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Since the 1950s, marketing has typically involved segmenting customers into specialized groups based on demographics, behaviors, attitudes, and other psychographic factors. The idea is that appealing to customers' unique needs and preferences will result in higher sales and increased revenue. But what if people aren’t as different as we think?
The urge to differentiate is nothing new. Throughout history, scientists and philosophers have sought to classify differences as a way to better understand the world. As they encountered new phenomena, their classification systems became increasingly complex as they strove to capture every detail that made things unique.
While some classifications were generally correct, early attempts often used inconsistent methodologies that considered multiple factors simultaneously, leading to confusion rather than clarity. The lack of standard conventions meant that categorizations could become unwieldy, with lengthy strings of descriptors that changed and grew as new traits were discovered. Rather than making identification easier, these details instead complicated accurate understanding.
The Problem: B2B Marketers today drive up complexity and costs by focusing on imaginary differences.
You might wonder how the evolution of scientific classification relates to marketing.
Just like past attempts to group differences found in the natural world, marketers similarly try to group differences found in customers because of the belief that treating buyers as different from one another is more profitable. By combining traits into complex buyer profiles, companies aim to avoid direct competition, and they invest significant efforts to demonstrate how their brand alone meets the specific needs of each segment.
However, focusing on differences raises costs by increasing the investment required to create, distribute, and measure the effectiveness of marketing efforts for each identified segment. Narrower targeting can drive up media costs, and including more personas in your marketing plan can increase creative costs across owned and paid media properties.
And there is little evidence to suggest that focusing on differences leads to a stronger competitive advantage. In fact, our research shows that the only way to be competitive and grow your brand is to reach the category at scale. In a proprietary B2B Institute-commissioned study for clients of our B2B Edge program, conducted by the Ehrenberg-Bass Institute of over 300 IT decision makers in the cloud category, brand user profiles were found to be largely similar across the board, with few deviations across enterprise maturity or primary areas of business.
Whether it comes to cloud, CRM, or any other B2B category, customer bases are more similar than they are different, and creating complex segments doesn’t confer a strategic advantage because niches are imagined in most cases. We’d like to think we only compete with brands of a similar size, or that we disproportionately appeal to a subset of customers, but neither is true. Trying to carve out a customer niche only places a ceiling on your growth potential.
The Solution: B2B marketers must search for similarities to reach and resonate with the category at scale.
Today, marketers face a challenge similar to that of early researchers, who struggled with classification as their knowledge expanded. The abundance of buyer data provides marketers with a wealth of details, but segmenting buyers according to the traits that make them different is overly complex and counterproductive to growth. Sometimes, just a few key characteristics are all that's needed to define a buyer persona effectively.
This doesn’t mean that buyers aren’t complex or that they all purchase the same categories. Rather, it means that marketers—whose focus on scaling brand awareness includes demonstrating how products meet buyers’ needs and wants—have a more effective and cost-efficient approach available to them. Instead of building personas around convoluted combinations of demographic and psychographic differences, build personas around the similar situations that buyers encounter when they think of your brand.
Category Entry Points are the strategic similarities across category buyers. Use CEPs to build and execute your marketing strategy.
There are many different schools of thought when it comes to segmentation, but at the B2B Institute, we believe the approach that allows you to optimize for effectiveness, efficiency, and customer-centricity is with Category Entry Points.
Category Entry Points (CEPs) are the collective, recurring needs and pain points that buyers of a category experience and which lead buyers to enter a purchase decision. Regardless of who the buyer is and what their discrete preferences may be, CEPs are a shared language built around common buying situations and credibility that the brand can meet buyers’ requirements.
A CEP-led marketing strategy can not only reduce costs by allowing you to target and position to broader audiences; it can also contribute to long-term brand growth by strengthening brand associations with several buying situations over time—something that the niche messaging of a segmentation strategy would struggle to accomplish. The more situations in which a buyer can recall your brand as a potential solution, the more likely they will be to buy your brand and remain loyal across buying cycles. Searching for similar CEPs across your customer base when building and executing your marketing strategy can pay enormous dividends.
Read more about how to build a marketing strategy that capitalizes on similarities, rather than drowning in differences, in our Category Entry Points In A B2B World research.
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Legal-tech firm DISCO found the similarities in their category by messaging around a common pain point for lawyers: “Stop wasting time on doc review.” Focusing on this similarity allows them to reach big law firms, solo practitioners, in-house legal teams, and boutique firms alike. And focusing on a single, resonant message allows them to invest more on creativity – just take a look at their amazing character interpretation of Cecilia AI!