Part of the problem is supply — bigger data volumes offer greater insight around B2B and B2C buying preferences both immediately and over time.
But variety also plays a role. While information about individuals at a company (demographics) and the technology they use (technographics) can help enhance marketing and sales outcomes, there's also a place for firmographics, which are datasets that help businesses effectively segment organizations into meaningful categories.
The challenge? Although this is a great high-level definition, it doesn't offer much in the way of specifics or actionable strategies.
In this complete guide to firmographics, we'll define firmographic data with a look at key forms and functions, explore how it's used for segmentation, and dig into the types of questions that can help your company locate — and leverage — firmographic data.
What is firmographic data?
Demographic data focuses on information tied to individuals. Data such as contact names and customer purchase preferences are examples of demographic assets that can be used to drive targeted marketing campaigns.
Firmographic data shifts the focus to organizations — or firms — to collect and analyze key information about the operation of enterprises themselves. Common firmographic data examples include:
Industry type — From manufacturing or logistics organizations to financial, professional or legal service firms, industry type is a key vector for segmentation. Worth noting? Many companies occupy more than one industry vertical and can also occupy multiple firmographic segments.
Organizational size — How big is the organization, both in terms of physical location and staff size?
Total sales and revenue — Both quarterly and annual information is relevant here. While annual sales and revenue data can drive long-term sales strategies, quarterly results can help pinpoint more immediate needs.
Current location — Where is the company headquarters located? How many satellite offices do they have, and where?
Ownership framework — Is the company a public organization? A private enterprise? An NGO, charity or non-profit? Each comes with their own unique market approach.
Growth trends — Is the company growing, downsizing or maintaining its current market position? All three movement metrics offer opportunity, but must be approached in different ways.
There's also a crossover segment of firmographic and demographic data as it relates to specific job roles, titles, departments, and potential buying power.
By understanding more about the people responsible for decision-making within an organization along with the operational framework that surrounds them, businesses can better target marketing efforts to receptive audiences with the power to take immediate action.
Benefits of Firmographic Segmentation
The primary goal of firmographic data is to help organizations segment potential B2B customers into meaningful segments, which in turn can reduce the distance between observation and action.
If marketers, sales teams, and C-suites have access to segmented information that classifies prospective clients by size, location, revenue, or current growth trajectory, they don't need to spend time and effort separating this data before making decisions. Instead, potential purchasing partners are pre-sorted into relevant categories.
Segmentation offers specific benefits for organizations, such as:
1. Improved market targeting.
Understanding the physical and market size of potential B2B buyers can significantly improve sales targeting. Here's why: Smaller, “mom and pop” businesses don't have the same needs as larger enterprises — while both are potentially valuable clients, their paths from initial contact to sales conversion are significantly different. For example, while many SMBs want one-size-fits all solutions to help reduce total complexity, many enterprises are after custom-built tools and technologies to help address specific issues.
2. Enhanced customer service.
Leveraging key firmographic data about where companies are located and how their employees are geographically distributed can help improve customer service offerings. Consider a manufacturing firm located entirely within a single state — chances are they'll prioritize partners that can deliver local service. Multinational firms, meanwhile, often prefer on-demand, distributed digital services.
3. Long-term buying potential.
Companies moving up the market offer the potential for B2B businesses to get in on the ground floor and enjoy increased conversion volume over time. Enterprises that are currently downsizing, meanwhile, also come with sales potential but require a different approach with services that are both cost-effective in the short term and can scale over time as revenue targets evolve.
Key Firmographic Questions
So how do you gather firmographic data that's relevant to your brand and can help drive corporate success? It all starts with asking the right questions. Commonly-used queries include:
When was the company founded?
How many employees in total does the company have?
How many staff at each office or satellite location?
What is the company's revenue per year?
What percentage of their target market share does the company currently have?
Are they currently in a growth phase, downsizing or remaining relatively consistent?
What does their organizational structure look like (flat leadership, standard hierarchy, etc.)
When it comes to collecting firmographic data, you've got three broad options: Survey companies directly, conduct online reconnaissance or purchase firmographic information from a data clearinghouse or similar service.
All three come with potential benefits and drawbacks. For example, while surveys offer the most accurate firmographic information, many companies prefer not to share this data — especially if you're taking a "cold call" approach.
Online searches, meanwhile, can turn up a host of useful firmographic data but there's no guarantee about its accuracy or relevance; the actionable value of data gathered this way depends heavily on the source and the date the information was obtained.
Purchasing data from a reputable seller provides the most accurate and up-to-date option, but prices vary significantly and it's worth cross-referencing this information with publicly available sources to ensure sellers are consistently accurate.
Finding a Firm(ographic) Foundation
Timely, accurate and actionable "graphic" data — demographic, technographic, and firmographic — can help B2B organizations create custom-built sales and marketing strategies and improve overall conversion rates.
To ensure firmographic frameworks deliver intended outcomes, it's critical for companies to focus on both segmentation forms and decision-making functions.
By asking the right questions, accurately segmenting potential customers and using this data to inform sales and marketing efforts, companies can reduce the time between information and action while simultaneously increasing sales success.
Originally published Dec 23, 2020 7:00:00 AM, updated December 23 2020