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Does the B2B distinction matter any more?
Growing numbers of analysts and other pundits seem to say that distinctions such as "B2B" and "B2C" are losing importance and credibility, especially with the increasing consumerization of previously business-centric technology offerings. What do you think about this?
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23 Answers
Hi Michael! If “analysts and other pundits” truly are saying that, then they are flat-out incorrect and the reason has zero to do with technology. Rather, it has to do with the very natures of the two segments, and how they consider and buy. To wit:
Consumer realm
Two parties … the seller and the individual or household
Budget usually is “binary” yes or no
Involves real money
Risk is personal loss and/or dissatisfaction
Business realm
Minimum three parties … the seller, the direct contact(s), and “the company.” In no instance can the direct contact act only on his/her own behalf.
Budget usually is analog: timing, allocation, approval
Involves budget, not real money
Risk is embarrassment or loss of job
People behave quite differently as buyers in the two segments, which mandates appropriate distinctions in marketing and selling behavior toward each. That is why you’ll see big BtoB v. BtoC differences in the ads during the SuperBowl next Sunday.
Disagree. I don't know who's "saying that" but they are wrong. Different social networks are suitable for different messages. a B2B product is often more appropriate on an industry community site or LinkedIn, and maybe on Twitter (depending on the followership) but not on Facebook, gaming networks, or other entertainment-based channels. The goal of marketing is to get more targeted on the right demographic, not broadening focus. Relevance is key in social media conversations.
Agree with Michael Brown - it absolutely matters. Let's keep it simple...
B2C buyers are buying for personal reasons.
B2B buyers are doing their jobs.
There is certainly some degree of commonality in terms of how decisions are made, brands are perceived, etc... - BUT those are entirely different perspectives which lead to very different reasons for choosing to do business with one entity over another.
IMHO.
People are people. Whether their buying for personal or business their still looking for trust and confidence in the brand and the product or service.
However when you market your product or service you may use different channels because you know business buyers may be more likely to see your add on LinkedIn or in the business section of the paper.
People are people and relationships matter, whether it's personal or professional purchases I dont see the difference any more
Good discussion
Cheers
@JustinFlitter
While the margins between B2C and B2B are getting narrower from the point of view of the buyer (there is some survey evidence to support this), I think it worthwhile to confirm that the way marketers try to promote and sell in B2B remains very different to B2C. We do projects for both markets but mostly to B2B - what we find is that the approach you have to take is very different not only in identifying your target audience but in what behaviour they follow.
This is confirmed in broader surveys such as the survey of 1,800 marketers (SilverPop Survey: Exploring the Difference and Similarities of B2C and B2B Marketing tactics) - please see our blog www.webleadsb2b.com/2010/06/it’s-time-we-all-started-using-profiles-for-web-l... for details on this.
So I agree with those above who argue that B2B remains quite different to B2C despite what the analysts might be saying. There are just some obvious differences which include that B2B:
- often involves several decision makers not just one as in B2C
- decision process is often much longer
- the information B2B buyers need often goes much deeper involving face-to-face meetings
- the price of the products are generally much higher
I agree with Michael. Although there are similarities in B2C and B2B, in addition to someone doing their job and working within a budget, there are several players involved on both the buying and selling side, and sales are not made by clicking 'yes' an ad/web page etc. but take place after a series of steps (i.e. testing compatibility, scheduling, volume).
The other key point is that B2B sales usually come in multiples, i.e. selling a component that goes on a car, the seller's aim is to become a key supplier - part of the production line of the buyer. Many of my technology clients are advertising their products as a "onesy" the same as a consumer product because someone said "it's all the same now", and their first complaint to me is "why do my clients only buy one?" Their marketing is completely at odds with their goals.
I agree with Michael and Chris. I would add that in B2C decisions are alot more personal (and therefore emotional) as one is spending their own money, as opposed to B2B where the buyer is spending someone else's money (most of the time). Very different dynamics in my opinion.
