B2B & B2C comparison

I was recently asked on my opinion if B2B or B2C differs when it comes to acceleration. In short the answer is that it does not matter.

What is important is that the venture is aware of the differences of the models and their implications.

B2B is short for “Business to Business” and indicates that sales are made between two or more businesses.

Examples here would be product-based B2B – automotive part manufacturers which often sell their products to other companies (the car brands who assemble all parts into the final product) or wholesalers who sell their products to retailers.

Service-based B2Bs – accounting companies which support other companies to do their accounting and taxes.

B2C is short for “Business to Consumer/Customer” and indicates that sales are made between a business and a consumer/customer.

A third (more rare) form is B2B2C, which stands for “Business to Business to Consumer/Customer.” This one will be ignored for now.

These forms differ in the way the marketing and sales is executed.

An important difference between B2B and B2C is that the sales approach for B2B differs from the B2C sales approach. B2B tends to be more strategic and appeals to the buyers’ rationality. B2C is more tactical and tends to appeal to the buyers’ emotions.

B2B

B2B is a sales model that involves one business selling products or services to another business. For a successful B2B sales approach the company has consider many variables. (only a few insights are posted here)

As a B2B company you need to ensure that …

  • the customer sees and understands the value of your product / service.

In case the venture does not provide the lowest price offer, it needs to ensure that the customer understands the added value of the product / service. This value can be stated in terms of “return on investment” which can outpace the low cost providers of their key deliverables, such as quality, brand, dependability, reliability, on time – or just-in-time-delivery.

  • the product / service offering is easily understandable and not complex.

Cancellation or delay in the deal process can be a result when uncertainty enters the sales process. In order to minimize the uncertainty factor for the customer the venture needs to ensure that the prospective customer comprehends the sales offer and that the sales offer does not leave any questions unanswered. Here the venture may follow the KISS approach (Keep It Simple Stupid).

  • the customer believes the venture.

When the prospective customer does not believe that the product / service will solve their problem or serve the need /want, then the issue is rather conceptual than personal. The venture needs to build more rapport and trust with the customer relationship.

  • the customers feel that they cannot do it without you (especially for service-based B2B).

This is one hurdle for service-based B2B sales. The ability to show the customer the opportunity cost of doing a service themselves or using the product can be an educational element to finally closing a deal. The consumer needs to understand that the venture provides a service with an added value from which the consumer can also benefit. A clear differentiation from the competition can help to give the consumer the feeling that only the product / service from the venture is the best option.

 

B2C

B2C sales refer to any sales process that sells directly to individual consumers and differs from a B2B sales process in several ways.

B2C often has…

  • lower price points.

B2C prices tend to be lower than B2B prices due to the amount of products / services exchanged in the sales process (Economy of scale). B2C sells less products within a contract then B2B.

  • shorter sales cycles.

B2C sales cycles tend to be shorter than B2B sales cycles, partially due to lower prices and lower amounts of products being exchanged.

  • fewer decision-makers.

B2C sales have a limited number of decision-makers (e.g. 1-2) whereas in B2B the sales process oftentimes has to be approved by several decision-makers, meaning that in B2B several individuals can influence the outcome of a deal.

b2b-b2c

In conclusion: Even though both business models are different, they touch in several points.

Both require an efficient sales process and an alignment with the marketing as well as an excellent customer service.

Business acceleration focuses on building efficiency throughout the entire business. Therefore it aims at building an efficient sales process that is aligned with the marketing and customer service.

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