If you want to stay ahead in the B2B market, consumer satisfaction should be your top priority. Your customers judge what you offer based on their unique needs, and market segmentation helps you figure out exactly who your customers are and what their needs are.
Firmographics is one type of data that focuses on B2B (business-to-business) customers. Companies use firmographics and demographics data to create customer profiles, that are eventually used to market their products and services.While demographics are more focused on building profiles by grouping the population of a certain geographic region under different characteristics, firmographics concerns itself with identifying the right sector of the audience, it does this by dividing potential clients into different groups to work on customer satisfaction.
Let's dive into more details on firmographics.
What is Firmographic data?
Firmographic data is information about a company's key characteristics that can be used to define market segments and gain insights into the needs and desires of these organizations. It can include information like company size, industry type, company reach, annual revenue and expenses, ownership type, growth trend and much more.
Like other primary forms of segmentation, Firmographic data is collected and then used to analyze B2B audiences based on their characteristics, making it much easier to target, customize, market, and identify high-value customers via the Firmographic Segmentation process.
Attributes of Firmographic segmentation
Firmographic segmentation examines and categorizes B2B audiences based on common characteristics. While B2B companies can use a plethora of variables for firmographic segmentation, we'll focus on the five most important aspects of firmographic segmentation:
1. Industry
The Industry is divided into 4 broad categories.
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Primary Industry: Agriculture, Mining, Fishing.
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Secondary Industry: Manufacturing, Processing, Construction.
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Tertiary Industry: Hotels, Real-estates, Restaurants.
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Quaternary Industry: Health Care, Education.
This feature is essential for firmographic segmentation. It entails categorizing your target audience based on the type of product/service they offer. Targeting the right industry can help your segmentation efforts, and vice versa. It is beneficial to understand the specific industry in which your product/service is valuable.
2. Location
This is based on the geographical location of the target audience. It considers factors such as city, country, state, and environment. The location of a company influences how customers buy its products and determines a brand's ability to sell and distribute. This firmographic attribute can be used by B2B marketers to identify areas where their product adds value to consumers.
3. Size
This firmographic attribute can be defined using an organization's annual revenue and employee count. It indicates the size of an organization, whether it is micro-scale, small-scale, medium-scale, or large-scale.
In order to target the right audience under the size attribute, you must first ask yourself whether your target market is a Fortune 500 company or a small start-up. You must ensure that your target market can afford what you're offering or risk losing money.
Similarly, an organization's employee size can indicate whether it is a small, local business, or multinational, as well as its purchasing power and likelihood of returning customers.
4. Status and Structure
This usually refers to an organization's legal status. It could be a sole proprietorship, a partnership/limited partnership, a corporation, a limited liability company (LLC), a non-profit organization, or something else. the funding type and hierarchy differ, hence understanding which organizations would benefit the most from your product/service will inform your marketing strategies and ensure increased profits.
5. Performance
This firmographic segmentation feature encircles an organization's accomplishment over time. It considers factors such as business execution, employment growth, financial performance, and revenue increase or decrease. Grouping your target audience based on their performance over time is an effective way to determine their current position and predict their future behavior, which is useful in developing sales and market strategies.
Furthermore, the Executive title and Sales cycle of a company are critical variables in firmographic segmentation. Knowing the executive titles of your target audience(s) allows you to identify the key decision-makers and influencers in your target organization. Are you aiming for the CEO, the Managing Director, or the CFO? Knowing which customers can be relied on helps you avoid wasting time and effort on the wrong decision-maker.
Understanding your target audience's sales cycle stage always determines the type of information you provide to them. The stages of the sales cycle are Awareness, consideration, and decision.
Let's take a closer look: In the awareness stage, a company is just learning about what you offer as a B2B company and is most likely looking into other options. Your brand may be considered a viable option during the consideration stage. The decision stage indicates that they have determined that your company meets all of their requirements and will select you over competing options. Knowing your target market's cycle stage allows you to know when to push them to the next cycle stage and aim for the bull's eye.
Why is Firmographic Data important?
Firmographic data has aided many B2B organizations in identifying their target segment and ideal customers. A single approach for all types of matrices does not yield positive results. Using a different approach for each grouped segment with the help of firmographics yields the desired result.
Here are the advantages of firmographic data:
1. Helps Identify B2B/C2B Target Segment
Firmographic data is useful for B2B companies in identifying their target audience. B2B companies' target audience consists of decision-makers in the sector they are prospecting, such as CEOs, Managing Directors, CTOs, and CFOs.
