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The ultimate guide to firmographic segmentation

What is firmographic data?

B2C marketers use demographics to describe their market segments. B2B marketers need data that describes businesses instead of consumers, or firmographics. B2B marketers collect firmographic data that defines their target market and includes their industry, number of employees, legal status, company size, financial standing, and other business-related variables.

Marketers collect firmographic data from multiple sources. Publicly available information will list business names, industry categories, location, estimated annual revenues, and company leaders. This low-cost approach provides valuable market insights, but the data may be outdated or not detailed or relevant enough. 

Marketers also use surveys to collect data. Survey results include current information about the company’s status. Since the business environment changes rapidly, surveys are a great way to collect fresh and relevant data.

For B2B marketers, firmographic data is a must-have marketing tool to identify their target market.

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What is firmographic segmentation?

What if a marketer’s ideal market is small tech start-ups in Atlanta? Or large commercial bakeries in Minnesota? Each of these segments has unique characteristics and buying patterns that marketers want to know. Marketers use firmographic segmentation to classify their customer markets.

B2B marketers research companies by their industry, size, location, and other factors to better understand their markets. This segmentation approach helps them properly position their products and services to their ideal market.

Firmographic segmentation variables include a business description, financial performance, and industry insights as major categories with unique variables for each type. B2B marketers are now combining firmographic data with other types of data to improve their segmentation efforts.

General Business Firmographic Data Examples

Industry classification - Businesses are classified by the Standard Industry Classification (SIC) or North American Industry Classification System (NAICS). Marketers can search the NAICS website for both SIC and NAICS codes, including business size and metropolitan areas.

Ownership and Legal Status - Businesses come in all categories, including sole proprietorships, limited liability corporations (LLCs), limited liability partnerships, private corporations, and public shareholder-owned corporations. Businesses within an industry may also be part of a franchise or owned by a larger parent company. Marketers may be interested in not-for-profits or government organizations. Each type of business will have its unique characteristics to consider. 

Years in Business - Are you targeting a new startup or a mature organization that has been in business for a long time? The number of years in business will provide clues about their financial strength and experience.

Number of Employees - The number of employees will indicate the type of business - small, medium, or large. Marketers want to know if a company is brand new with a few employees, a small and medium-size business (SMBs), or a large enterprise to target their marketing efforts better. 

Location - Businesses may have one location or hundreds of offices around the world. Location types can include headquarters, manufacturing facilities, stores, and offices in many geographic areas.

Customers and Products - What does your market sell, and who are their customers? Firmographic data details what products and services they will need.

Market Size - How big is the market your customer serves? Is it a highly focused niche market or a global commodity? B2B marketers need to know this information to understand the market potential.

Financial Firmographic Data Examples

Marketers want to know about the market's business performance to see if it is a viable market and research past, present and predicted performance.

Financial - What is the annual revenue and profit potential of your target market? Are their sales growing? Are there events that affected the credit rating of companies in this market? B2B marketers should understand their market's financial viability by researching sales, profits and if they can obtain credit to purchase goods and services.

Growth trends - Is the target market experiencing an upswing in sales? Is the industry downsizing because of outdated products or technology? The industry’s direction will indicate if businesses in the market will be profitable.

Industry Firmographic Data Examples

The industry a business operates in will influence its success. Firmographic variables show B2B marketers predict if a market segment will be booming.

Competitors - How many competitors are in the industry? Are they new to the industry, or do they have a significant market share? B2B marketers can verify if there is room in the industry for another competitor or if it is time to disrupt an outdated market with new ideas.

Industry influencers - Are there thought-leaders, social media leaders, or other people who influence the industry's direction?

Technographic Data - What kind of technology does the industry use? B2B marketers are increasingly using technographic data to understand leadership and employee behaviors that drive purchase decisions. It also reveals what technology products customers have, need, or will need in the future.

Collecting firmographic customer segmentation has never been easier. Every size company can easily access online data banks, social media sites, and news to segment their market. In addition to online research, surveys provide more specific data to validate how the target market responds to the company’s value proposition.

How to use surveys to gather firmographic data

Public databases, government websites, and fee-based research websites will provide much of the firmographic data businesses need. However, they must also consider if the information is “stale” or outdated.  For instance, some research and company information before 2020 may not include the impact of dramatic business upheavals, closed locations, or reduced revenues.

Marketers require current information.  Decision-makers depend on Marketers to develop relevant messages which need timely data. Sales teams rely on current, accurate data to identify prospects and close deals. Firmographic data helps marketers to position their products accurately, create relevant value propositions, and increase sales.