I am not the least bit surprised that analysts are saying this. Analysts are people who research and write and they have typically never worked in marketing or sales - they are essentially academics and you have to know how to extrapolate nuggets of information from them. Exactly what sort of product or service are we referring to? If it is printer toner, paper tablets or new carpet for a small business then I guess maybe this is an example where there is no difference. These analysts fail to understand that enterprise software, capital equipment, intellectual property, etc are things that a consumer would never purchase. These are very long sales cycles and involve committees. In the end there is a finance team who's job it is to get the greatest return on the company's assets so they can increase shareholder value - in what dimension is this even remotely similar to B2C?
The trend is partially true, but it conflates all of B2B as one group.
B2B used to imply large ticket items. When your CRM proposal is for a $2M implementation, the dynamics of the sale look like traditional B2B: long process, many decision makers, and careers at stake (rather than immediate cash.) IBM wins because you won't lose your job picking IBM.
In the last decade, B2B technology has fragmented into large and small deals - Software and SaaS, if you will. The SaaS deals look increasingly like B2C: you offer a trial to the potential user, they adopt it in the organization, and it sells itself. You allow companies to buy online via credit card. You trial, purchase and implement your CRM with only a single human conversation.
On the other end, there are large B2B deals. Bespoke software. Complex implementations. Mission critical software. Here, nothing changed: its a long process, with many decision makers, and careers are at stake.
In short, B2B technology is dropping in average deal size, and to compete companies have to develop an e-commerce (or consumerization) strategy. This is enabled by newer technologies to find your prospects. But this is not true for all of B2B.
Yes it does.
But as is often the case, there are more nuances and layers to the question and the answer. That is why fora like this are effective: they capture multiple perspectives.
One of the nuances I have picked up in this discussion is that the context is largely digital/social/online/IT There are many other contexts (operational/logistical/human resources/supply chain) where the answers might be completely different. Context matters.
Another nuance that matters is: there is a difference between motivation and transaction. On the transactional side the truism that "people do business with people, not companies" has been true for years, and is only coming every sharper into focus, whether the context is B2B or B2C.
On the motivation and process side, they are completely different. To provide one example: the concept of discretionary spending. In the end consumer world the purchasing decisions that fall under the rubric of discretionary are vast. When you are a movie theatre chain, you are competing not just against other chains, but against clothing manufacturers and fast food outlets for discretionary dollars.
In B2B, that is completely inverted. As a mine operator, if I need a new piece of equipment to sustain or grow operations, there is almost no discretion. That money must be spent, and it must be spent on that piece of equipment. To stay in business I must spend money. As a consumer I can chose to go out for dinner or not tonight. Those are two very different realities.
Great discussion! Let me try to translate the similarities and differences into something actionable.
MESSAGES: Everyone develops initial preference based on emotional response, whether they are making personal or business purchases. So you must appeal to the individual and their personal priorities (and recognize that business people often have unstated personal interests.)
BUT: While the consumer might or might not bother to rationalize their decision, the business buyer almost always MUST demonstrate tangible (not just perceived) value to the company. So while you can rely exclusively on brand image and emotional response with consumers, you have to message to BOTH the emotional and rational considerations in B2B.
AUDIENCES:
The democratization of smaller, one-off business purchases (e.g. phones, SaaS) is significant in that it provides a B2C-ish entry point and even a good if modest revenue stream. (Also significantly changes the role of IT over time, but that's another discussion altogether.)
Two key implications:
1. Anne correctly points out, you have to recognize that those B2C-like sales are beach heads. If you want a bigger share of wallet, maintenance revenue, long term contracts, etc., you have to shift modes - or more accurately, expand your approach to encompass both - and it's best to recognize that dichotomy from the beginning.
2. The masses may be important, or not. Alex is right that many business sales involve larger numbers of nearly invisible (at first glance) influencers who should not be ignored. Social media and other B2C tactics and channels provide access to them. Appealing to those influencers is how many companies (You Send It comes to mind) have built their B2B business... Apple has more or less been dragged into B2B by those same influencers, by the way. Their real power varies wildly, however. As Clemens and Steven both point out, not all B2B purchases are the same. Bottom line - if your product has a large end-user base within the company, invest in the broad base while still building the relationships with top decision makers. If very few people touch your product, don't bother. There is a significant additional cost of sales to appeal to the masses, so make sure you really need that broad base.
