• Dave Ruston

Customer segmentation for B2B brands

B2B customer research

In a business climate unique to all of us, it has never been more important to thoroughly understand your customer base. Market research can clearly be pivotal to this – perhaps on the one hand, better utilising information already held such as desk research to delve into pre-published materials or data mining customer transaction data. Or alternatively using primary research to undertake a dedicated study into the experiences and behaviours of your target market.

Although many consumer-facing brands are a well versed in using this wide range of possibilities within their businesses, we do find that some B2B brands are still a little 'behind the curve' or perhaps struggle to make the internal business case for investment.

Trade customer buying behaviour

Some of our recent work in the trade and building sector highlights the clear differences in shopper behaviour amongst subtly different business types. Here is one example we recently worked on. While a one-size-fits-all label of ‘Plumber’ may conveniently work on one level, delving into the varied work portfolio's reveals some interesting differences by work focus.

Amongst those specialising in bathroom installs and general plumbing, it is quite clear from our research below how widely this audience shop, and how the take-up of newer routes to purchase are being included in their approach.

This category now uses a variety of channels to meet their information and purchasing need and rely heavily on Screwfix / Toolstation, as well as also making strong use of the ‘DIY shed’. Conversely, those specialising in heating are far more loyal to the national merchant offering.

We also know from our work during the first lockdown earlier this year that many installers were left disappointed by some merchant’s reactiveness, or otherwise, to the pandemic and perceived failure to adapt quickly to fast moving public health guidance. There were also reported issues in the supply chain which also left many tradespeople in a predicament.

Where do you buy the majority of your Plumbing & Heating products (including online and in-store)?

What is customer segmentation?

But this is just one way of understanding the trade audience. And it is certainly not always this clear cut. There are many more factors in play to help explain decision making and behaviours. To this end, more businesses are going further and using data to segment their customers in a more ‘scientific way’.

Segmentation is the advanced statistical technique used by market researchers and data scientists to create a best-fit model based on a host of survey or transactional data you may hold:

· Customer characteristics (their location, business size, length of account with you)

· Customer behaviour (number of transactions with you, value of purchase, type of purchase, billing agreements)

· Customer attitudes (stuff that is harder to quantify such as their level of satisfaction, complaints, loyalty, their perception of your brand)

After reducing the number of variables at our disposal, our clever software here at Eureka! HQ then works our which combination of the data above is the optimum way of describing your target market (or potential market). Richard and Dave then weave in a big more magic, based on our 40 years of collective experience of talking with trade customers, to arrive at the optimum number of customer segments and descriptions of each one.

By developing informed personas or segments, forward thinking brands and organisations are tailoring their strategies, marketing and creative campaigns to speak directly to specific customer types in different ways. In a business climate where hanging onto every one of your customers is paramount, a segment-centric basis for customer engagement makes a lot of sense.

Drop us a line if you fancy a chat about how Eureka! could add value to your brand with a customer segmentation.

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