Specialization vs. Segmentation

I was recently talking to an MSP Owner about their company’s messaging. It appeared as though no matter how hard they tried, they just aren’t seeing a meaningful amount of engagement and traffic from their social media efforts. After a quick glance at some of their recent activity, it became obvious that there was nothing within the content to signal who it was actually for (and why they should pay attention to it in the first place). This led us down the path of trying to better narrow in on who they should be trying to reach and what those people actually care about. It also sparked an interesting conversation around the difference between specialization and segmentation and how these two things can easily be confused. 

What is specialization? 

As far as MSPs are concerned, I define specialization as the tailoring of services to accommodate the nuances of a particular group or technology. For example, some might specialize in the Dental industry, while others may specialize in Cloud Architecture such as AWS. Their total addressable market is limited to either the people who fit that persona or have a need for that particular solution. What they get in return for these limitations is the ability to offer a far better customer fit and experience. It can be difficult to specialize in many industries or technologies at the same time, which is why most specialized MSPs choose to go deep rather than wide in their expertise.

What is segmentation? 

Segmentation is the act of limiting an individual campaign or marketing effort to a particular group. By doing so, you are able to make sure that the messaging better connects with the target audience, as it is mostly tailored to their pain points and needs. An example of this would be if you launched a campaign that was solely targeted to Car Dealerships, which included a series of emails, ads and landing pages all speaking directly to this segment of your audience. This can be effective, whether the service you are promoting is “specialized” to that group or not (assuming you do not misrepresent it as such).

Why Segmentation Matters

As was the case in the conversation that I described, I have found that there is a common misconception among MSPs that implies that the only reason to segment your marketing is if your company specializes in one or a few industry verticals. I can see what would lead one to believe this, however I do not think it is always true. Even if you deliver the exact same service across your entire customer base, you should still market this service differently based on who you are speaking to. This is because those individuals lead very different day-to-day lives and thus will value different things. For example, an HR Director might value the way you assist with onboarding/offboarding employees, whereas an Office Manager may value your ability to maintain network uptime and VoIP connectivity. 

I think that it’s time that we separate specialization from segmentation, and come to the conclusion that segmenting our audience is almost always a worthy endeavor (regardless of how specialized the services being offered are). I’ve witnessed these results first hand, as I’ve seen the performance of MSP ad campaigns increase by 10x simply by narrowing the audience to a single industry or job function and tailoring the content to match. This relevance is also rewarded in the form of lower click costs and higher return on investment, which makes segmentation a no-brainer. I understand there is a fear of confusion, or these paths becoming crossed (ie, a Lawyer coming across content meant for an Engineer) however these are campaign, messaging, and structural challenges that are not that difficult to solve if you were motivated to do so. 

The Art of Segmentation

Different companies segment their audiences in a variety of ways, as there is really no right or wrong way to segment. For example, when I see ads from Barnes & Noble, they are usually for Business / Non-Fiction books, not Romance novels (maybe next time, Nora Roberts). I am sure that somewhere in their system I am flagged as having this particular interest or fitting the demographic profile of someone who might. The important thing is that I myself also identify with that segment, which is what makes these ads so effective. 

The least effective forms of segmentation are those where the individual may not be consciously aware of how relevant it is to them. The example of this that I see most often in our industry is ‘company size’. While you may definitely want to use company size as a filtering mechanism to ensure you are reaching an audience that you are capable of servicing, it is difficult to relate to users on this characteristic alone. A blog post titled “7 Technology Trends For Companies of 50-100 Employees” will probably not perform as well as “7 Technology Trends for Companies in the Legal Industry.” Even though both may be equally relevant, the latter is more top-of-mind in terms of how the audience identifies themselves. This self-identification is important, because it sometimes even outweighs reality. This is a topic for another day, but by this I mean that people will react more to segments that they aspire to associate with rather than those that they are actually a part of. Go figure. 

