#66: How To Effectively Target B2B Buyers in 2025

Speaker A: Foreign.

Speaker B: Hello, and welcome to the B2B Insights podcast. I'm Conor Wilcock. I'm, um, managing director of B2B International. And I'm joined today by Simi Dhawan, who's senior research director for a really important discussion on the challenges that marketers face when targeting B2B buyers and some of the things that they can think about in order to overcome those challenges. What we think that that's particularly important for B2B companies who need to engage a really varied customer base with often complex needs, while at the same time balancing those, uh, ever tightening marketing budgets. Um, so in this episode we're going to explore that challenge, uh, alongside delving into segmentation as a key topic, um, which we feel is an important opportunity for effectively targeting those B2B customers. So, Sumi, it's, uh, great to have you on.

Speaker A: Thanks, Connor, and good to see I'm not the only one donning a big headset. So good to see that you're joining me in air traffic control, amongst other things.

Speaker B: We are, we are trendsetters, if nothing else. Sumi, um, so I guess before we start talking about segmentation and the practicalities of doing that, I think if we just go back to first principles, really, and talk about the main challenges that marketers need to keep in mind. Based on your experience, what do you think those main challenges are?

Speaker A: Yeah, I think you touched upon it earlier in talking about the fact that we've seen marketing budgets becoming tighter. Uh, we've certainly seen that since the pandemic, but that seems to be a trend that we expect to continue moving forward. So there is that kind of onus on us to work with clients and drive efficiencies as best we can. And I suppose adding to that challenge is also the fact that as we'll talk about expecting more detail today is just the fact that customer needs are growing more complex. We're seeing those buying units again becoming more complex, more decision makers involved. And then add to that, add to the mix that you've got more brands being considered in a more competitive landscape as well. Then you can see clearly why it's really important that B2B brands really work hard to stand out from the crowd.

Speaker B: I totally agree. I think that's been my experience too. Um, and you're right that the data from our Superpowers study this year certainly backs that up. We've been talking about this sea of sameness, that B2B brands are really struggling to cut through the noise at the moment and that buyers are telling us that they're not seeing as much differentiation between brands as they used to. That's obviously having an impact on buying behavior as well. So what are you seeing through the Superpowers data to back that point up?

Speaker A: Yeah, I mean, with the Superpowers, um, side of things, we've been running that tracker since 2021. So the beauty of that is we've got quite a large data set now to look at that kind of year on year trend. And um, one of the kind of standout trends that we've noticed is this growing buying unit, um, as part of the purchasing process. So every year that seems to be growing on average. Now from the data we see that there's an average of seven people involved at different levels. So that's seven individuals that we're needing to engage, build trust with, understand their needs and expectations. And it could be more than that. That's just the average. I was speaking to a client yesterday talking about the fact that for them it's around nine people involved. So there's obviously lots to think about there. That poses a challenge to B2B marketers. And also again, the fact that they are considering more brands in the mix as well now than ever before is a big one. So, you know, is more competitive, there's more, more people to serve and, um, understand. And so I think all of that adds to that, that challenge and that complexity, which of course is backed by our Superpowers findings.

Speaker B: I, I, I agree, suny. And I think, um, another data point that really stood out to me was the fact that this year the incumbency advantage is being eroded more than ever. So I think it was about a third of buying experiences where the incumbent did not win the business. Um, so it seems to be a challenge that's becoming more and more acute, more and more salient. Um, and we hear it outside of the research that we do. We hear it from clients, we hear it from other people in the marketing industry that marketers in the B2B world are having to work harder and harder and harder than ever in order to win against the competition. By the way, just as we're talking about superpowers, just to call back to a previous episode in the summer, if anyone wants to go back and listen to learn more information about the study, the superpowers, uh, research, then they can certainly do that. Um, but yeah, as we say, this trend of marketers having to work, um, so much harder, um, I don't know if you have any other thoughts on that challenge.

Speaker A: Yeah, I mean, actually that um, fact about Incumbents was staggering to think it's the third. And, you know, we know in. In B2B, there's a huge level of inertia, at least in. In certain industries, to kind of shy away from what's been tried and tested and try something new. So that was interesting. And dare I say it again, this is. This is backed within the data. But, you know, there is a sense that B2B marketers potentially feel they're doing a better job of marketing, uh, a distinct brand position, communicating a clear USP then possibly in practice, because, of course, as part of the superpowers, there's a subset of B2B buyers that we also speak to. And so on the flip side, they were saying the complete opposite, that actually they're hearing from lots of different B2B brands, but they all sound and act the same. So there's definitely, you, uh, know, it's definitely feeling like a more level playing field. I suppose then the big question is, what is it they need to do to really stand out from the crowd and communicate more effectively to their target audience?

