier to cross sell or upsell products or services.
- Limited insights: Firmographic data does not show individual preferences or company culture, making it more challenging to personalize offers.
By properly understanding firmographic segmentation, you can improve email marketing performance and add more customers to your sales list.
Start by using a reliable email marketing platform like Campaign Refinery, which will help you streamline your email marketing process with premium tools and features.
Campaign Refinery Makes Firmographic Segmentation Easier
Campaign Refinery is an intuitive email service provider with cutting-edge email deliverability, premium tools, and excellent customer service.
We’re all about providing effective email marketing solutions and tools for psychographic segmentation, firmographics, or any other segmentation methods. Clients can divide their email lists based on email tags, create engaging customer journeys, and increase open rates.
Email tags can also be used to track and improve email performance by using gamified elements.
Our latest Audience groups segmentation feature lets you combine different customer segments for the same email campaign, saving you time and resources. This feature allows you to merge recently engaged and recently added subscribers to maximize reach and revenue.
Effortlessly categorize your audience, use robust analytics, and build successful email marketing campaigns with Campaign Refinery!
