Inside B2B Market Segmentation
Most business-to-business marketers know their jobs differ from their cohorts in the B2C realm. Yet, many may not understand specifically how these differences impact marketing strategies and tactics. One market research firm found that a closer look at these differences offered valuable insight into how marketers should approach B2B target audience segmentation. B2B International analyzed some 2,500 studies, and found about eight unique characteristics of B2B markets that are most likely to impact segmentation and targeting: 1.) a more complex decision-making unit; 2.) a more ‘rational’ approach to buying; 3.) more complex products; 4.) smaller target audiences; 5.) the importance of personal relationships; 6.) more longer-term buyers; 7.) less likely to drive innovation; and 8.) fewer behavioral and needs-based segments. ”A common approach in B2B markets is to apply a segmentation based on company size,” notes one author of the report. “However, such demographic segmentation does not offer a strategic advantage that competitors cannot copy.” His advice: strive for basing target audience segmentation on behavior or needs in the following four categories: 1.) a price-focused; 2.) a quality and brand-focused; 3.) a service-focused; and 4.) a partnership-focused. Not surprising, another finding of the study was that a comprehensive and up-to-date database rich in information on each customer and prospect was key to effective segmentation and ultimately, higher sales.
Brands Pack for “Customer Decision Journeys”
Digitally empowered consumers are once again reshaping the buying experience and boosting expectations. An emerging new reality is upping the game for brands that must evolve from “always on,” to “always relevant and responsive to buyers’ increasing desires for pinpoint delivery,” says a recent report from McKinsey & Company.
As search technologies continue to mature, social media sharing grows and mobile devices add a “wherever” dimension to the buying environment, on-demand marketing will become ever more routine to buyers. Noting that the technologies needed to enable this scenario are available now, McKinsey analysts say consumers will soon be able to search by image, voice and gesture, automatically sharing their experiences with others as they discover new ways to use devices to augment reality (as Google glasses).
Consequently, brands will turn to their own technologies, tools and techniques to aid them in gathering the right data across the “consumer decision journey.” They need to know the entire story of how individuals encounter products and services, and the steps they take to evaluate and buy. This will include watching them shop, going into their homes and finding the triggers and motivations that drive buying behavior. Yet, things could get tricky as Nordstrom found out recently after announcing plans to track customers in its stores via their smart phones.
Oil and Gas Industry Adjusts to Preferences of Young Recruits
As global demand and high prices continue to stoke the offshore oil and gas market, companies still worry about talent shortages and the looming “great crew change.” According to a new report from Hays Oil and Gas and Gas Job Search, oil and gas professionals saw an 8.5% bump up in salaries in 2012. The report entitled, “Oil and Gas Global Salary Guide 2013,” says the industry’s global average salary is now $87,300. However, many baby boomers in the industry are likely to retire in the next several years, and replacing that wealth of talent will not be easy. In fact, according to a study conducted by the Society of Petroleum Engineers, recruiting and training methods and delivery systems that once worked in the industry are being adjusted in order to compensate for generational preferences. The SPE study found that while older professionals preferred traditional academics, younger recruits prefer online training and mentoring programs. One expert noted that oil and gas companies of all sizes need to boost their investment in formal training and development programs. The University of Houston recently received the Texas Higher Education Coordinating Board’s approval to offer the first subsea engineering graduate program in the United States. The 10-course master’s program is set to begin this fall and was established in collaboration with FMC Technologies, Cameron, GE Oil & Gas and Weatherford. Designed for working engineers, it will be offered in the evening and taught by industry professionals as well as full-time college faculty members.
Hospital Pricing Data Reveals Wide Discrepancies
According to newly released data from the Health and Human Services Department’s Centers for Medicare and Medicaid Services (CMS), a vast disparity exists between what hospitals in the U.S. charge for pills, procedures and operations and the real costs of those services, as calculated and paid by Medicare. This is puzzling because, “Medicare uses actual expense data submitted by all hospitals to determine the actual costs of all treatments, including allocations of overhead such as rent or administrative salaries,” explains Steven Brill, author of TIME’s March 4, 2013, special report on health-care-pricing-practices, entitled, Bitter Pill.
The data file compares the average list prices of what hospitals in this country charge for the 100 most common inpatient procedures, which have been mostly kept private until now. A case of pneumonia, with no complications, cost $124,051 in Philadelphia and $5,093 in Water Valley, Miss., with an average charge of $24,549. In Washington, D.C., George Washington University Hospital’s average bill for a patient on a ventilator was $115,000, while Providence Hospital’s average charge for the same treatment was just under $53,000 despite being in the same city.
