I wrote recently about the importance of implementing B2B sales lead nurturing for industrial manufacturing and technology companies. Hopefully, it presented a reason to believe it’s important for you and it provided some guidance on how to get started.
Today, I want to go into a very important step associated with developing an EFFECTIVE sales lead nurturing program – sales lead segmentation.
Segmentation is the practice of dividing your sales leads into groups with similar implied or explicit attributes. Honing in on sales leads that share specific attributes enable you to craft more relevant, valuable and timely messages and offers. The goal of segmentation is to improve the likelihood that your message and offer will generate greater attention and drive more engagement than if you treated every sale lead in the same way.
Segmentation is powerful. According to an Econsultancy study, “96% of B2B marketers say segmentation is the most valuable method for improving conversion rates.” And a study by Annuitas Group found that “businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads and nurtured leads make 47% larger purchases than non-nurtured leads.”
Segmenting to maximize your sales lead nurturing program is a sure winner for generating better results. Now that I have your attention, let’s dive into the best way to kickoff a segmentation practice.
Defining Your Segmentation Attributes
In general, there are two categories of segmentation attributes you can use to separate your sales leads into groups.
- Implied: attributes we assume from signals sales leads project from their behaviors, actions or even demographic commonalities like working moms with young children.
- Explicit – attributes sales leads specifically communicated and shared with you through completed forms, actual behavior like a past product or service purchases or during in-person discussions.
If you have the data, you technically could segment your sales leads in many, many different ways. But first – you need the data. And the data needs to be stored and structured in an organized way for review and selection. A marketing automation and CRM (e.g. customer relationship management) platforms will make the practice of segmenting your sales leads far easier and faster. If you have the data outside a platform, you’ll be using Excel.
You may also be limited based on the data you have and are collecting about your sales leads. When planning your customer acquisition program, you need to have the foresight to also consider how you’ll wish to segment the sales leads being captured in order to inform your future nurturing program development.
Realize there is a trade-off with gathering too much data versus too little. If you ask for a lot of data on an initial lead generation form, you could struggle to generate lead form conversions. The more fields you require from an individual, the less likely they are to complete it, even with a high-value offer. On the reverse, if you gather too little data, you may not have enough to segment effectively. Never fear though – if you want more data, you can always work with a third party data appending service to expand your sales lead profiles – of course at an additional cost.
Data quality also plays a critical role in a segment’s reliability. Asking individuals, especially earlier in their buying process, about budget size, authority level, or project timeline and then attempting to create a segment around this data, could impact the effectiveness of your nurturing program. Individuals may arbitrarily respond to these types of questions; therefore, your messaging and offers could be way outside the sale leads true motivations.
Examples of Common Segmentation Attributes
Some segmentation attributes worth considering for your sales lead nurturing program include:
- Company size – small business (1-300), mid-market (301-1,500), and enterprise (1,501+)
- Role – decision-maker, influencer, budget-holder, etc.
- Title/Function – business, operations, marketing, engineering, etc.
- Authority level – this does require some deeper research about organizational buying dynamics
- Stage in buying journey – gathered from your marketing automation platform and sales process mapping
- Topic of interest – type of content they are downloading and engaging with
- Industry verticals – healthcare, retail, technology, etc.
Think thoroughly through why you would select an attribute. If you can’t specifically identify how you would craft a message that delivers higher relevance, value or timeliness to this segment, consider not doing it.
Five Qualifiers for Selecting Useful Segments
Rather than make the process of segmentation overly scientific, there are five qualifiers to use when determining your segmentation attributes.
- Measurable: Your segment should reasonably project an opportunity for a measurable increase in outcomes based on the extra effort crafting unique messages and offers.
- Relevant: Structure segments so the message and offer resonants with and effectively aids a lead to more quickly and easily achieve their buying goals. A goal of segmentation is to help accelerate sales cycles. Higher relevance to the sales leads’ needs, the faster the sales process could flow for your company.
- Actionable: your team must be able to create a series of distinct touchpoints that will effectively attract and serve the segment. If you create a segment but it’s not actionable, its not a segment worth pursuing.
- Distinguishable: there must be data available to define a distinct segment and the data should differentiate one segment clearly from another/.
- Stable: identify segments that behave fairly consistent. Targeting a new title or function that represents a very small part of your database or is fad-driven may cause wasted time if it quickly becomes irrelevant.
How to Handle Sales Leads that Fit Multiple Segments?
After segments are developed, prioritize each one. If a sales lead falls into multiple segments, the segment with the highest priority becomes that sales lead’s segment.
Priorities can be set on multiple factors including the one you feel most confident about persuading the sales lead, the one offering the most differentiation, or the one that has proven to accelerate the sales cycle the fastest. Whatever segment will be most relevant to the sales lead and help support their buying journey the best, is the right choice.
If a sales lead doesn’t fit any segments, have a default one with general messaging and offers. This could even be a weekly newsletter that carries offers related to one of your segments. Over time, the general sale leads could convert on a newsletter offer that places them into a specific segment.
According to Marketo, they “found that 23% of email engagement is dependent on the level of segmentation you use.” It rolls back to relevance. Greater focus on conducting 1:1 conversations with a sales lead, and answering their specific questions, the faster and better you’ll help them get a purchase.
Ready to Get Started with Segmentation?
If you serve two different industries, start there with segmentation. If you target two different job titles during the course of your sales process, start there. One step down from serving every sale lead in a general way will enable your message and offer to become even more relevant. As you monitor engagement, test new messages and offers to see if you can improve its performance.
Market2Lead found that nurtured leads have a 23% shorter sales cycle. Get started and aim to speed-up your sales cycle by 23%!
Kevin Gold is a B2B acquisition marketing and growth consultant with more than 18 years of executive marketing and business leadership experience. Next Leap Strategy develops and executes customer acquisition programs for industrial manufacturing and technology providers to achieve more consistent and faster leads and sales growth. Contact Kevin for help finding your next customers.