Firmographics: areas of application
Once the appropriate target market has been defined, the company could also use firmographics to identify competitors.
Competition analysis is an essential activity when it comes to selecting a market to attack.
Returning to the example of the glass machine company, it is useful to know how many competitors are already present in Germany, which product lines they offer and what their turnover is.
In this way, the company can develop new strategies to cope with the presence of competitors.
Similar considerations apply to the search for suppliers: using firmographic segmentation can be very useful to find companies that offer suitable components for our machines (e.g., particular types of pressure sensors).
How to segment the B2B market
After clarifying the benefits and areas of application of firmographic segmentation, let’s see how it can be used by B2B marketers.
There are two ways:
- Through traditional solutions such as participation in trade fairs, events, conferences and other meeting opportunities for professionals.
- Through digital tools to analyse organisations, grouping them according to the same characteristics and integrating this data into business operations.
Let’s see the differences between the two approaches.
Managers in our company might be tied to more traditional ways of working and choose to find new customers at a trade fair abroad.
After travelling and setting up its own stand, the company will wait to meet with representatives of other businesses – for example companies active in the processing of glass for the building industry – to propose its products.
Once the business cards have been exchanged and the trade fair is over, the account managers will contact the people they met, perhaps after searching online for more information about their companies.
This process usually takes months and is costly, and there is not always a guarantee that the right people will be found at the event.
Digital tools have the advantage of reducing the time and costs of this process.
Firmographic segmentation and digital technologies: a match made in heaven
To segment companies and other organisations, the first tool used in the digital environment is business information databases.
Within them, companies are classified according to the industries they belong to (e.g. agri-food, machinery, etc.) or according to quantitative parameters such as turnover and number of employees.
Usually, these databases must be consulted manually to know the peculiarities of the companies within them.
Today, however, there are solutions that automate this process, analysing the online presence of companies using AI to understand what activities are carried out, the products offered and much more.
The combination of these two factors – databases and AI algorithms – is a winning combination. What are its strengths?
- Reduced work time: by automating the analysis of web sources, these tools enable an overview of the target market to be obtained in just a few minutes.
- High precision: thanks to AI, it is possible to identify companies with specific characteristics, developing a detailed segmentation.
- Completeness: the international coverage of the databases allows you to gain in-depth knowledge of new markets.
- Affordable costs: the automation of digital technologies reduces the costs of trade fairs and business trips.
- Possibility of customisation: by allowing users to freely set the parameters for the search (e.g., company size or location), the solutions developed by Matchplat allow users to segment the target market in an intuitive way.
We have found out what is meant by firmographic segmentation, and how this concept overlaps with demographic segmentation used in B2C.
Having seen the benefits (optimisation of budgets, increased return on investment, etc.) we looked at the areas of application of this activity.
In addition to potential customers, it also identifies competitors, suppliers, joint venture partners and much more.
Next, we compared the methods with which to carry out a firmographic segmentation.
We have seen that a traditional approach based on live events is important to keep in touch with the market, but nowadays it is not enough.
The segmentation strategies used in B2B must include digital solutions that stand out for their speed and accessibility.