Surveys provide up-to-date data for actionable insights for Marketing and Sales. By surveying people within the right target market, B2B marketers keep their pulse on how businesses respond to current events. They can track industry trends that impact B2B buying behaviors and adjust marketing messages to match current needs.

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Example firmographic survey questions

Structuring the survey questions is critical to get the right insights. Here are relevant questions to ask.

What is your company's industry? (Select all that apply)

Answers should be compared against SIC and NAICS codes to make it easier to categorize industries.

How many people are employed at your company? 1 - 49, 50 - 999, 1000 - 4999, 5000 or more

The number of employees will indicate how big the company is. Fewer than 50 employees is a small business, while SMB organizations can have up to 999 employees. Over 1,000 is considered large, while over 5,000 employees may be an enterprise or global business. The right size business will help hone the marketing message and sales efforts.

What was the approximate annual revenue of your company last year (in dollars)?

Annual revenues are an essential firmographic segmentation variable that determines the right customer fit for their products and services.

A snapshot in time of annual revenue is good. Still, if there was a dramatic industry event, Marketers will want to compare income over several years to see if there was a dramatic upswing or decrease.

Which best describes the current growth trajectory of your company? Growing, Stable, Downsizing, Other (please specify)?

The growth trajectory will indicate how rapidly a company is expanding (or contracting). Growing firms, like startups, will require products and services that help them build their business foundation. Stable firms may be looking for improvements to create a competitive edge, where downsizing firms may be looking to reduce expenses. The industry may also influence the growth trajectory.

Which best describes your company's organizational structure? An individual firm, Standalone entity, Subsidiary of a larger organization, Limited liability corporation (LLC), Partnership, Publicly owned company, Privately held company, Other (please specify)

The organizational structure offers clues about decision-making, tax status, and financial position. While information about public companies is available online, other companies may protect their confidentiality. Surveys can help collect hard-to-find details.

Which of the following most closely matches your current job title? Intern, Entry Level, Analyst / Associate, Manager, Senior Manager, Director, Vice President, Senior Vice President, C level executive (CIO, CTO, COO, CMO, Etc), President or CEO, Owner, Other (please specify)

Answers to this question will reveal the respondent’s authority and decision-making level, and knowledge about the company.

How long have you been in your current position? Less than 1 year, 1-2 years, 2-4 years, 4-6 years, 6-8 years, 8-10 years, More than 10 years?

The respondent’s years of service can indicate their level of knowledge and perspective about the survey questions.

What level of decision-making authority do you have on purchasing hardware, software, or services for your organization? Final decision-making authority (individually or as part of a group), Significant decision-making or influence (individually or as part of a group), Minimal decision-making or influence?

Marketing and Sales want to know decision makers’ insights to increase their sales success. This question reveals if they have the authority necessary to make purchase decisions. Future questions may be targeted at these respondents to gain more technographic and purchase behavior information.

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Benefits of firmographic segmentation

Low cost, high impact information

Firmographic information is relatively easy to collect at minimal cost when done online. From free information on government websites to fee-based research sites, collecting firmographic data for a target market requires mostly sweat-equity (labor) to put it together.

Surveys are another inexpensive and convenient way to collect firmographic data. Marketers can choose their ideal respondents and receive customized survey data within a short period, helping them make better decisions.

Better B2B Target Marketing

Firmographics is an essential part of B2B target marketing. Marketing to businesses is different from marketing to consumers. B2B target marketing requires knowing how a company fits into their industry. Organizational, financial, and industry changes are the defining variables that influence how, when, and if a business will buy. The more B2B marketers know their target market, the more accurate their value proposition messaging will be.

Improved sales effectiveness

Relationship selling used to be the norm. Now, it’s all about the data. Sales need highly qualified leads, and they depend on Marketing to provide that data. Marketers should stay on top of industry trends, leadership changes, new competitors, revenue insights, and technology upgrades. Marketing is the link between customers and sales, and B2B marketers who share new customer data with Sales make everyone more successful.

Marketers can quickly adapt to industry changes

Some industries are booming while others are disappearing. Marketers must now focus on current data, including survey information, that offers new industry insights. Keeping abreast of new competitors, changing regulations, and financial upswings and downswings are necessary to keep marketing messaging relevant. Firmographics provides Marketers with up-to-date data for current, relevant insights to stay ahead of industry changes.

