The question of what exactly the acronym B2B stands for is common, especially for those who are less experienced in sales. On the other hand, more experienced B2B marketers and salespeople are less interested in definitions, but rather in strategies and methods to help them reach their target audience.
In principle, a thorough analysis of your target audience is the foundation for the optimal alignment of sales and marketing. However, the ongoing digital revolution presents challenges, even for established B2B companies. In this article, we provide a B2B definition, explain the specifics of the business model, and offer some tips for successful B2B marketing.
The acronym B2B stands for “business-to-business.” When a company has a commercial relationship with at least one other company, it is described as B2B. This relationship can include delivering both goods and services. The key aspect of B2B is that two or more companies come into contact with each other, which clearly distinguishes it from B2C (business-to-customer) – a business relationship between a company and private consumers.
The acronym B2B (business-to-business) describes commercial relationships between two or more companies. This is distinct from commercial relationships with direct consumer contact – B2C (business-to-customer).
The world’s largest business consultancy – IBM (International Business Machines) – provides a prime example of successful B2B. The company supports a total of 20 different industries with its products and services, from strategy consulting to supply chain management and customer relations management. This generates around half of its total revenue.
Unlike B2B, B2C (business-to-customer) refers to business relations between companies and end consumers. That is, a product or service is offered directly to the consumer by a company. Supermarkets, tourism firms, hairdressers, and all other companies who don’t specifically cater to other businesses, are all good examples of B2C.
The fact that the target markets for B2B and B2C are often very different has a significant impact on marketing and product design. Below is an overview of the differences between B2B and B2C.
| B2B | B2C | |
|---|---|---|
| Products | Often non-standard or niche products, products cater to the individual needs of the customer and usually require more consultation | Often mass produced products, products are normally for personal use or consumption |
| Customer expertise | Potential customers have a strong expertise, business partners are well-informed about current products, prices, and competitors, thorough counseling and support is crucial | Customers don’t usually have industry-specific knowledge, prices and offers can be compared easily and transparently, but the customer doesn’t always have access to current market conditions |
| Customer relationship | Direct customer contact is vital for creating a long-term and personal relationship | Well-functioning customer relationship management (CRM) is vital for effective relationship building |
| Purchase process | Multiple employees are actively involved in the decision-making process, complex multilevel purchase process | Purchase decisions are mainly emotional, purchase process is often done at short notice |
| Transaction volume | High transaction value, relatively low number of sales | Mostly small transaction value (exceptions: luxury goods, automotive industry, and real estate), high number of sales |
When it comes to a successful business relationship, business customers and private end users have different expectations. B2B customers have a high level of expertise due to their industry involvement, and they expect a similar level of industry and product knowledge from a business partner. Furthermore, having a permanent contract and a strong, sustainable relationship with customers is even more important in B2B than in B2C. After all, most of the time B2B involves dealing with individual employees who are responsible for their entire company’s purchases. As a general rule, an individual B2B customer tends to generate much more revenue than a B2C customer.
If you want to meet the expectations of a business customer, you have to coordinate the B2B processes with all relevant departments of their company. This may include sales, customer support, and marketing.
The quotation management and the distribution of products or services are the responsibility of the sales team. After completing a sale, it’s crucial to deliver the goods quickly and error-free, or to provide your service without any complications. The principles of B2B and B2C are similar up to this point. However, unlike in B2C, B2B salespeople must have an extensive and intimate knowledge of the product or service to meet customer expectation. In addition, different soft skills are required for customer acquisition. While B2C aims to quickly establish many customer relationships, the focus of B2B is on developing stability and loyalty in individual customer relationships viapersonal contact.
A B2B sales representative has to prepare themselves specifically for their contact person, get a sense of their needs, and communicate with them eye-to-eye. Ideally, they will cooperate with the same contact for years to come. In contrast, the larger number of customers involved in B2C tends to make this individual approach impractical. Being able to deal with frequently asked questions is therefore more important for B2C sales representatives.
Effective customer support is another key requirement for a fruitful and lasting business-to-business relationship. Due to their complexity, B2B products and services normally require comprehensive consulting services to support them. The supplier’s customer support staff must be able to answer any questions the customer may have about the product or service. Since the staff will have to deal with industry experts, they should also be prepared to provide answers to complex questions quickly and competently.
B2B marketing includes all marketing activities that have a positive effect on the commercial relationship between two companies. Its aim is to develop a foundation of trust and to strengthen the loyalty of the customer. Compared to B2C marketing, which is broader and relatively impersonal, B2B marketing is focused more directly on the customer.
Successfully implementing B2B marketing requires a rethink, because the best way to address business customers and private customers is different. Spontaneous and emotionally-driven purchases are rare in B2B, since customers only make a purchase when a specific need arises.
B2B and B2C marketing both require similar basic marketing tools, including a professional and presentable website, targeted e-mail marketing campaigns, social media marketing, and content marketing. However, the challenge of B2B marketing is to focus these marketing measures on a specific target group of business customers.
The digital revolution is also driving change within B2B marketing. To prepare and react to these changes effectively, it’s important to identify emerging trends.
Commercial relationships between businesses are not a new phenomenon, but the continuing growth of digitalization means that processes need to be rethought and adapted. An individualized approach to B2B marketing is a key factor for success, improving your ability to compete in the market. In this sense, clearly defining a target audience brings many advantages to your business. In terms of marketing to business customers, it pays to remember that, unlike in B2C, you are dealing with experts who tend to purchase based on specific needs and tangible benefits, rather than on emotion.
“B2C“ stands for “Business-to-Consumer” and refers to business relationships between companies and consumers. For example, when customers place an order in an online store, they enter into a business relationship with the respective company. The company enters into a communication relationship with their customers by sending an order confirmation, a newsletter, or recommendations for further...
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