4 Times We’d Choose Qualitative over Segmentation Research for B2B Clients

If you’re in market research and you’re working the business-to-business category, you’ll likely be asked to help with market expansion—finding new customers and identifying opportunities for profitability. The most obvious market research solution for this type of assignment would be segmentation research. But not so fast. Segmentation is a tried-and-true approach, but for some clients it may not be practical, and sometimes, it’s just not feasible. That’s why qualitative research can be a great alternative for this category.    

Knowing that B2B is very different from B2C helps make the case, in that business is conducted between companies, rather than between a company and individual consumer. Therefore, everything is more robust and more complicated, and that’s why it needs to be viewed and approached differently in market research.

Remember, the B2B model can be quite complex

A B2B model could be selling software solutions (SaaS) to companies, medical devices, financial services, or a niche market, like energy storage systems. These types of transactions make segmentation research more complicated. For example, B2B transactions typically involve more complex sales processes and longer sales cycles, and they’re often dealing with larger customers and more significant purchases. This can make the research more high-stakes, and also more difficult to identify and reach key decision-makers. In these complex relationships, which can sometimes involve more than 6 stakeholders, there can be confidentiality concerns and hesitation to share sensitive information about business practices. All of these are unique challenges and they must be considered before any market segmentation discussions take place.

Segmentation research helps identify and define—but will it go as deep as you need?

While a segmentation study can inform marketers and decision-makers on how to best develop marketing strategies, in the B2B world, it may not provide enough market expansion insight. Plus, there are other market research hurdles that can come up for B2B clients, too, like limited number of respondents, complexity of products and services, difficulty in reaching decision-makers, confidentiality concerns, or more complex supply chains.

When appropriate, we recommend qualitative as an alternative for B2B market research

Qualitative market research can be a more practical alternative for the B2B category. For starts, it can be designed with much fewer respondents. Because of its intimate nature, qual research can get a much deeper understanding of the buyer-seller relationship. Just like segmentation, qual can identify communications hurdles that need to be overcome, and uncover target profiles as new opportunities, but it can also shed more light on what determines decision-making, and whether or not a product truly meets a buyers’ business needs. It can also map out the buying journey and timeline—from early investigation of options on through to purchase.

These four B2B research challenges helped us to see why qualitative was a more practical approach

1.Limited number of respondents.

This is a big challenge when conducting B2B market research. Because B2B markets tend to be more specialized and focused, there may be a smaller pool of potential respondents to draw from. Limited responders not only make it more difficult to gather a representative sample, but can increase the research cost as respondents likely need incentivized by more substantial honoraria. An example from our experience: a company selling bankable solar inverters had difficulty finding enough respondents for a quantitative segmentation study that would effectively identify new opportunities. That made sense. However, we suggested conducting a form of qualitative research to not address the concern for sample representation, but provide deeper understanding of the target audience and potentially uncover new ways to grow their business, previously not even considered, and unlikely to make it into a segmentation survey instrument.

2. Complexity of products and services.

In B2B, products and services are often more technical and require a deeper understanding of the market. This can make it challenging to design surveys and other research tools that accurately capture customer needs and preferences. Missing just one or two can alter the results significantly. For example, one of our SaaS clients had an existing product and considered moving towards an ecosystem model by integrating third party products to create value. The product integration would also provide a more robust, connected, end-to-end user experience. We realized using qualitative research as an alternative to a segmentation study would uncover the gaps in a buyer’s understanding of features, as well as drilling deeper into the functional and emotional benefits.

3. More complex supply chains.

With a B2B model, you’ll find businesses use multiple suppliers and multiple partners, sometimes all over the globe, and all are involved in the production and delivery of products and services. During the pandemic, we learned how vulnerable complex supply chains are when we experienced product shortages, shipping delays and price increases. But if disruption helped companies refocus on making their supply chains more efficient, we also learned a supply chain plan can make a company more attractive. In one example, we learned through IDI sessions among B2B decision-makers that the company sponsoring the research didn’t have the same supply-chain delays that their competitors had been experiencing. This was news to our client. And since they didn’t have supply chain issues, the client didn’t consider supply chain modifications important to their strategy. In this case, a qualitative research study uncovered a competitive advantage for this client that probably would not have been uncovered through quantitative surveys.

4. High stakes.

B2B purchasing decisions often involve significant financial investments and have a significant impact on business operations, which can create high stakes for both buyers and sellers. As well, there can be too few decision-makers or hard-to-find executives that make the research complex, but their insights affect an entire organization. A seasoned qualitative moderator can be a better solution in these high stakes situations as they can uncover biases and attention management issues during in-depth interviews. For example, when we conducted research in the insurance industry to understand the difficulties around COBRA administration, we learned that our client knew very little about their customers’ needs and experiences when dealing with COBRA. In fact, qualitative research with key executives revealed they were hyper focused on meeting current employees needs rather than serving former employees, yet their main goal in partnering with a COBRA admin partner was to make the service invisible. We identified a large, actionable gap.

If you’re looking to conduct research in the B2B industry, remember that segmentation research is the gold standard, but it’s not always executable. Over the years, we’ve found qualitative research is a smart alternative in these situations. Which methodology is the right way to go for your project? Let us take a look and we’ll help you make the most of your research dollars.