Marketers use customer segmentation to better understand their prospects and develop targeted campaigns with strategic messaging that drives conversions.
Marketers can segment potential customers by their location (geographic segmentation), population-based factors (demographic segmentation), engagement history (behavioral segmentation), or personality and lifestyle (psychographic segmentation) – but for business-to-business (B2B) SaaS marketers, the most critical type of customer segmentation is firmographics.
What are Firmographics?
Firmographics (a portmanteau of firm and demographics) is the B2B marketing strategy of describing and segmenting prospects (and customers) based on organizational attributes like age, size, location, and performance.
B2B SaaS marketers use firmographic segmentation to establish an Ideal Customer Profile (ICP), define their Total Addressable Market (TAM), augment buyer personas, and to inform the development of targeted marketing campaigns that drive conversions in each identified firmographic segment.
6 Firmographic Variables You Should Know
Firmographic variables represent the different attributes that B2B marketers can use to describe or categorize companies in their target audience. Below, we describe six of the most important firmographic variables used to segment customers in B2B SaaS.
Industry
B2B marketers can describe or segment prospects by the industry in which they operate. Traditional industries are codified under the Standard Industrial Classification (SIC), which includes categories for:
- Agriculture, Forestry, and Fishing,
- Mining,
- Construction,
- Manufacturing,
- Transportation, Communications, and Utilities,
- Wholesale Trade,
- Retail,
- Finance, Insurance, and Real Estate,
- Services,
- Public Administration, and
- Nonclassifiable Industries.
While our economy has shifted markedly from manufacturing to services over the past several decades, the SIC has been slow to update its industrial classification system to reflect the new environment.
When prospects can’t be meaningfully described or grouped by SIC codes, marketers can and should create new frameworks based on first-hand knowledge of their prospects and customers.