What Is Data Segmentation and Why Is It a Thing?

In today’s business world, data makes the world go ‘round—and data segmentation is one of the key capabilities your business needs to use it effectively.

Data segmentation transforms data from plain information to meaningful insights that you can use to grab buyer attention, engage them more effectively, and ultimately generate more leads and sales for your business.

In this guide, we’ll cover the ins and outs of data segmentation so you can start applying it to your marketing strategies right away. We’ll dive deeper into its definition and use cases, explore why it’s so important to business success, and walk through steps for implementation.

Quick Takeaways:

  • Data segmentation enables marketing personalization, which 76% of buyers want and 90% of marketers say makes their business more profitable.
  • Implementing a data segmentation strategy starts with identifying and mapping your relevant data sources.
  • Adopting an automated data management software tool is critical for managing data efficiently, accessing analytics capabilities, and eliminating human error.
  • The success of your data segmentation strategy hinges on the alignment between your segmentation variables, your audiences, and your industry/offerings.
  • Continual testing, refining, and optimizing builds trust with your audiences as worthy stewards of their information.

What is Data Segmentation and Why Does It Matter?

Data segmentation divides large datasets into smaller, more manageable subsets based on specific attributes or characteristics. For B2B companies, segmentation is crucial at every stage of the customer journey, from initial lead-gen to sales conversion to customer retention.

Effective data segmentation can give you deeper insight into your customers and enable you to tailor your marketing strategies to their unique needs and preferences.

Today, this capability is invaluable. Personalized experiences aren’t just a nice-to-have for buyers and customers, they’re a standard expectation. McKinsey reports that 75% of B2B buyers now expect personalized interactions from brands and become frustrated when they don’t receive it.

Equally importantly, Google research reveals that 90% of leading marketers say personalization contributes to business profitability.

90% of leading marketers say personalization significantly contributes to business profitability.

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All in all, data segmentation creates a win-win scenario for all involved:

  • Marketers gain better insights to optimize their strategies
  • Customers are happier because they get personalized experiences
  • Businesses grow because personalization drives profit

If you aren’t already using data segmentation as part of your B2B marketing strategy, the time is now to start. Let’s walk through 5 ways to implement data segmentation right away.

Implementing Data Segmentation in B2B: 5 Essential Steps

Identify Relevant Data Sources

First, identify your relevant data sources. This requires understanding where your data comes from, and usually includes sources such as:

  • Direct inquiries
  • Website analytics
  • CRM tools
  • Social media platforms
  • Prospect lists
  • Trade show/event lists

Once you outline your company’s data sources, take steps to streamline the types of data you collect and the formats in which you maintain it. Creating a visual map of relevant data sources, types, and formats can help you get a handle on your data during this initial step.

Adopt a Centralized Data Management Tool

A centralized, automated data tool is extremely valuable for optimizing data management and making data available in real time to all team members who need it. Data management tools create a single source of data truth so your data (in its original and segmented forms) never has to be duplicated. Updates are made and maintained in one place.

Everyone operates using the same data, and activity can be tracked in one place so that your audiences receive intentionally planned, aligned, consistent messaging. Data tools can also be integrated with other important tools in your marketing tech stack, like your CRM or email platform, so data flows seamlessly to its central location.

Identify Segmentation Variables

What variables matter to your organization? Knowing the answer to this question is perhaps the most critical for making your data segmentation strategy a success.

For example: Location-based companies will care quite a bit about a buyer’s geographic location, while digitally-exclusive SaaS companies may barely use that data point in their marketing strategy. A B2C e-commerce company will want to track key demographic information, such as age and gender, while B2B businesses care more about things like job title and experience.

The effectiveness of data segmentation in driving marketing results hinges on strong alignment between the data points you use to segment, your target audience, and your industry/offerings.

Align Marketing Outreach with Relevant Segments

Next, align your specific outreach initiatives with the segments each is most relevant for. High message/segment alignment positions your brand as one that knows and cares about its customers by sharing content that can provide real value. Consider incorporating other content like blogs, videos, and similar resources to drive this point home.

Test, Refine, and Optimize

Last but not least, track strategy performance and use tactics such as A/B testing to continually refine and improve your data segmentation strategy as it relates to marketing. Keep your data clean and your lists updated, always honoring preference changes and keeping up with updates from contacts on your list.

Your data software tool can largely automate this process so that it’s efficient and error-free. By testing, refining, and optimizing frequently, you can build a reputation with your audiences over time as a trustworthy steward of their personal information.

Over to You

Data segmentation is a fundamental tool for B2B startups and agencies looking to harness the full potential of their data. By segmenting your customers strategically you can uplevel the ROI you receive from every marketing campaign and outreach effort.

If you’re looking to implement a smart data segmentation strategy but don’t have the right tools and expertise to do it alone, RevBoss can help. Our strategic marketing services leverage data segmentation throughout our processes and give clients access to cutting-edge tools to execute.

Contact us today to learn more about how we can help grow your B2B business.