In the world of marketing, the nature of your message depends on the type of company that you are. While companies exist across a variety of industries and sizes, they also primarily differ based on the group that they serve. Business-to-business (B2B) and business-to-consumer (B2C) models are the main avenues companies use to reach a target audience and sustain profitability. In B2B models, the end “customer” is another business/entity, while in B2C models, the end “customer” is an actual individual in some kind of commercial setting. In this blog, we will identify more key differences between the two identities and give tips on how to effectively market your business based on your customers’ wants and needs.
B2B and B2C: The Fundamental Differences
Understanding whether your company operates as a B2B or B2C is crucial to creating successful and relevant marketing campaigns. B2B companies provide solutions for other businesses. They solve a problem, improve efficiency, cut costs, or make operations easier through diversified portfolios of products and services. One of the most significant changes in the B2B market recently is the shift to e-commerce. This market size was valued at $6.64 trillion in 2020, and is expected to grow 18.7% annually through 2028. B2C companies, on the other hand, provide value to the “typical” consumer, either in brick and mortar or online settings. Their products and services aim to improve people’s lives in one shape or another. Following the same trend, the global B2C e-commerce market is expected to reach a value of $7.65 trillion by 2028. Whether your company plans on exploiting this upcoming surge of online sales, understanding the important differences between B2B and B2C can yield an efficient, sustained marketing strategy.
Examples of Each Type of Company
- Asana (project management tool)
- Slack (for web communication)
- SnapCap (quick and easy loans for small businesses)
- Home Depot
The Impact of Identity on Marketing
As a general rule of thumb, B2B transactions tend to be more logic-based than B2C transactions. When a company weighs reducing net profits for the end customers’ perceived value, management wants to ensure this investment is worthwhile. While marketing your B2B company, it is essential to include large amounts of data that supports why your product is worth more than your direct competitors. For example:
- What does your industry look like right now?
- What are your clear-cut advantages, in terms of value and price?
- Do you expect sales to increase or decrease?
- Can you explain these possible trends?
As evident through these direct questions, B2B marketing should be very focused on your company’s core competencies, differentiating factors, and long-term value to your customer base. Since there is a wide variety of B2B products and services, customer retention is oftentimes valued over customer acquisition, which drives repeat purchases and predictable revenue inflows.
B2C sales are oftentimes tied with customer emotion at the point of purchase. Consumers want to be sure that whatever your company is selling them will make them happier than if they were to be without it. While price sensitivity is a relevant customer segmentation characteristic, customers in B2C settings are not overly focused on analyzing purchases to evaluate the return on their investment. These customers are individuals going through everyday life, with a desire for an appealing offering; B2C settings often see much higher purchase volume than B2B settings. If your B2C marketing campaign cannot evoke emotions that induce desire for a product, your company may lose the first step in value capturing. As human beings, emotions can be just as important, if not more so, than what the numbers say about a purchase.
While B2B and B2C models and operations can be completely different, each of them has important guidelines that every business owner should keep in mind when they are trying to close a deal. It is very important to maintain more hands-on interactions with a B2B buyer; they should look like the experts. Understanding your company’s position in the industry is key to promoting your offerings, value, and reliability to customers. Answering key questions about your identity before they are asked by customers will help your chances of boosting sales.
In the B2C realm, you must show that you are more loyal to the customer than they are to you. With the emergence of online platforms and retailers, along with the continuing COVID-19 pandemic, customers now have more options than ever at their fingertips. Not only do consumers want their solution immediately, but they want it at the lowest price and highest quality. As the supplier of their needs, you must be able to showcase you are willing to conform to these demands.
Written by Michael Mainella and Shravan Kumar