Firmographic segmentation examples

Example 1: Increase prospects

With today’s technology, companies have a lot of data on hand. But how can they put that data to good use with firmographics?

Simply put, if a customer buys a product in one location, do similar customers in that area need the same product?

There is a company name, address, zip code, and other relevant information for every purchase transaction. Using products purchased, customer’s company size, NAICS code, and other firmographic data, marketers can target other companies with similar business variables.

This type of analysis is called propensity modeling because it assigns the likelihood of similar B2B customers buying the same product, helping sales and marketing hone in on likely buyers.

Example 2: Keeping ahead of lifestyle trends  

B2B Marketers need to keep the pulse of their customers. But they also need to know what is happening to end-users. Firmographic business variables can change quickly, and B2B Marketers have to be ready to react. 

As a result of the pandemic, people stayed home. They also ordered from Amazon, their local grocery, pharmacy, and restaurants. How do these businesses make sure purchases arrive safely to consumers? They use flexible, plastic pouches that are lightweight and less expensive than cardboard and keep deliveries safe. Understanding which businesses have eCommerce shipping and delivery are growing markets for flexible packaging manufacturers, but only if they keep track of stay-at-home consumer trends.

In 2020, many homeowners renovated their bathrooms and plumbing to improve in-home hygiene. As a result, home plumbing fixture sales skyrocketed while commercial plumbing needs plummeted because of low occupancy rates in offices. B2B manufacturers who focus on the smaller homeowner niche of plumbing supplies are poised to win, while those in commercial plumbing need to rethink their marketing efforts. 

It is becoming more critical for B2B marketers to keep track of B2B and B2C consumer trends to keep sales flowing.

Example 3: Firmographics and AI  

Marketers are now using advanced data to better research customers' behavior. For instance, firmographics are often combined with internal sales and usage data, external data from search engines and social media, and other sources to provide rich customer insights. Technology providers use AI applications to combine data from many sources to create a clear picture of customer behaviors, needs, and solutions.

Why are advanced customer insights so important? B2B buyers collect their information, with 68% stating they do their own research before speaking with a sales rep. Marketing and Sales need to be fully armed with customer needs, wants, and solutions long before they meet with a prospect for the first time. Firmographics and AI provide the information they need to be successful.

Example 4: Creating a personalized message

Personalization increases the ROI on marketing spend by 5 to 8 times and can increase sales by at least 10%. So why don’t more marketers personalize their marketing message? 

In short, they need data that reveals the individual characteristics of their prospects and customers.

Firmographics helps streamline marketing messages by addressing an industry's unique problems, company size, or buyer. Industry and financial variables guide content marketing to the right companies and decision-makers, simplify the buying process, and increase customer retention.

Combining firmographics with CRM data and other sources makes it easier to create powerful, personalized messages that drive buyers’ interest and increase sales.

B2B firmographic segmentation vs. B2C segmentation

B2B marketers have different challenges than B2C marketers, and they must use other methods to segment their markets. Here are several characteristics where B2B and B2C marketing differs.

Customers. B2B companies have fewer customers who buy higher-priced items. These companies focus on the relationship with these customers to influence buying decisions. B2C companies may have thousands or hundreds of thousands of customers to reach. They use their brand image, not individual relationships, to create a personal connection to their products. 

Characteristics:  B2B companies are classified by industry, size, employees, and other business data. B2C customer data may include location and financial data and have psychological factors that influence their buying decisions.

Firmographics vs. Demographics. B2B marketers use firmographics to identify business characteristics, narrowing their target market to a list that may range from a dozen to a few hundred prospects. Demographics categorize people by more variables and strive to understand how those variables influence buying behavior.

Decision Makers and Influencers.  B2B sales may involve a small number of decision-makers, each with different roles in the customer’s company. B2C sales seek to drive influencers to use their products, who then help thousands of customers make their buying decision.

ROI vs. Value. B2B marketers must demonstrate ROI for their products. The value received for the product typically must exceed what the customer paid for it. B2C marketers promote the psychological value received for the price paid, which may increase status, self-confidence, or better appearance.

B2B and B2C marketing professionals are both challenged to segment their markets into customers that will most likely buy their products. However, attracting and retaining those customers requires very different approaches.

SurveyMonkey makes firmographics easy

Need a quick survey? Or an in depth analysis? SurveyMonkey makes it easy with pre-designed or custom templates. Your B2B marketing team will stand out with better insights for lead generation, market insights, and qualified leads. SurveyMonkey’s Audience Panel is the right choice for actionable insights.

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