EXECUTION: I love stealing ideas from seemingly unrelated areas because they seem so innovative in a new contest. Find B2C tactics and make them cool, personal B2B ones and visa versa. For example, using “account manager” concept in B2C to increase personal feel (personal shoppers at Nordstroms, named support rep my huge ISP assigned me).
Interested to hear other examples!
Great discussion! Let me try to translate the similarities and differences into something actionable.
MESSAGES: Everyone develops initial preference based on emotional response, whether they are making personal or business purchases. So you must appeal to the individual and their personal priorities (and recognize that business people often have unstated personal interests.)
BUT: While the consumer might or might not bother to rationalize their decision, the business buyer almost always MUST demonstrate tangible (not just perceived) value to the company. So while you can rely exclusively on brand image and emotional response with consumers, you have to message to BOTH the emotional and rational considerations in B2B.
AUDIENCES:
The democratization of smaller, one-off business purchases (e.g. phones, SaaS) is significant in that it provides a B2C-ish entry point and even a good if modest revenue stream. (Also significantly changes the role of IT over time, but that's another discussion altogether.)
Two key implications:
1. Anne correctly points out, you have to recognize that those B2C-like sales are beach heads. If you want a bigger share of wallet, maintenance revenue, long term contracts, etc., you have to shift modes - or more accurately, expand your approach to encompass both - and it's best to recognize that dichotomy from the beginning.
2. The masses may be important, or not. Alex is right that many business sales involve larger numbers of nearly invisible (at first glance) influencers who should not be ignored. Social media and other B2C tactics and channels provide access to them. Appealing to those influencers is how many companies (You Send It comes to mind) have built their B2B business... Apple has more or less been dragged into B2B by those same influencers, by the way. Their real power varies wildly, however. As Clemens and Steven both point out, not all B2B purchases are the same. Bottom line - if your product has a large end-user base within the company, invest in the broad base while still building the relationships with top decision makers. If very few people touch your product, don't bother. There is a significant additional cost of sales to appeal to the masses, so make sure you really need that broad base.
EXECUTION: I love stealing ideas from seemingly unrelated areas because they seem so innovative in a new context. Find B2C tactics and make them cool, personal B2B ones and visa versa. For example, using “account manager” concept in B2C to increase personal feel (personal shoppers at Nordstroms, named support rep my huge ISP assigned me).
Interested to hear other examples of cross-over tactics and how to modify them!
oooooo, this is a cool question.
i think there are still many "old school" thinkers who would say the B2B designation still matters....but now that i reflect on the question... i agree. these are all human transactions now, between real people...
There are many unique aspects between B2B and B2C purchases. First and foremost is the origin of the problem, need and resolution process. Breakdown the question, who owns the problem, who is funding the purchase, who is responsible for the implementation and sustainability of the solution.
This question is far to vague, define the transaction, is it complex, large purchase and who will benefit. B2b transactions such as complex services, i.e. cyber security, this transaction in a b2c environment is dramatically different.
B2b typically involves a diverse team of players regardless of involvement. Stakeholders, shareholders, executive, management, subject experts and staff. I don't see how b2c is this complex.
The only common denominator is the objective to complete a transaction.
The B2B distinction matters in a transaction but not so much more in the actual sales and marketing process.
"Democratization of influence" is a key word here.
Also interesting to see how Todd Schnik got a down vote just because somebody else seem to not like the answer... hmmmm :J
1) We are all customer of somebody else - every day.