Speaker B: I mean, that is the. That's the $64,000 question, isn't it? And I guess we've. We've spent the first few minutes of this episode talking about this, like, hellscape of B2B for marketers. It's just completely difficult. There's no differentiation. Um, so maybe we should pivot now to talking about what the opportunity is, I guess, to stand in the crowd. Um, and what we're seeing is really this. This power of personalizing experiences, um, to the needs of. Of those individual buyers. And we can't forget, as you mentioned earlier, that the buying group is getting bigger and bigger. So when we talk about personalizing experiences, we're not talking about the experience of the company that you're trying to sell to. We're talking quite diverse experiences of each of the individual members of that. Of that buying committee. So, on one hand, I suppose it makes sense for marketers to place focus on the aggregate needs of the organization, but we are finding that the needs of the individual really, really important, especially, as you say, given that that buying group is getting bigger and bigger. And again, we're not just talking about. I think one of the pitfalls that B2B brands often fall into is to think about the most senior person that they need to speak to. So, okay, well, we just need to know what CFOs think, or we just need to know what the CEO or the managing director thinks. And while that's very Important, of course, those people are often signing the contracts. They're very influential. We also need to be able to think about the entire tree of decision makers from very senior board level all the way through to middle management. And some of those junior roles are often incredibly influential because they're often the ones that are uh, given the task of starting the journey providing that short list of brands. And so if you're not cutting through to those, those first stage junior decision makers and influencers, then you might not even be in the door to speak to the more senior stakeholders at the end. Um, so I think the key for marketers is to make sure that they demonstrate that they understand not just the high level, the strategic, but the day to day working world and those challenges of those individual buyers. They really need to show that they're willing to tailor their offering in order to fit those needs.

Speaker A: Yeah, absolutely. And I think what we've seen is that, and um, isn't to say there's uh, a big mass of B2B brands doing this already, but certainly those brands that are able to kind of deliver that more personalized marketing approach or that more personalized experience to different subsets of buying groups and their customers really do reap the benefits. I was actually reading something interesting on LinkedIn the other day that talked about the fact that if we cast our minds back even to a few years that people were happier to part with more personal information in return for more personalised marketers content. So very happy to part with personal information previously. But obviously as we've seen as of late and with legislation, there's a growing concern about data privacy. Um, and that's a real concern. And I think that more so than before, B2B buyers probably are less inclined to want to part with that information and be bombarded with information, um, at least ahead of doing day to day business with a particular B2B brand. Um, so I suppose that adds another challenge into the mix. I mean what would you say to marketers facing that sort of challenge?

Speaker B: Yeah, it's an interesting thought and I agree. I thought that um, article was very interesting. We'll perhaps leave a link to it in the episode notes. I mean, I think, I think brands, I think it is possible for brands to have a human face and to offer those more tailored experiences without necessarily expecting customers to part ways with their personal information upfront. I mean one effective way to do that I think is through customer segmentation. Um, and we know that with that approach marketers can show that they better understand they can develop a Better understanding um, of the diverse range of needs that their customers have. And to use that insight to replace what might have previously been a uh, one uh, size fits all uh, marketing strategy into one that's much more, much more tailored, but also agile, um, able to evolve more easily and more quickly as well. And that's really one of the key advantages of a well run segmentation is that it enables B2B marketers to group customers into similar or like segments because for example they have similar needs, they have similar behaviors, mindset attitudes or as we often recommend to our clients, a combination of all of those things that, that's really where you see the most sophisticated B2B segmentations. By the way, we're saying this as if it's really easy. We know that it's not to implement and we'll perhaps come on to that later on. But what it means in theory at least is that you can create much more targeted value propositions and messaging for each segment that you want to serve while also identifying the segments that are perhaps less important or should be lower down the priority list for you. Because all this of course comes down to um, resourcing and creating efficiencies. In an ideal world if you had 10,000 customers you would have 10,000 segments. Right? But it's not possible for. Well I certainly have never met a B2B business that can do marketing in that way. So we need to try and play the odds as best we can and find that right balance between um, tailoring our messaging and having having more um, individualized value propositions while taking care not to overstretch our marketing resource and our marketing budget. So all of this really helps to drive those efficiencies, um, which we think can only, can only be a good thing.

