Here’s a fact – a marketing campaign addressed to no one will likely perform far worse than a hyper-personalized one. The same goes for sales campaigns.
The reason is simple. According to the B2B Buyer Behavior Study, 76% of buyers now expect personalized attention from businesses. Fail to provide that, and you lose a chance of bagging a prospective customer.
Providing a personalized experience begins with understanding your target demographic. And this blog aims to help you with it.
But let’s go back to the basics first.
What is a Target Demographic in B2B?
Your company’s target demographic comprises all the people who want to buy your products and services and will benefit from them. For marketing and sales teams, this boils down to a set of common observable and measurable characteristics of the intended audience. This includes their age, gender, location, annual income, job profile, marital status, and more.
This definition overlaps with that of a target market. But here’s the key difference – while the target market defines the broader audience who will use your products or services, the target demographic is a specific subset of people with well-defined characteristics.
For example, a CRM software company’s target market could be large-sized marketing companies that need CRM software. Whereas, their target audience would be C-Suite Executives, SDRs and marketing professionals in Europe who spend time on LinkedIn.
If identified properly, the customer demographic can shed light on your prospect’s needs and goals, their preferred channels, and the messaging they will most respond to. All of this can help you reach out to them with greater success and make your campaign successful. And that’s the hard part – identifying your target audience.
Challenges in Identifying the Target Market Demographic
Unlike in B2C, wherein the purchase decision is made by a single buyer, in B2B, the purchase decision is made by several stakeholders, from IT professionals to VPs. This makes identifying common characteristics a lot more difficult.
Moreover, since a small number of customers make more long-term, high-value purchases, even a small misstep can dramatically impact your ROIs.
Here are some numbers to help you put this into perspective. In B2B, 20% of your target group makes 80% of your buyers. Say your target group has a total of 100 prospects, each buying a product worth $500. If you identify your target audience correctly and personalize their campaigns, in theory, you can make a maximum of $50,000 in sales. But if you identify only 80% of your target audience, the sales drop to just about $40,000.
It’s now clear that identifying your target audience is crucial to business success. So, how do you go about it?
A Four-Step Formula to Identify Your Target Demographic
1. Clarify Your Value Proposition
Unlike B2C, wherein buyers purchase a product they want, B2B buyers only purchase a product they need. So, in theory, you can reverse-engineer who will use your product based on the features to understand the target audience. For this, you need to understand the value proposition of your product.
Your value proposition, in the simplest terms, includes the benefits of using the product. Ours, at BambooBox, for instance, is to make our customers’ marketing pipeline predictable through software. So naturally, our target audience is anyone looking to use software to generate a predictable supply of leads.
Don’t have a value proposition to guide your target audience research? Then, revisit the intent behind starting your business. Start by answering the following questions.
- Why did you start your business?
- What were the market gaps you identified before beginning your business?
- Who needs these solutions? What does their profile look like?
The answers will guide you towards your value proposition. And this will lead you to your intended audience.
2. Identify Your Current Customers
If you have customers on your roster, take a good look at them. Gather their information from your CRM tools, email lists, and more. Then, if it’s possible, supplement this information with customer intent data from third-party providers. This will help you get a 360-degree overview of many of your customers.
Now, identify the commonalities between your customers. This is the simplest way to determine your target demographic.
3. Do a Competitive Analysis
Your current customers can only tell you your target audience based on your past sales. And that could restrict you from reaching out to prospective customers simply because you weren’t aware of them. This is why you must conduct a competitive analysis of your target market from time to time.
Identify your competitors based on their value proposition. Now, look at their target market. B2B markets often overlap when brands cater to the same niche. Once you identify common target markets, look for outliers. This could be customers with higher disposable income, for instance.
Such information can help you get a more comprehensive view of your total target demographic.
4. Review Industry Trends
Competitive analysis can show you gaps in your overview of the target audience. But noting industry fluctuations can help you understand product popularity fluctuations. For instance, buyers with a limited budget could buy your products during a Black Friday sale. Such customers could be a part of your target audience during specific seasons.
Create a Target Market Business Plan
All the above methods can help you gain a comprehensive overview of your target demographic. The next step is to use this information to get business. And that starts with market segmentation.
For this, take a look at your business goals and decide the segmentation parameters. For instance, if yours is a SaaS CRM company, you might want to section your audience by job profile, company size, country, active communication channels, and so on. Such segmentation will help you determine the optimal approach to reach out to your prospects.
For instance, if they are a senior SDR active over emails, you can reach out to them via an email drip campaign. And you could even develop a business plan and a budget to accommodate for it.
All of this will help you get better ROIs.