Ever savvy marketer knows that “Industry” is a very common data point to segment on, however the challenge with the industry information available is not reported consistently since each company defines them differently. The most reliable way to identify a company is with SIC or NAICS codes.
Most marketers don’t understand why these codes are so much more than just a random assortment of numbers–however, a majority of business databases and other research tools use these codes to classify and organize industries. This blog will cover what these codes mean and how to use them for effective B2B marketing.
First, let’s start with what they mean.
This code stands for the North American Industry Classification System, which includes the United States, Mexico, and Canada. It’s the Census Bureau’s organizational structure for classifying business establishments. This system is hierarchical with broader industries at the top of the numerical range, and more specific industries have more numbers. The Primary code (underlined in example) indicates a company’s primary line of business. This code is determined by a code definition that generates the highest revenue for that company at a specific location annually.
Here’s an example:
238110 Poured Concrete Foundation and Structure Contractors
NAICS codes array the economy into 20 sectors, which are separated into 99 3-digit sub-sectors. These are then broken up into 311 4-digit industry groups, which are further subdivided into 709 5-digit industries, and finally dis-aggregated into 1057 6-digit U.S. industries.
Fun stuff, right?
SIC stands for Standard Industrial Classification, which are four digit codes that are used by the US government to identify the primary business of the establishment. The first two digits of the code sequence define the major industry sector, and the second two digits further refine the sub-classification of that sector. This code was created to facilitate the collection, presentation, and analysis of data. These codes provide a uniformity and comparability of data that are collected by either federal, state, and private agencies. Companies in the same industry are assigned the same number or SIC code.
For example, General Motors, Ford Motor Corporation, Honda, and Toyota were all given the SIC code of 3711.
The SIC system arrays the economy into 11 divisions, that are divided into 83 2-digit major groups. These groups are further subdivided into 416 3-digit industry groups, and finally dis-aggregated into 1,005 4-digit industries.
How B2B marketers can use these codes to their advantage
These codes can help you identify specific buyers within your target market. For instance, there are many words that can apply to different things–like instrument.
These codes help decipher what type of instrument.
- Scientific instrument, like a calculator
- Musical instrument
- Measuring device used for vehicle or aircraft
A company whose target market is musical equipment is not going to want to market to National Instruments. To prevent this, use siccode.com to see a list of companies in each category. By searching each of your target industry codes, you’ll find details for companies in your niche and use market segmentation. From there, you can further refine your target buyer organizations through detailed information about a company’s product offerings, contact information, blog posts, and other collateral.
With all this given information, you can then target related industries by going back up. After this, you can then go adjust your lead-qualification criteria once you identify the most appropriate targets for your marketing campaigns. This will help create more qualified leads for follow up–which will hopefully turn into customers!
Primarily use the NAICS code as it was developed to eliminate the inconsistent logic used in the SIC system. However, many companies still use the SIC code if they already have established marketing plans based market-oriented structure of the SIC code.
The bottom line is, these codes can significantly help you in defining your target market. It is important to understand what they mean, how to research them, and how to use them to your advantage. As your company evolves, these codes become a guide to customers and prospects to help curate more specific content geared toward them.
Targeting the right customers with the right content is, of course, the holy grail for marketers. Leadspace can help with that. Download the Ultimate Guide to Driving Revenue with a B2B Customer Data Platform to learn more about what we can do for you today!