Account Segmentation: Priortize Your Top High-Value Accounts

INTRODUCTION:

We know that Account-Based Sales is the next big thing in B2B, but only with the right strategic plan can we successfully implement an Account-Based aligned team to drive the growth.

Ideally, any target account is that company you want to turn into your customer, account-based marketing is about you treating each account as a market of one with everything customized and having dedicated resources to serve that account.

There has been a lot of debate on how scalable ABM can be when there are thousands of accounts to target.

In the last few years, a new style of ABM has emerged, where you prioritize your accounts based upon your business objectives so that you don’t funnel all your resources to the wrong accounts.

Chances are, you won’t engage all the target accounts in the same campaign, the account-based marketing strategy can actually range from going intensive with mega accounts to having scalable efforts on thousands of accounts you might also want to target.

Using technology, data, and research you can prioritize, segment your dream accounts, simply referred to as tiering up your accounts.

What is Account Segmentation & Why it is Important?

Account segmentation is a strategic approach that businesses employ to categorize their customer base into distinct groups or segments. This segmentation allows companies to tailor their marketing, sales, and customer service efforts to the unique needs and preferences of each group.

Enhanced Customer Understanding: By segmenting your accounts, you gain deeper insights into your customers' behavior, preferences, and pain points. This knowledge is invaluable for creating targeted marketing campaigns and improving customer satisfaction.

Increased Sales and Revenue: When you tailor your offerings to specific customer segments, you're more likely to meet their needs and increase sales. Studies show that personalized marketing can boost conversion rates by up to 10%.

Efficient Resource Allocation: Account segmentation helps allocate your resources more efficiently. You can focus your marketing and sales efforts on the most profitable segments, reducing wasted resources and improving your return on investment (ROI).

Improved Customer Retention: Customized experiences and better-tailored solutions make customers feel valued. Happy customers are more likely to stay loyal and recommend your brand to others.

How to Implement Account Segmentation?

1. Collect Data: Start by gathering data on your customers. This could include information from your CRM system, website analytics, surveys, and social media interactions.
2. Define Segments: Analyze the data to identify commonalities and patterns among your customers. Create segments based on factors that are relevant to your business goals.
3. Develop Personalized Strategies: Tailor your marketing, sales, and customer service strategies for each segment. Create content and offers that resonate with the specific needs of each group.
4. Measure and Refine: Continuously monitor the performance of your segmented strategies. Use key performance indicators (KPIs) to assess their effectiveness and make adjustments as needed.

Account Segmentation

That's tiering your accounts into your Tier 1 (high priority), Tier 2 (medium priority) and Tier 3 (low priority) accounts. When you’re able to do this effectively, you begin to scale your ABM implementation, which is where the real magic rests.

By choosing a pyramid to visualize the types of Tiers, you immediately get a feel for the number of accounts that can be supported at each level. The closer to the top of the pyramid, the higher the touch and customization requirements. This means your investment will be higher and must be offset with appropriate goals – by account.

Before we jump in, Segmenting your accounts into Tier 1, Tier 2 or Tier 3 comes down to on what basis you’ll segment in these 3 different tiers.

1. Geographic Segmentation:

Geographic segmentation divides accounts based on their location or geographic region. It's particularly relevant for businesses with products or services tailored to specific regions. Recent data indicates that 56% of consumers prefer to buy from brands that offer localized content and experiences. For B2B companies, this highlights the importance of geographic targeting to enhance customer engagement.

2. Firmographic Segmentation:

Firmographic segmentation involves categorizing accounts based on objective company attributes. These can include industry, company size, location, revenue, and more. It helps target businesses that fit specific criteria.

Recent data from the B2B industry indicates that 68% of marketers believe firmographic data is essential for successful segmentation. For example, knowing that companies in the healthcare industry have distinct needs compared to those in finance allows for tailored marketing strategies.

3. Technographic Segmentation:

Technographic segmentation focuses on the technology stack used by target accounts. It helps identify accounts that are compatible with or in need of specific technologies or services.

In the tech industry, for instance, the adoption of cloud computing solutions is on the rise. Technographic data can highlight accounts still using on-premises solutions, creating opportunities for cloud service providers.

4. Intent:

Intent data segmentation relies on monitoring the online behaviors and search patterns of target accounts. It identifies accounts showing interest in your products or services and allows you to prioritize them for personalized outreach.With the rise of AI and machine learning, intent data analysis has become more precise. 

It's estimated that 70% of B2B marketers use intent data to some extent in their ABM strategies to identify hot prospects.

5. Value:

Value segmentation is a good way to segment your ABM accounts if you want to focus your marketing efforts on your most valuable accounts. By segmenting your accounts based on their lifetime value, you can identify the accounts that are most likely to generate the most revenue for your business.

To calculate lifetime value, you can look at your accounts' past spending history and their potential for future growth. Once you have calculated lifetime value, you can segment your accounts into different tiers. For example, you might have a tier for accounts with a lifetime value of over $1 million and a tier for accounts with a lifetime value of under $1 million.

Once you have segmented your ABM accounts, you can start to develop Ideal Customer Profile(ICP). ICP is a description of your ideal customer, based on attributes such as industry, size, location, revenue, and firmographic data. ICP is essential for account segmentation, as it helps you to identify the accounts that are most likely to be a good fit for your product or service.

Your ICP should be used as the basis for your account segmentation strategy. By segmenting your accounts based on your ICP, you can ensure that your marketing and sales efforts are focused on the accounts that are most likely to be interested in your product or service.

