7 Differences B2B vs. B2C Marketing
Posted by Robert Hennessey on Mon, Jun 20, 2011
B2B versus B2C marketing comparisons are important to understand when choosing the most effective marketing approach for your small business. Many of us really do not think about the differences between B2B Versus B2C Marketing. Not understanding and realizing these differences could cause you to waste a lot of time and money in your small business marketing decisions.
Here are seven differences to compare b2b versus b2c marketing attributes and their differences affecting small business marketing.
1 - Size of B2B vs. B2C Markets
B2B markets are generally small vertical markets, often niche in size, comprised of a few thousand sales prospects to maybe as large as 100,000 prospects.
B2C markets that are typically large broad markets of tens to thousands to millions of sales prospects.
Marketing Implication: B2B sales will be fewer in number and cultivating quality prospects, not quantity is extremely important. Unlike B2C where mass-marketing techniques produce many prospects, but these prospects are of low quality and many do not purchase. Mass-market techniques for B2B firms are not likely to be effective and are generally not cost effective.
2 - Purchasing Process:
B2B sales typically have a purchasing process defined in months and the sale is complex and requires consultative selling taking additional months to complete.
B2C sales have short purchasing periods of anywhere from a few minutes (the impulse buy), to a few days and is a simple sale consummated immediately.
Marketing Implication: A lengthy purchase process of understanding client needs requires building trust with your client to assure them that your product/service is best for their needs. Unlike the B2C purchase, process driven by immediate impulse buying based on emotional want and price.
3 - Sales Process:
B2B sales require customer centric consultative selling (selling based on understanding a client's needs and developing a relationship of trust) sometimes from a two-step sales organization including the seller’s sales force and a distribution sales force.
B2C sales are usually direct to the consumer or involve a retailer (one-step). The sales approach is a traditional product sell of "convincing the consumer" they have to have the product or service being sold.
Marketing Implication: A consultative B2B sales process requires more emphasis on building rapport and trust with often more than one decision maker over many months of the sales process assuring the buyer that they are making the best rational decision.
4 - Cost of a Sale:
B2B sales are "higher ticket" purchases usually costing from just a few thousand dollars to tens of millions of dollars.
B2C sales can range in cost from a dollar to a few thousand dollars, except, for cars and homes.
Marketing Implication: B2B sales are going to be fewer in number but with a higher return on investment from a marketing investment standpoint. B2C sales are many with smaller profit and typically with less return on investment.
5 - Purchase Decision:
In B2B sales need and budgets, generally drive the purchase decision.
In B2C, sales purchase decisions are more emotional based on want more than need or a budget.
Marketing Implication: In approaching B2B, buyers use a rationale sales approach and many facts to support of your presentations. Leave out the fluff.
6-The Value of Brand:
In B2B markets reputation, personal relationships and consultative selling build brand identity.
In B2C markets, advertising is primarily the builder of brand identity.
Marketing Implication: The Internet is changing the approach to brand identity building for both B2B and B2C. Outbound advertising that was never affordable to small B2B businesses and the mainstay of B2C marketing is taking a backseat to inbound marketing approaches like social media now playing a bigger role in both B2B and B2C brand building.
7-Lifetime Customer Value:
The lifetime value of a B2B customer is much higher due to the higher cost of sales and the likelihood of repeat or add-on sales to the same customer.
The lifetime value of a B2C customer is lower than B2B because of the lower cost of an individual sale and repeat sales are generally fewer.
Marketing Implication: Looking at your marketing as a long-term investment in your sales and small business company growth is essential. It affects every aspect about how you go about making smart marketing decisions. Even B2C firms are moving to invest more in marketing that will produce a better lifetime customer value.
Takeaway
Understanding the differences in B2B versus B2C marketing are crucial to your marketing strategy and tactics. Knowing your target audience, developing an appropriate b2b Marketing Message, and the distribution methods of your communications messages are different, if you are a B2B versus B2C Company. Using big business consumer marketing tactics are not cost effective and are not likely to produce the new business-to-business clients you seek.