Speaker A: Yeah, absolutely. I think we, obviously we're in, in the business of business to business. But what we've been talking about here is the fact that you know, there are so many more people to serve behind the scenes. And obviously as individuals we are um, influenced and our expectations are set but by what happens in our, in both our personal and our, our working lives. So it makes sense to kind of look at that personalization at play in a range of brands. And if we look at some everyday brands, Netflix is a brilliant example of a brand in personal life that uh, is really driving that personalization at the moment. They look at user uh, data, they gather user data on what people have watched and rated, um, and they use that to customize their recommendations on personalized content for those individuals. So That's a really, really good example there. And I suppose when thinking about B2B uh, again there's likely fewer examples out there. But that's not to say that there aren't brands leading the four on this. And there were a few that were kind of came through as doing this particularly well and successfully again through our superpowers. And one of those brands was HP and you need to do an Internet search and you can see that they've actually been running a number of successful account based marketing campaigns and um, they work with partners such as LinkedIn and others to do this. And what's great is their sort of marrying up both their sales and marketing teams, um, empowering them with insights, really getting closer to their customers, understanding their needs and expectations, um, but also engaging with them more on a functional as well as an emotional level. So some really, really good stuff happening there. Uh, I suppose so the big topic of today's is looking at segmentation and how to drive some of that personalisation. And it probably makes sense, especially for listeners considering a uh, strategy, an approach like this to think about both sides like in terms of what are the benefits also what are some of the things to consider or the pitfalls. So um, probably makes sense to look at both of those in detail. So I suppose given you mentioned earlier, uh, segmentation obviously how that can deliver value in practice. What would you say are ah, some of the key benefits of running a successful segmentation strategy?

Speaker B: Yeah, I think you're right. I mean if I go back to my previous point about the, I guess if we think of it as a spectrum, right? So one end of the spectrum is to treat all customers exactly the same. So you've got one segment covering your entire organization and then the other end of that spectrum is you have a segment for every single customer. Right. And our aim will be to try and find that point in the middle which enables us to extract much more value from our customer base and from the market in general to gain a competitive advantage without overexerting ourselves or doing some, or just setting ourselves up for failure. So if you take, if you take the first, the first point, the risk there is that you result uh, that you end up producing um, far too generalist a proposition um, for the market that simply isn't going to cut through. So your marketing communications is not going to be strong enough, sophisticated enough, relevant enough to the market. Your sales strategy as you say, we're not just talking about marketing here, we're talking about the link up between marketing and sales that can suffer, uh, because we were not demonstrating a tailored enough approach that we know B2B businesses and the buyers really value. Um, going all the way to the other end of the spectrum there. In a perfect world we could argue, well, every customer is slightly different, they look slightly different, they behave slightly differently. So we should be treating each customer as its own segment. As we've just discussed, that's impractical, it's inefficient to deliver in practice. Sounds great on a piece of paper, but it's impossible to put into practice. So we need that middle ground. And segmentation is exactly, we would argue that compromise, um, it's a tailored approach to marketing rather than a one size fits all. It enables us to live to deliver more personalized experiences and those ultimately can drive commercial benefits. And I think perhaps we talk about those commercial benefits in a second but just before we get there. I think it's worth noting here that if there is anybody listening to this who works for an organization that has never done segmentation before and you feel as though you're way behind the curve, trust us, you're not. Because what we find is that um, actually relatively few B2B companies do segmentation or at least relatively few do it really well. We found from our uh, proprietary research that something like 5% of B2B buying experiences bear the hallmarks of effective segmentation being used to deliver scalable ABM or ABX strategies. So it's actually quite rare in the B2B space for this to be done properly. Um, and again, I don't, I don't wish to say that um, as if it's um, as if B2B brands are going to be setting themselves up for failure. It's more to say what a great opportunity this is because if you can do it and you can do it well and you can get the right resources behind it, then you really are going to be carving out somewhat of a competitive advantage for your brand. So again, I guess coming back then to the commercial benefits of doing this and doing it well, I guess we've observed that those B2B businesses in those rare cases where they, where they are successful, um, they enjoy winning in high value contracts so they're increasing customer lifetime value. They're also winning deals a lot more quickly, which we know is a problem for B2B at the moment is that um, the decision making process is contracted and m getting much longer. Um, so they're shortening the sales cycles. They're also creating higher levels of advocacy and loyalty from their Customers as well. So your NPS is going to go up. Um, but as we've just said, only 5% of experiences are bearing those hallmarks. So there's a massive opportunity to um, step ahead of the competition. I'm going to come back to you though, Samir, you mentioned risk versus reward earlier. So um, while there are clear benefits to segmentation, what would you say are some of the key pitfalls or risks to be aware of?

