B2B Marketing 101: B2B versus B2C
I believe in mastering the basics. Even when you’re already a seasoned expert in your field, the basics tend to be the most important, yet neglected part of your practice. Too many mistakes, disasters and tragedies have occurred – in almost every field – because so-called experts ignored the foundations of their subject matter.
So in the quest for reinstating the basics of B2B marketing, I start this series of B2B Marketing 101 blog posts.
In this first post, I will cover the basic differences between marketing to businesses (B2B Marketing) and marketing to consumers (B2C Marketing). Why? Because I believe that while the principles of marketing are the same, the expression of each discipline in the field (strategies, tactics, channels, etc.) is vastly different due to the fundamental differences between businesses and consumers.
So let’s start with the obvious. Business-to-business marketing (B2B Marketing) “is the practice of organizations facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations.” (Wikipedia) While business-to-consumers marketing (B2C Marketing) is the practice of organizations facilitating the sale of their products or services to individuals for personal use. But more than just the obvious, why are these two practices so different?
4 main differences between B2B and B2C Marketing
As I described above, the buyers in B2B Marketing are other companies or organizations as oppose to B2C Marketing where the buyer is an individual. Because of the complexity of business structure, a buying decision in a business organization typically involves multiple people – the person who did the research is not necessarily the same person who will authorize the purchase nor will it be the same person who will actually use the product. So while you market and sell to consumers you typically deal with just one person, when marketing and selling to businesses you need to convince multiple people to purchase your product or service.
Marketing Impact: From a marketing perspective this is also tricky. Can your message include all the different “personas” involved in the purchase decision even though they sometime have completely different needs? Who do you market to – the user, the influencer, the decision maker?
A contributing factor to the complexity of the purchase cycle is the price. Most consumer products are cheap, making the purchase decision easier since the risk is lower. On the other hand, most business products are expensive and therefore require more due diligence, research and red tape before the purchase is actually made.
Marketing Impact: Pricing is probably one of the most difficult things to do and few can say they mastered the art of pricing. In my personal opinion, it’s about trial and error and A LOT of luck. But the main difference between B2B and B2C is that you have less reference points when it comes to business products since business products are usually less prevalent than consumer products are. When you price a pair of shoes, a book or a menu item in a restaurant, you have some clear reference points – your competitors, other products on the shelf or menu, and other complimentary products. You also get your feedback right away. But with business products and services, your reference points are fewer and sometime even nonexistent. And because the price is so much higher, the range of error in pricing is also wider, making you more prone to pricing mistakes.
By pure logic, there are just more consumers than there are businesses, and there are way more consumer products than there are business products. This, in combination with the high price of business products, makes every deal and every lead very important.
Marketing Impact: Volume determines budget. Marketing budgets in consumer products are extremely higher than they are in business marketing. You don’t see a lot of television commercials for business products. Most above-the-line (mass media) marketing tactics such as television and radio are used primarily for consumer marketing since the volume permits. But in B2B marketing your target audience is smaller so you need to use marketing channels that narrow your focus.
- Sales cycle
The effect of all the factors above makes the sales cycle of B2C shorter than B2B. In B2B, the price is higher, the sale involves multiple people and usually the volume is lower, which in turn makes the sales cycle longer. During the Buyer’s Journey, most consumers are becoming aware of a need (awareness stage), researching a solution (solution search stage) and making a purchase decision (decision stage) in a very short time frame, from seconds to possibly days with some high correlation to the price of the product (as the price goes up the sales cycle gets longer). But with businesses, even if the price isn’t extremely high (in relative terms), because of the multiple people involved in the purchase decision and because of the bureaucracy in business organizations, the sales cycle tend to be much longer that can range from a week to months or even years (commercial airplanes for example).
Marketing Impact: In consumer products, the marketing work is focused on generating awareness and demand for the products and building the brand name. Given the shorter sale cycle most of the marketing work in B2C is before and after the sale and not during it. In B2B Marketing, because the sales cycle can take months, facilitating the sales of the product during the sales cycle become a crucial element of the marketing work.
Sales enablement, like battle cards, sales decks, training on messaging, nurturing during the sales process, are just a few of the things that marketing teams in B2B businesses need to do throughout the entire sales process.
Results: different marketing and sale process
The result of these main differences between B2B and B2C is a completely different marketing and sales process, one that is better suited to meet the buyer needs before, during and after the purchase decision. In my next post I will dive deeper into the B2B Marketing strategies that professional B2B Marketers need to use in order to match the nature of their business.