Here are a few of the most basic-yet-effective forms of segmentation that I have found for MSPs to use: 

Industry Vertical

The most obvious form of segmentation that MSPs use are industry verticals. The best part about this characteristic is that the data is readily available and in most cases completely obvious. You can know and understand which industry a company falls into simply by reading the name of their company. This is a luxury that should not be taken for granted. Another great feature of this form of segmentation is that the individuals therein are highly likely to identify themselves in this way. Climbing the ladder in their industry of choice is a big part of how they identify their professional lives and goals. 

Job Title / Function

Possibly the most relevant form of segmentation that you can find is with Job Title (ie, COO) and Function (ie, Operation). This is highly effective, because it very much relates to what the individual does on a day-to-day basis and how they represent themselves to others. Leveraging this form of segmentation can lead to significant improvements in campaign performance, however there is a catch. In terms of Job titles, there may be only a few individuals out of an entire company who have that specific title, so in some ways you may be putting all of your eggs in one basket. This is contrary to industry segmentation, whereas everyone at the target company may relate and respond. Another challenge is that individuals have a tendency to change roles every few years as they get promoted and/or change jobs, therefore this presents challenges in terms of how accurate the data you use to segment may be at any given moment. 

Technology Use

Another form of segmentation that may work is technology use and preferences. The best example of this is the contrast between Mac vs. Windows or Google Workspace vs. Microsoft 365. From hardware to software, there are lines drawn in the sand that separate one group of users from another which can be used to make your marketing more effective. For example, telling a group of Google users to “Try Microsoft Copilot” will likely not be met with the same enthusiasm or interest compared to a group of Microsoft users. While these are broadly adopted technologies, there are also more nuanced versions of this segmentation that can be used. The technology stack used by an HR Manager may be different that of a Controller. Understanding the tools that they interface with everyday will go a long way in how receptive they are to your messaging. 

Managing Your Segments

While segmentation is not necessarily a difficult endeavor, it doesn’t just happen on its own. The quality of your data, where you keep it, and how well you maintain it will all play a role in how effective your segmentation ultimately is over the long term. Here are a few tips to get you started: 

Use A CRM 

If there was ever a tool built for the purpose of building and managing segments, it’s your CRM or marketing automation platform. Afterall, segmentation is really just a data management practice and thus the place upon which you keep your prospect and customer data is the best place to start. Having all of this information in one place, and not scattered throughout CSV files in your downloads folder, will allow you to activate it whenever needed to deploy a highly segmented campaign. Most of these tools even allow you to create dynamic segments and will automatically add new or updated contacts to it when they meet the desired conditions. 

Tag Your Contacts

When actively building segments from your audience, the ‘tag’ feature can be your best friend. This is a great way to organize contacts in a way that is flexible and easily automated. For example, tagging contacts by some of the characteristics that we discussed earlier (Industry, Job Function, etc.) would allow you to easily create segments that match a specific set of tags. From there, if you wanted to send an email to all of the Office Managers in the Legal Industry, you could easily do so. As these contacts begin to interact with your content, you can also build rules to automatically add tags in order to build out an interest profile. This creates a similar effect as to how Barnes & Noble recommends books based on what I have viewed and purchased in the past. In your case, someone who downloads a lead magnet related to cybersecurity, may be more inclined to interact with other cyber-related content or offers.  

Enrich Your Data

You might be wondering, “But what if all I have is a list of companies or email addresses?” You have to start somewhere. The good news is that there are a lot of ways to enrich the data that you already have, to fill out useful information such as industry, company size, location, or job title, all of which will help you build more effective segmentation. For this, you can hire a researcher on Upwork or Fiverr, or use a data enrichment service such as Clay, Clearbit, Zoominfo, or Seamless. 

Conclusion

There is a well known quote among marketers that says “If you speak to everyone, you speak to no one.” That couldn’t be more true based on the results that I am seeing right now among MSPs marketing their business. While specializing your services to one particular industry or group can help improve customer fit, satisfaction, and retention, it’s not always necessary to leverage the power of segmentation in your marketing. For this, you simply have to have the attention to detail and the will to do it. 

SPONSORED BY ZEST