Hospitals contend pricing comes from a master list that can be confusing because it’s highly variable and generally not what a consumer would pay because discounts are negotiated with insurance companies. Yet, critics say these prices do matter because consumers often pay a portion or percentage of their bills, and uninsured patients face the full bill, even though some hospitals assist the uninsured in paying their bills. Medicare officials say they want to increase transparency in the health system and provide more clarity on charge data.
Business to Business
- U.S. mobile subscribers sent 2.19 trillion text messages in 2012. (CTIA – The Wireless Association; 202-736-3200)
- SMS messages achieve a high response rate across industries, and much of that engagement occurs in the first 15 minutes. An analysis of almost a billion SMS transactions through 1,500 networks across 42 mobile operating systems and a multitude of countries reveals that the finance and banking and travel and transport sectors garner quick responses, with 57% and 54% of their responses, respectively, coming in the first 15 minutes. (marketing charts.com)
- B2B companies that blog generate 70% more leads/month than those who do not. Increasing blogging to 6-8x/month nearly doubles leads according to @Hubspot. (pwb.com)
- Regarding which days of the week and times of the day perform best for email marketing, 44% say sending emails on Tuesday results in better open rates, 53% say Friday is the worst day for email open rates and 53% have had the most success sending emails between 8 am and 12 pm. (marketingprofs.com)
- A recent article on MarketingSherpa discussed their latest survey report on marketing analytics, which indicates that 42% of marketers surveyed believe the ability to act on data to be the most significant challenge they face. Combining data from multiple sources and simply finding budget to acquire new resources ranked second and third, respectively. (searchengineland.com)
- Almost four in 10 adults (38%) say they’d be likely to use a smartphone app offered by a fast-food restaurant. (National Restaurant Association; 202-331-5900)
- Almost half of consumers who follow retailers on social media (46%) feel that where they shop reflects their lifestyles. (Motista; 877-966-8478)
- 67% of customers prefer customer service assistance via the phone and 56% prefer email. Only 6% prefer to contact a company’s customer service department via social media.(Exact Target; 317-423-3928)
- Almost three in 10 U.S. adults post questions, pictures, or ideas on brands’ social networking sites. (Ipsos; OTX 212-524-8200)
- Brands respond to only 32% of consumer questions posted on Twitter. (Socialbakers; 847-415-9333)
- Two-thirds of U.S. consumers (66%) do not want to be contacted by marketers via phone. (ClickFox; 303-951-3494)
- One in 10 Americans (10%) carpool as their primary means of getting to work. (Bolt Insurance Agency; 860-777-2620)
- Seven in 10 Americans (71%) factor in environmental concerns when making purchasing decisions at least some of the time, but only 27% always or regularly do so. (Cone Communications; 617-939-8325)
- Fewer than half of Americans (49%) are willing to pay higher taxes or utility bills to help stave off global warming. (Rasmussen Reports; 732-776-9777)
- During the 20th century, 158 hurricanes of all categories hit the U.S. Most hurricanes hit Florida (57), with Texas coming in sceond with 26. Louisiana and North Carolina each had 25. Thirty-six of the 64 major hurricanes (Category 3-5) struck in September. (randomhistory.com)
- A single Air Force base in Nevada has saved $83,000 A MONTH since it switched from using traditional energy sources to solar energy produced on site. (renewableresourcesinc.com)
- Drinking green tea, coffee and red wine can help prevent skin damage. Women who drank four cups of green tea per day for 12 weeks lowered their risk of sunburn by 25%. Women who drank three cups of coffee a day lowered their risk of basal cell carcinoma by 20%. Proanthocyanidins, the antioxidants found in red grapes, may help prevent oxidative reactions in skin which can damage and kill cells leading to sunburns, wrinkles and skin cancer. (eatingwell.com)
- Sleep deprivation can lead to weight gain. A Columbia University study reported that those who regularly slept just four hours were 73% more likely to become obese than those sleeping between seven and nine hours. Even people sleeping six hours were 23% more likely to become obese. (experiencelife.com)
- More than eight in 10 “fitness enthusiasts” (those who work out three or more times per week) (82%) feel they aren’t practicing good nutrition habits after exercise. Most would like to improve the way they feel after working out, including 52% who would like to experience less muscle soreness and 42% who would like to have more energy. (EAS Sports Nutrition; 847-938-1505)
- Almost one in five new food and drink products (19%) launched in the U.S. in 2012 were high-protein items. (Mintel; 312-932-0400)
- Nearly one in 10 grocery shoppers (9%) almost always check calorie counts on foods before buying. (Journal of the American Diabetic Association; 312-899-0040)
- Of the 52% of U.S. adults who are currently “watching” their diets, 15% are doing so to monitor their sodium intake. (Mintel; 312-628-7936)