What makes B2B & B2C almost similar yet different?

“Selling is selling! Right?”, but wait a moment, then why is it so difficult and complex?

Selling to business is completely different than selling to any consumer. Marketing involves a broad spectrum of activities, whose ultimate goal is sales. B2B and B2C are the two business marketing models where sales are the end-result, but this doesn’t make the two business models the same. Understanding the nuances of each is fundamental to effectively marketing your products or services in the B2B or B2C worlds.

Most of the time, B2B marketing focuses on logical process-driven purchasing decisions, while B2C focuses on emotion-driven purchasing decisions.

The B2B and B2C business models sound similar but they are worlds apart when you Inspect them closely.

Here are eight (8) Key factors to take into consideration when building a channel (B2C vs B2B) selling strategy, and selecting the right systems/processes:

1. Product & Process Complexity: The unique Differentiator

Consumers buy products or services for personal use. Business buyers purchase products or services for use in their companies. In B2B-buying, the purchasing process is more complex. Decision making groups include members from technical, business, financial, and operational departments, depending on the type of purchase.

The person selecting a product may not have the authorization to purchase or the responsibility for making the final purchasing decision. A large capital purchase, for example, may require authorization at the Department head or even as high as the board level.

2. Payments Terms: Instant Purchase v.s. Invoicing

In B2C, any two consumers who buy products from you pay the same price. In B2B, price may vary by customer. Customers who agree to place large orders or negotiate special terms pay different prices to other customers. Payment mechanisms also differ.

In B2C transactions, consumers select products and pay for them at the point of sales using payment mechanisms such as credit or debit cards, checks or cash. B2B transactions require a more complex business system. Customers select products, place an order and arrange delivery through an agreed logistics channel. Customers do not pay at the time of the order, but receive an invoice which they settle within agreed payment terms.

3. Approval Processes: Participation from Multiple Stakeholders

With B2B decision-making, there are usually multiple stakeholders within the organisation to agree on a specific purchase. When engaging in B2B marketing, you directly appeal to members of this specific target audience.

On the other hand, B2C involves speaking directly with one or two individuals/direct consumers. So, in B2C, the purchasing process is less complex and needs No approvals. Because of this, such transactions in B2C contexts relies more on building an emotional connection with potential customers.

4. Relationship Length: Emotionally driven vs value driven

Predominantly, B2B has a deeper & longer relationship with clients than in B2C. The B2B market is smaller than B2C; the scale of potential customers in B2B is also narrower than in B2C. B2B businesses need to develop and maintain a strong relationship with their clients to bring in customer loyalty.

In B2C, businesses tend to have shorter relationships with customers, and customers are usually less loyal than in B2B. As a typical example, today, customers may clothe from a brand, and tomorrow they can buy from the other brand and might never make any purchase on that brand.

5. Marketing strategies: Promotional Differentiation

Although methods of advertising, promotions and publicity of B2B and B2C might look similar, the marketing tactics and the way of information presented to the customers is different.

In B2C, advertising in general media like TV, radio or online magazines is usual, but B2B requires help as business customers use their unique avenues that marketing needs to follow. However, at the end of the day, no matter which side of the B2B or B2C spectrum a marketer works on, all marketing is P2P — person to person — despite the external differences.

6. Regular Reordering - One Click Reordering in B2B

One click reordering is a key feature in a B2B environment as it allows the buyer to easily add products from their last order to their cart which saves them time and frustration and ensures the company they are ordering from won’t lose revenue. They frequently already know products by names and SKUs, they want to repeat past orders quickly and efficiently, and they usually need internal approval to order. In B2C, the reorder function is very rare. Most often, a user who wants to buy the same product is forced to add it to the basket again and undergo the procedure of providing personal data and making another payment.

7. Product Catalog: Standalone, Configurations & Bundles

B2B buyers now expect an online shopping experience as seamless as the B2C experience. Hence the best commercial organizations design and launch “packaged” or “bundled” systems and solutions. A digital catalog provides you with new opportunities to innovate and evolve, thereby attracting a new wider customer base, while improving the buying experience for your current customers, and making it even easier for your salespeople to do their jobs—and easier for your business to stay competitive. Many B2B companies introduce Guided Solution Selling models to provide seamless buying experience to ensure low touch or no touch ordering process.  In B2C Commerce, B2C solutions rarely have a minimum order value or the ability to specify how a purchase should be packed by the seller.

8. Automated Quoting Process: An advantage for B2B

B2B customers set the bar high for quoting solutions. Their average orders are larger, and thus more complex, than in B2C and they also expect highly personalized pricing, payment, and shipping conditions. Creating unique quotes for every request like that in a manual way would be a tall order. The amount of potential configurations found in B2B eCommerce clearly calls for a quoting solution that is capable of generating fine-tuned custom quotes. This is where CPQ comes as a distinct class of quoting tools that is highly configurable to include all kinds of data, product selection rules, and business policies when generating a quote. This is enabled with Quote Collaboration features and functionality from CPQ platform.

The chart below summarizes the key differences between B2B and B2C:

Basis for Comparison	B2B	B2C
Meaning	The selling of goods and services between two entities	The selling of goods and services by businesses to the consumer
Customer	Company	End User
Focus on	Relationship	Product
Quantity of merchandise	Large	Small
Relationship	Supplier - Manufacturer Manufacturer - Wholesaler Wholesaler - Retailer	Retailer - Consumer
Relationship horizon	Long Term	Short Term
Buying and Selling Cycle	Lengthy	Short
Buying Decision	Planned and logical, need-based	Emotional, want and desire based
Creation of brand value	Trust and Mutual Relationship	Advertising and Promotion

Go-To-Market (GTM): Your GTM strategy is a key factor that will drive the complexity and sophistication needed behind your processes and pricing of products for the B2C or B2B models.   As your company grows from few to many products, from few to many price/discount structures & catalogues, from Local to regional to global scale or operations with Tax/shipping complexities, Your systems, integration, sales processes, data quality and data analytics maturity will need to exponentially increase.

Depending on the size of the enterprise, whether it is a Seed, Startup, Establishment, Expansion and Matured, the GTM v/s the product sales strategy combines their particular strengths to generate new opportunities for their respective businesses.

Both B2B and B2C business models rely on the products and product lines which are best suited for the profitable offerings. Smaller enterprises work with few product lines/family, but for the large enterprises profits would soar if the sales force concentrated on just a few products. They have multiple product lines consisting of complex solutions and marketing bundles which usually deliver better results than across-the-board ones. Thus, a company makes the greatest profits when its sales force spends its time with the most valuable subset of customers or with the most valuable products in its basket. Hence, the quoting process of the businesses of different sizes differ in the way they operate to bring out the best profits with minimal investments.

The Bottom line: B2B and B2B marketers have distinctive problems
The striking exponential development of eCommerce has made many companies modify their existing B2B and B2C business models. A typical example is Google, it serves both businesses and individual customers.

To combat the pernicious effects of these two business models, marketing leaders must ensure that the members of their marketing teams are regularly exposed to information about the broader aspects of marketing. Also, with the right tools, like RISE on CPQ (https://www.riseoncpq.com/), you can gain complete visibility into your sales channels and increase sales team's productivity for both B2B and B2C models.