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What is Firmographics?

Company to consumer marketing techniques use demographics to compartmentalize and target specific groups of ideal customers. When a company engages in business to business marketing such as direct mail, they use the term firmographics to explain the same process. They are also used for agencies, organizations, non-profits and government groups.

Firmographics divide businesses using five main characteristics:

1. General industry – Direct mail marketing to a clothing manufacturer in the fashion industry would be very different than to a green energy provider.

2. Geographic location – Does the company target international customers or is US-based only?

3. Size of customer base — Do they market to millions or to a very select clientele?

4. Status and structure — Startup or established company? How many locations?

5. Performance, profits and sales information — How successful are they? Are they looking to expand?

Within those broad choices, many smaller divisions take place in the quest for the perfect company customer for business to business sales. Other factors that can affect marketing decisions include number of employees, seasonal profit swings, growth or decline trends and who makes the purchasing decisions for that company.

How do Firmographics Improve Direct Mail and Other Marketing?

Firmographics Improve Direct Mail and Other MarketingIt is an immutable truth of business that the more highly targeted the audience for your marketing campaigns, the less effort and money it will take to turn them into customers or clients. Although postal direct mail still has some of the best conversion rates of any direct marketing methods, it can still receive a boost from using pieces designed specifically for one segment of the targeted business community.

For example, if your company wants to sell flanges to the plumbing industry, sending out an attractive flange postcard to every plumber and pipe-fitting company in the United States would be a horrible waste of advertising funds and time.

Using firmographics to determine what companies would actually be most likely to buy the flanges frequently and in bulk greatly increases the chances that they will be sold. How is this done? First, the industry is identified. In the case of plumbing flanges, this is obvious.

Next, what geographic location would best be served by your flange offer? If you sell parts for gas pipelines, you might want to target Texas or Louisiana where high production rates exist. The more firmographics and Firmographic Information you can gather and identify, the higher the chance of success is.

All of this success depends, however, on more than just using firmographics intelligently. How your company designs their direct mail offer should differ based on the specific audience you target. A natural gas company in Texas with hundreds of employees and thousands of customers would respond well to a very different advertising postcard than a family owned plumbing company in New York.

With so many quality direct mail lists available, finding the collection of postal contact information for the best possible customer base is easier than ever. Review direct mail examples and design an effective direct mail campaign for each of your business to business marketing contacts and push the ROI even higher than normal.

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