B-to-B: Targeting the Segments Within the Segment

The key to successfully selling to the business-to-business market segment, which includes some 26 million small businesses in the United States, is to look for ways to segment within that segment rather than to simply address small businesses as a whole.

There are some basic ways to slice into the B-to-B market, including considering the business' size, whether the business resides in a specific geographical region, the Standard Industrial Classification code, the number of employees, whether it is one of approximately 18 million sole proprietorships or if it is a cottage business. All these techniques can pare down the market to a smaller, more targeted universe. But what is missing from this more traditional view of B-to-B segmentation is what will motivate the business owner to buy.
 
To address this challenge, marketers must focus on the microbusiness segment that heavily dominates the overall B-to-B market. While the businesses themselves may be small, the overall size of the microbusiness market is not, as more than 99 percent of all businesses are considered to be small businesses or microbusinesses, and 75 percent of those have no employees (sole proprietorships).

To successfully penetrate the small-business and microbusiness category, marketers must have a thorough view of their targets that extends well beyond just a firmographic perspective. This perspective is too superficial because it doesn't capture information that keeps changing over time, such as the lifestyles, tastes and habits of small-business owners.

Instead, having a demographic, behavioral and attitudinal perspective on the small-business owner is necessary so marketing messages and product offerings can be modified for maximum impact. Within this segment, business owners are just as much consumers as they are businesses. Therefore, the consumer influence on business purchases should not be overlooked. 

Of course, all small-business owners are not alike. They have widely varying demographics, lifestyles and other variables. As marketers dig deeper into the data, they learn more about the distinct characteristics of each segment. By overlaying behavioral segmentation onto the business owner view, which relies on historical data, marketers can more accurately predict what a prospect or customer possibly will do in the future.

For example, in terms of issues of credit and finance, today's small-business owners often indiscriminately blend their professional and personal lives. In fact, research done by Experian shows that there is a distinct correlation between a small-business owner's personal credit and his or her professional credit. Owners often use personal credit cards for business purchases to obtain rewards like points or airline miles.