In April, RAPP UK’s Jen Musgreave vented in Campaign magazine about the over-reliance of marketers on demographic segmentation. Her argument was that demographic groupings are clunky, inaccurate and hide massive variations in personality, preferences and habits.
To take one example, she highlighted how “the media habits of a 60-year-old are closer to someone of 30 than 70”. Yet as she pointed out, marketers often lump anyone older than 60 into one convenient bucket, labelling it something like “retired”, “senior citizen”, or simply “over 60s” and marketing homogenously.
Musgreave’s analysis is spot on. It also made me realise we’re guilty of the same thing in B2B marketing.
Naturally, there’s lots of segmentation in B2B. We often talk about targeting the “buyer” or “key decision maker” and segregate based on job title accordingly: Finance Directors, CEOs, heads of Risk or Compliance. CMO, CCO and General Counsel.
No-one should ever argue that all Finance Directors can be marketed to in the same way, but within certain subsets (the FTSE 100, for example), many of them do at least share common challenges and priorities.
The much more damaging and pointless segmentation is company size. In particular, Small and Medium Enterprises or “SMEs”. These have become the ‘over 60s’ of B2B marketing.
Consider the following five statistics about Britain’s SMEs, which are commonly cited when discussing this segment:
That’s right. From a marketing point of view, we put 99% of Britain’s B2B audience in the same bucket. So we willingly group together a 10 person start-up in the same pool as a 230-strong company that’s been going 40 years and has a turnover fifty times higher.
Still not convinced? Think of it this way: what do a start-up focused on blockchain, a family-run chain of butcher’s shops, and a mid-sized advertising agency have in common?
Answer, very very little. Yet we’d traditionally lump them into the same SME group and build a marketing or PR or advertising campaign built on a homogenised set of research data, beliefs, strategy and tactics.
Are there exceptions for B2B marketing to SMEs? Yes, of course. When the UK Government introduced pensions auto-enrolment there was a near-blanket need for all SMEs to comply by a certain date, based on a tightly defined set of rules. Any pensions consultant looking to drum up new business could build a marketing campaign based on these rules and, with some tweaks in tactics, market to the SME base pretty much as a whole.
This should be the exception rather than the norm though. Different types of SME businesses need very different things from their accountant, their payments provider, their legal advisor, or their bank. And those different SMEs will respond very differently to marketing campaigns as a result.
Last November, my colleague Tom argued that cause marketing is not a thing. It’s high time we reached the same conclusion on SMEs. Ban the term from marketing discussions and start treating this group of 5.5 million businesses for what they really are.