Here is an example of how to link ICP to account segmentation:

ICP:

1. Firmographic: 

1.1 Size of the employee-100-500 employees

1.2 Industry- Fintech

1.3 Revenue: $10M-$50M

2. Geographic- Asia Pacific Countries
3. Technographic- Uses Salesforce CRM

Tiering the List of Target Accounts

Tier 1 (High priority)

These accounts get the “full” Account-Based Marketing treatment – meaning each one gets deep research, a customized plan, personalized content, bespoke campaigns, and a lot of 1:1 attention.

You map out each buying center, understand where there may be revenue potential, build out the organization chart and see which contacts you know and which you need to know, research key business priorities and individual motivations, and identify relationships and connections to the account. You publish detailed account dossiers, maintain them quarterly, and even have internal chat groups or forums dedicated to each account.

You put together marketing plays that are designed for that account specifically, and you involve your entire organization, from the CEO down, to land and expand these accounts.

This style of ABM works great and here are some generalized traits of tier 1 accounts.

Number of accounts: 10-20

Strategy:

1. Focus on Account plans
2. Deep research and 1:1 Personalisation
3. It involves Sales+SDR+Marketing+Executive support

Timeline: Last’s months to a year

Tier 2 (Medium priority)

While you can probably count the accounts getting Style 1 (TIER 1)  on your fingers and toes, Style 2 lets you apply much of the focus and benefits of account-based marketing to a broader list – usually measured in the low hundreds of accounts. Some folks call this “ABM Lite”.

Tier 2 accounts segmented also get individual research, but perhaps it’s limited to a few key talking points for each account (e.g. spending three minutes to find three key selling points).

Since these accounts are often smaller, mapping out individual buying centers may not be as challenging. But no matter what, you still want to spend time making sure you have quality data at the account level, as well as for each of the key people in each persona in the organization – and you’ll want a process to keep those insights fresh, at least annually.

These accounts may not get completely customized marketing plays and content, but they should still get highly relevant touches based on their industry and persona.

Instead of 1:1 campaign, these accounts get 1: Few campaigns.

Instead of fully bespoke content, perhaps you take content written for their industry and customize it with their logo on the cover and a personalized first and last paragraph.

However, here are the key characteristics of Tier 2 accounts in general.

Number of accounts: 100-500

Strategy:

1. Focus on Segment plans
2. Industry/solution level Personalisation
3. It involves SDR+Marketing

Timeline: Multi-touch over weeks

Tier 3 (Low priority)

This style covers all the accounts that you want to target but doesn’t have the resources for personalization and customization. These will often be smaller accounts and can be counted in thousands.

You may target these accounts with specific outbound tactics, sometimes account segmentation by industry or solution, but the rest of the time you’ll simply use broad demand gen tactics but target specific accounts, including ABM advertising, content syndication, and events.

Programmatic account-based marketing is basically traditional marketing with account-level targeting. The key difference from demand generation is that instead of scoring leads, you track account-level engagement and wait until the account hits a sufficient threshold to label them a Marketing Qualified Account.

Continuing the example..

 Account Segmentation/Tiering The Accounts 

• Tier 1: Fintech companies with 100-250 employees in the APAC with a revenue of $10M-$25M that uses Salesforce CRM
• Tier 2: Fintech companies with 500-100 employees in the APAC with a revenue of $25M-$50M that use Salesforce CRM
• Tier 3: Fintech Companies with 50-100 employees in APAC with a revenue of $5M-$10M that uses Hubspot CRM

By segmenting your accounts based on your ICP, you can create more targeted and effective marketing and sales campaigns. For example, you could create different landing pages, email campaigns, and social media campaigns for each segment. You may also want to personalize your content and messaging to each segment.

You can do account segmentation according to priorities like revenue to be generated, the number of employees, Industry, growth etc. Depending on what qualities you choose, you can then place your accounts in tier 1, tier 2 or tier 3.

For example, if revenue is your priority, place the accounts in your ICP with the highest revenue in tier 1, with medium revenue in tier 2 and so on. Here the highest revenue can be 1 billion or 1 million that totally depends on your company's ICP.

How to do Account Segmentation?

No one style is better than another and all three tiers of account based marketing play a role in your business. Most important is that you answer these three questions...

• Which accounts go to which tier?
• How much sales and marketing effort goes into each tier of accounts?
• How much revenue and pipeline do you expect to drive from each tier?

Now that you have high-level insights on account segmentation, and prioritizing the list of target accounts, make sure everyone in your organization is aligned to personalization and resources applied to each tier.

Feel free to check out our own complete Account-Based Alignment tool Intandemly. 

CONCLUSION:

Account segmentation is a powerful strategy that can significantly impact your business's success. By understanding the importance of identifying and targeting your Ideal Customer Profile (ICP), you can tailor your marketing efforts to reach the right audience with maximum impact. 

Implementing effective account segmentation requires careful planning and consideration of various factors such as firmographics, behavior, and engagement levels. Additionally, tiering your accounts based on their value allows you to prioritize resources and focus on high-potential prospects or existing customers.

To make the most out of account segmentation, remember to regularly review and update your ICP as market dynamics evolve. Continuously monitor and analyze data to identify patterns or trends that can inform future strategies. Leverage technology tools like CRM systems or marketing automation platforms for streamlined processes.

By adopting this approach, businesses have experienced increased customer satisfaction, improved conversion rates, higher revenue growth, and long-term loyalty from their target accounts.

So go ahead – take charge of your sales and marketing efforts by implementing account segmentation for maximum impact. 

Remember: knowing who to target is just as important as how you target them. Embrace this strategy today, revolutionize your approach towards acquiring new customers while nurturing existing ones - watch as it transforms not only your bottom line but also deepens relationships with clients in ways never thought possible before!

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