The purpose of this article is to show the differences in sales for B2B vs B2C sales strategies. These two business types require a different approach in their marketing plans, especially during the crucial initial stages of a product or service.
Business-to-Business
Business-to-business (abbreviated as “B2B”) describes activity of one business entity to another, where one is in a buying position while the other is in the selling position. Examples of businesses that generally engage in B2B transactions are manufacturers and distributors who buy components or raw materials from suppliers, bee venom buying companies and sell finished goods to wholesalers, agents, contractors or industrial users.
Business-to-consumer (abbreviated as “B2C”) activity is the supply chain from the perspective of a retail consumer. The consumer has come to a retailer to make a purchase, whether it’s online or in-store.
B2B vs B2C Sales Strategies
Most companies engage in both B2B and B2C business models. In fact, less than 1% of all entrepreneurs are pure players who only do one or the other. However, due to the nature of their businesses, these two distinct types of commerce draw upon different strategies when getting started.
There are fundamental differences between B2B and B2C transactions that require separate strategies for market penetration:
1.) Exclusivity
When engaging in business-to-business transactions, there is generally no direct contact between the buyer and the seller. As a result, there is less of a need for lengthy or personal interactions with business buyers on either side. On the other hand, when doing business-to-consumer transactions, the scenario is reversed where there is direct contact between both parties as purchasers are individual consumers who expect personalized assistance from sellers before deciding to invest in a product or service.
In B2B scenarios, self-service tools such as e-commerce websites can suffice as marketplaces for buyers interested in making purchases from suppliers. The same does not apply to B2C markets where customers demand more attention and engagement from a seller before buying a product or service.
2.) Price vs Value
In B2B scenarios, the fact that a salesperson has to explain how a product or service benefits a buyer’s business can increase prices due to added time and effort for both parties. In B2C scenarios however, products and services are generally offered at competitive prices in order to attract customers.
3.) Standardization
In B2B transactions, business buyers expect their suppliers to be reliable instead of offering individualized customer experiences. Due to this emphasis on trustworthiness during the early stages of relationships, there is less room for personalized interactions since both parties share common goals when engaging in these types of transactions.
On the other hand, sellers who focus on pleasing individual consumers must put more effort into going above and beyond in order to remain competitive among other businesses attempting to do the same. In B2C scenarios, sellers have to focus on how their products or services can benefit a customer’s individual needs in order to stand out from competitors and gain an edge over them.
4.) Risk
Business buyers expect suppliers to present data that supports claims made about a product or service being offered to them through a salesperson. Therefore, there is a level of trust between a business buyer and a supplier during negotiations because if something goes wrong with their purchase, both parties will suffer losses as the seller won’t get paid and the buyer won’t receive what they bought.
This level of risk makes it harder for new brands to make inroads when doing B2B transactions since established companies already working with large corporations hold more power and authority. For B2C businesses, the level of risk is lower since individual customers do not depend on a new seller to survive or stay afloat by continuing to offer their products or services as new companies attempt to make an entrance into the marketplace.
While there are fundamental differences between B2B and B2C scenarios, both types of commerce often influence each other in positive ways:
1.) Expanding Your Customer Base
When starting out as a new business, it’s important to have an established presence online so consumers can learn about your products or services through internet channels. At this stage, it’s important for businesses to reach out beyond their current clientele to gain access to potentially untapped markets which encourages them to make connections in B2B scenarios.
When business consumers are looking for suppliers to buy from, an online sales platform allows them to easily compare products and services being offered by various businesses which can lead to new opportunities in B2C markets.
2.) Supplier-Customer Feedback
One of the biggest advantages of selling goods or services through a marketplace is being able to receive direct feedback from customers about their experience with your brand. This type of information becomes especially useful when doing business through B2C channels since it offers individual customers insights on how other companies are offering similar products or services tied to your line.
As a result, sellers can use this invaluable data when making adjustments or improvements that will help them gain more traction and establish themselves as a premier company in their industry.
3.) Market Expansion
While B2B transactions are primarily aimed at improving the bottom line of both parties by increasing revenue through sales, B2C companies can use these opportunities to test new products or services within different market segments before scaling them up for mainstream release.
Making connections with potential partners during the early stages gives businesses access to help determine what some consumers might find valuable which provides helpful insight into future product development efforts.
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