The thing that makes ABM really special is its focus and precision. Instead of trying to reach a wide range of businesses, ABM is about investing resources and efforts in a small, specific group of companies, called target accounts. We’ve talked about how to find high-value target accounts in a previous article.
Now, you may be wondering how businesses decide which accounts or businesses to focus on. This is where something called ABM segmentation comes in. This is the topic we are going to explore in more detail today.
Understanding ABM Segmentation
Account-Based Marketing or ABM segmentation, at its most basic, is about finding and sorting high-value business customers or accounts into different groups or segments. This helps us understand who we should focus on with our marketing efforts.
These groups can be created based on many different things. For example:
- what industry the business is in
- how big the company is
- where it’s located
- and even specific problems the business is facing.
The main goal of this is to make sure your marketing approach is tailored for each group. By doing this, you can make sure that you are sending the right marketing message to the right business, and at the right time.
The Importance of ABM Segmentation
ABM segmentation is really important for making your marketing work as well as it can. It helps you identify important business customers (also called “key accounts”) and understand what makes each of them unique. This understanding can help marketers create messages and marketing campaigns that are specially tailored for these businesses, making them more likely to be interested and respond. This can make it easier to make sales, and can speed up the whole sales process.
Another great thing about ABM segmentation is that it helps you decide where to focus your marketing resources. By understanding which accounts are most likely to give good returns, you can make sure you’re using your marketing resources in the best way possible. This means your marketing efforts are focused on the areas where they’re most likely to get results.
ABM Segmentation in Action
Let’s say you’re a cybersecurity solutions provider. Your ABM segmentation might involve categorizing accounts based on their industry (financial services, healthcare, retail, etc.), their size (SMBs, mid-market, enterprise), and their specific cybersecurity needs (compliance, data protection, incident response). This granular segmentation allows you to tailor your marketing messages to each segment’s unique needs and challenges, enhancing relevance and fostering engagement.
How to Approach ABM Segmentation
There are several key steps to effective ABM segmentation:
Define Your Ideal Customer Profile (ICP): This is a hypothetical description of the perfect account for your product or service. An ICP typically includes demographic, firmographic, technographic, and psychographic characteristics.
The ICP is like an artist’s sketch of your perfect customer. It’s a detailed description, not of a real individual, but a fictional entity that represents the type of company that would get the most value from your product or service.
So, what does this sketch include?
Demographic Characteristics: This refers to basic information about the business. Think of it as the company’s ID card – what’s its age (how long has it been operating), its gender (the industry it belongs to), and its income (the annual revenue it generates).
Firmographic Traits: These are the broader strokes that tell you more about the company’s business context. What’s the size of the company in terms of employees? Which market sector do they operate in? Where is the company located geographically?
Technographic Details: This is the digital footprint of the company. It includes the kind of technology they use or are likely to use. For instance, are they cloud-based? Do they prefer iOS or Android systems? What kind of software or tools do they rely on for daily operations?
Psychographic Elements: Lastly, this involves more abstract but equally important elements such as the company’s culture, values, and challenges. What are their goals? What keeps the CEO awake at night? What are their attitudes towards innovation and change?
Identify Potential Accounts: Using your ICP as a guide, identify potential accounts that fit your defined criteria. This can be done through a combination of first-party data and third-party insights.
Segment Your Accounts: Once you have a list of potential accounts, divide them into distinct segments. The basis for segmentation can vary, but it should reflect meaningful differences that impact your marketing approach.
We’ll take another example of a company that provides a cloud-based software solution designed to help businesses manage their finances better. You’ve identified a list of potential accounts, companies ranging from small startups to large enterprises, spread across various industries like tech, healthcare, retail, and education, located in different parts of the country.
Now, it’s time to divide these potential accounts into distinct segments, based on meaningful differences.
- Industry Segmentation: One way to segment your list is based on the industry each account belongs to. For instance, tech startups may have different financial management needs compared to healthcare organizations or retail companies. A tech startup might be more focused on managing venture capital and rapid growth, while a healthcare organization might be more concerned with regulatory compliance and a retail company might prioritize inventory management.
- Size Segmentation: You can also segment based on the size of the company. Small businesses might need more basic, user-friendly features, medium-sized businesses might need more robust capabilities as they scale, and large enterprises might need complex, highly customizable solutions to fit their existing systems.
- Geographical Segmentation: Segmenting by geographical location can be useful too, especially if different regions have different regulations or business practices. A company operating in California might have different financial management needs than a similar company in New York due to different state regulations and tax laws.
Personalize Your Approach: Now that you have your segments, you can tailor your marketing strategies to each segment’s unique needs and characteristics.
Analyze and Refine: As with any marketing strategy, it’s crucial to monitor your results, analyze the effectiveness of your segmentation, and refine your approach as needed.
As ABM continues to grow in popularity, the importance of effective ABM segmentation only intensifies. Companies that master the art of ABM segmentation will have a distinct advantage, enabling them to engage their target accounts more effectively and deliver more compelling, personalized experiences.
In conclusion, ABM segmentation is a powerful tool in the arsenal of B2B marketers. By categorizing high-value accounts into distinct segments, marketers can personalize their approach, improving engagement, and ultimately driving better results. Now that you know the answer to “What is ABM segmentation?”, it’s time to put this knowledge into practice. Happy segmenting!