Speaker A: Yeah, I, um, think first and foremost, um, I would say it's good to start with the end in mind and whatever you're doing, segmentation is no exception. Um, I think if for example your end goal is to better understand your existing customer base or to understand um, you know, how to build loyalty, as you said, it's one of the benefits, or grow sales or understand which customer segments you are best placed to serve or which might be more difficult to serve and drain resource, then it's going to make sense to look at a customer segmentation. And basically all that means is you're going to um, you can rely on your existing customer data, existing CRM, gather insight from existing customers and that's going to be able to um, answer those sorts of objectives. If you're wanting to take that a little bit further, and for example your main end goal is to grow market share or build brand awareness in different markets, for example, better understand prospective customers, then it's going to be more important to design something that's a market segmentation, um, which may involve speaking to some customers, but you're going to be including some prospects in there. So I think the design of the project can vary. So it's very important to understand what it is you're wanting to get out of the research and obviously that has implications for the investment as well. That's, that's required. I think beyond thinking about the design, there's probably some common pitfalls across any segmentation study. So it might sound obvious, but just making sure, and you touched upon it earlier in terms of that middle ground, but just getting the right number of segments, I think, you know, of course we can't treat every customer as much as that would be brilliant as a segment of one. But in the same vein, we don't want to have too many segments. It's just going to create a really difficult task to try and well firstly get our head around all of those segments and serve those segments and actually some of them might be really, really niche. So you know, we don't want too many segments equally. On the flip side, we don't want too few because that sort of defeats the object of this personalization that we're wanting to achieve. And we could have very broad categories that aren't really allowing us to create meaningful value propositions or messages. So there is a sweet spot. And when we start a study, we don't know what the segmentation is going to look like. Um, but again we work with our stats team, we plug in the data and we have a look at what those optimum segments look like. And typically that sweet spot, it varies, but it's typically within three to six segments. So again, something really, really important to be mindful of in the output, I'd say beyond that, the only other thing is again, talking to the end in mind and what we want to achieve from the segmentation study is thinking about how it's going to be used. So, um, if we're looking at exclusively understanding how we can tailor value propositions or tailor marketing, then it's going to, it might make more sense to do a needs based segmentation. That's where the segments are driven by unique customer needs. Each segment has a very different driving, um, need. You know, one might be more driven by innovation, one set of customers might be more price focused and so on. Um, and you know, again, if, if you want to take that in a different direction and you're not wanting to just understand needs, but you perhaps, I don't know, if you're a B2B organization that has say 2,000 customers and as part of the research we speak to say 10% of those, then you might want to say, well, how do we segment the rest of the customer base? How do we extrapolate the findings? And again, that's where you might want to build in some more tangible thermographic information into that segmentation so you can better classify customers after the research, such as sector, uh, size and so on. So there's various things to consider. As you can imagine, a lot of it comes to thinking about the design of the study and ultimately what you want to get out of it and how you want to use the findings.

Speaker B: I'm really glad you've said that Simi, because I think that um, one of the reasons why B2B organizations can feel overwhelmed by the thought of doing a segmentation is that it often sits like, sits in the textbook. Um, and so we're talking about the theory there, but I think what you've just talked about there is some of the practical tips to making sure segmentation is a success when you actually go and do it. Um, and that can be a bit of a leap for B2B brands is to say, okay, we've read about it, we think we know this is what we want to do, but how do we actually just open the door and walk through it? And you're right, but project design is really key to that, and it has to be led. Those conversations around project design have to be led by what the ultimately required outputs are. Uh, because there isn't just one way of doing segmentation. Um, there's lots of factors to consider. Um, we need to think, for example, about whether we're after some sort of robust quantitative measurement to allocate segments, or whether we want a more. A richer, deeper, uh, or qualitative understanding of the segments, or a mixture of both, as often is the case in B2B.

Speaker A: Yeah, absolutely. I think, um, we've seen that, we've talked actually about the stats side of things and quantitative segmentation. But there also seems to be, um, more qualitative, uh, research that's coming into the fold. In terms of mixed method approaches. There seems to be more of an interest in creating Personas, which makes sense. Just bringing those segments to life in a more engaging way. I mean, I suppose that's one of the trends we're starting to see. What, what sort of trends would you say marketers should look out for or have you seen in terms of segmentation?