Identification of these target segments is critical because they are the main influencers in your prospective organization, purchase authorization, and approval of the services you provide; this can be useful in customizing sales and marketing approaches. Additionally, understanding these segments helps create SEO-optimized content that resonates with them, and a SERP checker can then evaluate how well this content ranks for relevant keywords.
2. Refines Advertising Campaigns - Promotional Tactics
Advertising based on assumptions can be difficult today. If you make incorrect assumptions about a target audience, you may end up wasting resources if they are not interested in your product/service. Instead, by gathering as much information as possible about your target audience, you can then use that information to target ads more effectively.
For example, if you're running ads on L██████In (censored due to legal settlement - Referring to the professional social network), you can target audiences based on the firmographic data we discussed earlier.
3. Helps Increase ROI
Understanding current and prospective customers through firmographics allows you to allocate and utilize resources in a calculated manner, resulting in the expected results and increased return on investment.
How do you get Firmographic Data?
Data Acquisition, processing, and analytics are extensive processes and for them to be meaningful, up-to-date quality data is crucial. Let's look at some of the ways of data acquisition.
1. 3rd Party Websites
Today, you can obtain ample information on any company with the click of a button, but the accuracy and relevance of such data can be a challenge.
Customer data platforms, marketing intelligence, and a company's public databases are examples of third-party websites that provide firmographic data. For B2B businesses to use for marketing and lead generation, information from these sources is accurate and reliable.
2. Conducting Surveys
Online surveys have grown in popularity as a cost-effective way for businesses to collect data on their customers. However, they can be time-consuming. B2B marketers, for example, can create surveys to gather information about a company's size, industry, location, and revenue.
Even if it appears to be a simple way to obtain direct data, there is a chance that your target audience will withhold or even refuse to provide certain information for reasons best known to them.
3. L██████In (censored due to legal settlement - Referring to the professional social network) Search
L██████In (censored due to legal settlement - Referring to the professional social network) search is another popular source of firmographic data; most, if not all, businesses have a presence on the platform. It's also a low-cost method of gathering information about your target market.
4. Professional Data Provider
The data sources listed above are useful, but getting data from a reputable data provider is the best way to obtain massive, structured, and accurate data on your target market.
Enrich Layer's company profile API provides firmographic data, allowing you to group or filter organizations based on category, how much a company has received in funding, past and current employee data, acquisitions and exits, and much more. Furthermore, it is a one-step process that requires less time.
Cross-checking with publicly available sources is also advised to ensure consistency of accuracy.
The Bottomline
Firmographic attributes should be used by B2B companies to create ideal customer profiles. All of the various matrices provide opportunities and necessitate different approaches. Be as specific as possible.
Know your customer and comprehend your consumer.
Utilizing the right amount of resources is critical when targeting prospective organizations. Gathering firmographic data from web searches and surveys can be time-consuming, and you may end up with unnecessary information; instead, it is best to outsource firmographic data to professional providers such as Enrich Layer, which offers an amazing data set of companies.
FAQs
Why is firmographic data often overlooked?
If you are a startup or a small business, you might overlook firmographic data due to limited resources or just aren’t aware about its potential. But the data is invaluable to identify and target the right market segments from the early get go.
For established businesses, it helps refine strategies, maintain competitive edges, and expand into new markets.
How often should firmographic data be updated?
Firmographic data should be updated at least monthly or whenever significant market or company changes occur.
For instance, Enrich Layer gives you guaranteed data freshness, with the flexibility to choose data freshness from real-time, data that’s 29 days or younger, or data that’s older than 29 days.
Are there any ethical or legal concerns when collecting or using firmographic data?
Yes, if you are scraping for data manually, there are certain ethical and legal concerns like transparency in data collection and respecting privacy laws like GDPR and CCPA.
The easiest way to overcome these concerns is to lean towards a professional data provider who knows what they’re doing. Outsource your risks to the professionals.
How can you integrate firmographic data into your CRM system?
You can integrate firmographic data into a CRM using APIs, data enrichment tools, or by importing data from trusted sources. This helps in segmenting leads, personalizing outreach, and tracking account details.
What’s the best way to validate the accuracy of firmographic data?
Validate data by cross-referencing multiple reputable sources, conducting spot checks, and using real-time verification tools.
For instance, websites like Crunchbase and the platform are considered trusted sources on company and individual data. Enrich Layer pulls data directly from these trusted sources so you get verified data, in real-time.