🔆 The problem with Demographic & Firmographic segmentation

🔆 The problem with Demographic & Firmographic segmentation

This week I’ll continue to focus on the art of segmentation. Today I’ll address the most used ingredients in the B2B space in segmentation: ‘Demographics’ or ‘Firmographics.’

What I often see is that they’re mixed up under the same denominator to do the same, i.e., a summary of all the things that you can easily fact-check about your ideal customer:

  • The characteristics of the businesses (firmographics)
  • The key individuals/personas that you target within those firms (demographics)

Essentially, this is the foundation of your segmentation – not more, not less. It helps you to define the outer limits of the collection of organizations where you can potentially deliver the most significant impact.

The good thing: Data is easy to obtain. Targeting is straightforward. It’s cost-effective, simple to measure, and easy to monitor trends.

The biggest downside: It’s too vague (no matter how specific you get).

Just the fact that detailing demographics/firmographics tells you there are 1000, 10.000, or 10.000 organizations you can target doesn’t mean they’ll buy.

All the facts outlined only help you to do the 1st level of sifting. As such, there’s often enormous waste embodied in this method. It might very well be +90%.

There are too many assumptions. Context is missing.
And as such, every €, $, or £ you spend to attract potential customers is a gamble and potentially a big driver for waste, slow down, and frustration.

This is precisely why it’s critical to bring in other ingredients to address the motivators and the self-interest that drive the businesses (and the people they employ) where you can make the most significant difference.

So my question to reflect upon today:

Realizing that detail still matters – Looking at your current demographics/ firmographics definitions: what can you refine to niche down for more accuracy?


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