Speaker B: Yeah, well, I mean, I think. I think segmentation is changing and evolving in terms of how businesses, B2B businesses are using it. I think that's. That's often a bit of a misnomer in B2B and maybe in B2B research, right, that we cross these thresholds and think, okay, now, now we can do customer journey mapping in B2B, or now we can do scalable custom research in B2B. And then it just sort of sits there and never changes. Whereas in reality, segmentation and CX and customer journey mapping, they're always evolving. The way that we do segmentation now with our clients is quite different than how we did it five years ago or certainly ten years ago. Um, I think, for example, traditionally we would have placed more emphasis on segmentation to group different customers. But, um, as you mentioned, there's now this added layer in terms of Persona development which takes things further by really bringing that segmentation to life so that marketers can target those sort of fictionalized buyers based on those similar characteristics and behaviors. I mean, Persona development really helps B2B teams to identify more clearly those segments so that they're Sort of less abstract and more relatable. And that's not only helpful for externalizing the use of segmentation, that is using it with customers, but it's also really useful internally to get buy in and to motivate people within the business, um, whether they be other salespeople or marketing people, whoever it might be. To properly understand what we're going after here is much easier for human beings to understand something that looks like a human being rather than something like that looks like it's been churned out from, from an Excel spreadsheet. So, so that's one trend and I think another one that really springs to mind is that the, there seems to be a growing amount of interest in our clients wanting to integrate their internal data with um, research data from a segmentation project. Um, and I think that's really useful um, because it speaks first of all to a real desire to take action, um, and to put the segmentation to work. Um, having that data and that mixture of internal and external fresh primary research data to really empower and personalize that marketing that we've discussed earlier. I think that's a key way in which businesses can stand out from the crowd. Now the challenge, or part of the challenge on that is how to handle all of that data and that's something that we can help with but we're seeing more and more of it from the clients with whom we do segmentation research. Is this desire to pull in um, that CRM data so that they can um, attach it to their existing customer base um, a lot more easily.

Speaker A: Yeah, absolutely. I think um, you hit on something really point there which is that for a segmentation to be successful it has to be actionable and if it's not, well it's soul destroying for us and less value for our clients because you know, you can create the segmentation but then it's an interesting insight rather than something that they can actually use. And action. And I think to your point there about marrying um, up data from the survey versus client data which we're seeing more and more AdSense, so much value. I think that's where um, so far our ah, in house stats team really kind of, you know, do some brilliant work there, ah, to uh, help our clients kind of bridge the gap between those two bits of data. I mean we've created custom tools that help our clients do exactly what we've been talking about earlier in terms of being able to allocate segments after the research. Um, so being able to for example have a bunch of what we Call killer questions that they can ask to other customers outside of the survey or even prospective customers which will allocate them to a particular segment. So tools like that again are really useful in empowering our clients to take action. I think on your point about Persona development and um, really bringing those to life, I think this is where it's great to work with our clients using our in house design team. Our whole creative offering within Dentsu as well talks to that. But we've, we've done lots of stuff and it's, it's really interesting. It really does help to uh, land the segmentation and cascade the findings a lot more easily. Internally we've done all sorts of fun things. We've had actors come in and play out a day in the life of a particular segment. We've had digital uh, platforms they can log into. You know ultimately we want, we want internal, internal stakeholders within our clients businesses to say right, I recognize X, Y and Z of my clients within this segment. They've got to really immerse themselves in understanding those in order to action them ultimately.

Speaker B: Thanks Samiya. I completely agree and I must say that some of the outputs that we've seen on segmentation projects recently are definitely among the most more creative. I think it's important to, to. To step outside the box and just think about well how what would be the best way for my organization to true. To truly get to know these segments and to start thinking of them. It just in their day to day. You almost want it to be to become water cooler conversation about what would this segment think or what would this Persona think. Um because once you do that then it really, it is embedded and it becomes more habitual and then you'll see that coming across in not just your marketing but in the way that you deliver customer experience on a day to day basis. So definitely watch this space on upcoming projects because we're always thinking about new and creative ways to um, bring those segmentations to life. Um, well thank you again Simi. This has been a really interesting discussion and thanks for those listening. If you've enjoyed today's episode then please make sure to subscribe so that you don't miss future episodes. Um, and to explore some more of our content on how segmentation research is used to inform successful business outcomes or to subscribe to our B2B Insights newsletter, please visit B2B International's Insights Hub at uh b2b international.com insights thank you again Simi, it's been great and thanks everyone for listening.