""Each of your B2B customers is different to the next."" Correct. ""Many of your B2B customers are similar."" Correct. This conundrum is a key one within B2B marketing. Recognising on the one hand the fact that no two businesses are alike and therefore need separate and individual treatment; whilst on the other hand acknowledging that the practicalities of B2B marketing mean that you cannot afford to indulge in true one-to-one marketing, and you will somehow have to find groups of customers with similar characteristics. In fact, more correctly, you should really find groups of customers with similar NEEDS, but we will come onto that later.

Classic approach number one - size

There are several classic approaches to B2B segmentation…or put more simply, splitting your customers into similar chunks (or segments), where customers within a segment are all similar, but each segment differs from the next. The first of these is to segment according to the business size. Essentially what this is saying is that small businesses need separate treatment from medium sized businesses etc etc. By 'size' we generally mean either a measure of the numbers of employees, or the turnover of that company. Things aren’t so simple as that, inevitably, as numbers of employees could be measured at the entire company level, or at the individual site level. Depending on whether you need to market to sites or corporate entities, this could be a crucial decision. Equally, at what level do you measure the 'company'? Some companies operate within a group structure, and there may be operating divisions within the group. Again, depending on your marketing needs, this could be a crucial decision. And UK or international? This will be key in influencing who you source you B2B lists from. Pushing all these complications aside for one moment, and returning to our simple 'size' segmentation, an example segmentations is listed below:

• 1-5 employees
• 6-25 employees
• 26-50 employees
• 51-100 employees
• 101-250 employees
• 251+ employees

The first thing to note is that I have outlined 6 segments. In practice, many companies cannot work with more than 8 or so segments. They would need separate plans, strategies, treatments, creatives etc for each segment, and this can be too onerous. In practice, many companies work with 4-5 segments. The second thing to admit to is that there is no real science behind the segment definitions. They seem sensible, and note are not overlapping, but they could easily have been based on different definitions. In practice, you may well want to have enough companies in each segment such that your staff can handle them - this may be roughly equal sizes in each segment, it may be fewer at the top end, recognising that they will need dedicated Key Account staff to treat them properly. A slightly better way of segmenting based on size would be to use an accepted and standardised definition of company size as below:

• OMB (One Man Band)
• SOHO (Small Office Home Office)
• SME (Small/Medium Enterprise)
• Corporate

Definitions for these are easily available on the Web, but a good starting place is the European Community website http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/ index_en.htm. Things are never quite so simple though - one mobile network we worked with had 3 definitions of a SME over an 18 month period - firstly based on external estimates of business size, then based on internal estimates of business size, finally based on the number of handsets they held.

Classic approach number two - sector

Another way to segment your businesses is using Industry Sector or SIC (Standard Industrial Classification). So all Manufacturing companies could be in one segment, whilst all Professional Services companies are in another segment. The ways in which these SICs are grouped together is a huge topic in itself, but clearly if your market is in a particular sector, say construction, then you may need more detail within that particular sector than in other sectors.

Getting clever

What you could then start to do of course is to get a bit clever. Because on the one hand you now have a simple company size segmentation, and the other hand you have a nice sector segmentation. Why not put one against the other so that you could identify, say, large Manufacturing companies, as opposed to small Professional Services companies. The world is now your oyster, and the only obstacles that stand in your way are budget and resourcing. Ah...tricky ones those. So at this point you may need to throw away your plans to overnight become the world's best B2B marketer, and take a slightly more pragmatic approach.

Needs based segmentations

The final point to cover is the one I alluded to at the start. That the segmentations I have outlined above really cover off the characteristics of your customers - what they are like. What you really want to find out though surely is, what do they want? The problem is, this information isn't readily available. There aren't handy UK business universes you can buy data from that have these golden nuggets of information. Increasingly in the B2C world they are starting to, with modelled scores of propensity of a customer to do something, like buy DM or online. What you need to do in the B2B world, is simple - go and ask them. Research is a fabulous tool for finding out what they really want. But its expensive, and normally can only be done for a handful of your customers. We worked with a mobile network company to segment their 750 top customers. They were the key targets, worth vast amounts of money, hence the priority. We used the Account Managers to get some key information about each account, with regard to that accounts' future potential, augmented this with UK business universe data (SIC, turnover etc.), and attached usage data from individual calls made by each mobile user, and further research to identify the nature of the job and their dependency on mobiles. Some of the results are shown below.

1. Individual account development

Account Managers use Account Reports to review current usage with the account and identify further potential.

2. Key targets indentified

Sector and Account Managers have reviewed Account Potential to identify accounts with the greatest potential in relation to current value.

3. Identified leaders and laggards

Used the Segmentation Maps to identify accounts with high potential yet low value; identified Lead accounts and suitable learnings and practices that can be applied to other accounts.

4. Segment plans developed with appropriate propositions

Workshops held to identify complelling propositions for each segment.

5. Driving acquisition strategy

Focus on high potential segments within the prospect base.

6. Account management structure reviewed

Industry sector distributions reviewed accross the top-level segments; top-level segment profile reviewed for each Account Manager; and re-aligned accordingly.

The segmentation was highly actionable, as not only did it identify the characteristics of each account, but also their needs, and their future potential. It enabled the account management structure (based on industry sector) to be better aligned, identified leader and laggard accounts within each sector, identified key targets for each account manager, and drove acquisition strategy. So, as you see, its simple. Now go off and do it. Oh, and if you need any help, you know where to come.