B2B or B2C - What's the difference and why should I care?
Business to business (B2B) or Business to Consumer (B2C), it's just selling and marketing to one person, isn't it? With B2C it's selling and marketing to the person who picks the product off the shelf or clicks the link on a webpage. With B2B, its selling to the buyer who gives you a purchase order, isn't it? To be successful you must understand two critical differences between B2B and B2C.
1. In B2B there is more than one person involved in a purchase
With B2C you focus on the consumer: the one person who can say yes and buy. For efficiency, companies don't really focus on one person, but focus on groups of similar people that marketers call segments. Crucially, each consumer in the large groups of people can say yes.
In contrast for B2B, one person will not independently say yes. I know buyers tell you they can say yes, and there is no need to talk to anyone else, but this is only true if you are a commodity product. In B2B, you must influence a group of people, but not like in B2C a group of similar people, in B2B a group of different people. Marketing books sometimes talk about the buying centre: individuals who need to be involved in the buying decision process.
At Gordian we talk about five different buying styles: Decision maker, influencer, recommender, gatekeeper and user. A decision maker can say yes for this purchase and is accountable for the results of the purchase. An influencer can influence the decision because of their experience or relationship (power in the organisation). A recommender recommends a purchase using their technical knowledge of standards and specifications (e.g. purchasing, engineering, accounting, legal). A Gatekeeper usually has the ability to say no, but not yes. For example, they can reject suppliers or reject contract terms. Lastly, users are those who regularly use your product or service.
The essential point to remember is: one person cannot say yes. Could you get to a decision maker and get them to say yes without involving others? You could, but the other four groups will spend the duration of the contract showing the decision maker how they made the wrong choice. They will spend the duration of the contract finding faults with your product and service. To be effective and build relationships for sustainable sales, ensure you are ready to persuade a group of different people with different interests.
2. In B2B you are a long way from the consumer
The next critical difference is your distance from the consumer. In B2C, to be successful you need to be close to the consumer. You must have deep consumer insights. In B2B, you sell to a customer who sells to their customers. Commonly, suppliers show little interest in their customer’s customer because “It’s none of my business”.
However, taking this approach guarantees that your customer will see you on the cost-side of the profit and loss statement. And we know what customers do to costs. Yes, find ways to reduce costs. In contrast, if you choose to be interested in your customer’s customer then your customer will see you on the revenue-side of the profit and loss statement. How can you do this? Bring your customer ideas and insights into how they can sell more to their customers. Bring your customer ideas and insights into how they can help their customers be more effective.
Why bother trying to be seen as a contributor to your customer’s revenue? Well, just like we know what customers want to do with costs, we know what customers want to do with revenue: grow it. In many industries suppliers have discovered that they grow much faster when they get deep insights into their customer’s customers and help their customers to grow faster.
In summary, you should care about these two critical differences. Why? Because if you do then you will grow much faster.