2) Social engagement with masses in B2C is no longer different from B2B and here is why:
Old school sales people focus on "decision maker" "budget holder" "key influencer"
New school sales people know that the decision driver are much deeper in a corporation. If you buy a new copy machine 20 - 30 or more people come up with suggestions and they do have a voice. "Old school" don't hear them, don't know them, don't care about them because they never learned how to get there in the first place. "New school" sales people listen to them, know about them and are able to sense an opportunity long before somebody sticks their heads out with a "budget" a "time table" and a "project". Now this requires to think in B2C behavior and pattern. Only the end game is different. But does that even matter?
In other words, the corporate consumer is not very different than the individual consumer.
Axel
http://XeeMe.com/AxelS
One Clear difference between B2B and B2C,
is at the Negotiation Stage of the Buy.
Try a simple test.
Obseve how a B2B buyer (or seller) Negotiates,
then compare it to how they negotiate for a B2C Buy (or Sell).
The differences are substantial!
I often wonder if we’d be more successful at B2B marketing if we thought of it more like B2C. In the end, we’re selling to people, not businesses. People make the decisions, based on a mix of personal interests, professional aspirations, politics, etc.
Yes, there’s value for the business and the end-customers in a B2B decision. But that’s still driven by personalities, individual needs, human translations of a business concept or potential outcome.
And it goes both ways. Nobody likes to get an email from a company. We’d prefer to get an email from a person AT that company. Open rates in emails between the two instances prove this again and again. But in so many cases, we still pretend that a building is selling something to another building. Doesn’t always work too well that way.
The business pays the bill, but it’s people who buy.
While there are certainly fundamental differences between B2B and B2C as it relates to targeting and segmenting potentials buyers, in both cases, a human being is associated with the final buying decision. One could even argue that human interactions are more important in B2B transactions since significant investments are not made by simply responding to an email campaign and filling up an online shopping cart. We can all agree that corporate branding and reputation is important but B2B relationships often fail because there is not enough focus placed on building human-2-human or better yet, brain-2-brain interactions. In this regard, marketers need to focus on building emotional connections with “consumers” of their products and services not simply their associated “business”. Sales and marketing alignment is amply covered in various other blogs but it’s worth noting here that B2B marketers need to spend more time in the field to recognize the human interaction that is necessary in their campaigns and sales support initiatives.
While the margins between B2C and B2B are getting narrower from the point of view of the buyer (there is some survey evidence to support this), I think it worthwhile to confirm that the way marketers try to promote and sell in B2B remains very different to B2C. We do projects for both markets but mostly to B2B - what we find is that the approach you have to take is very different not only in identifying your target audience but in what behaviour they follow.
This is confirmed in broader surveys such as the survey of 1,800 marketers (SilverPop Survey: Exploring the Difference and Similarities of B2C and B2B Marketing tactics) - please see our blog www.webleadsb2b.com/2010/06/it’s-time-we-all-started-using-profiles-for-web-l... for details on this.
So I agree with those above who argue that B2B remains quite different to B2C despite what the analysts might be saying. There are just some obvious differences which include that B2B:
- often involves several decision makers not just one as in B2C
- decision process is often much longer
- the information B2B buyers need often goes much deeper involving face-to-face meetings
- the price of the products are generally much higher
While the margins between B2C and B2B are getting narrower from the point of view of the buyer (there is some survey evidence to support this), I think it worthwhile to confirm that the way marketers try to promote and sell in B2B remains very different to B2C. We do projects for both markets but mostly to B2B - what we find is that the approach you have to take is very different not only in identifying your target audience but in what behaviour they follow.
This is confirmed in broader surveys such as the survey of 1,800 marketers (SilverPop Survey: Exploring the Difference and Similarities of B2C and B2B Marketing tactics) - please see our blog www.webleadsb2b.com/2010/06/it’s-time-we-all-started-using-profiles-for-web-l... for details on this.
So I agree with those above who argue that B2B remains quite different to B2C despite what the analysts might be saying. There are just some obvious differences which include that B2B:
- often involves several decision makers not just one as in B2C
- decision process is often much longer
- the information B2B buyers need often goes much deeper involving face-to-face meetings
- the price of the products are generally much higher
I just wanted to send my apologies - for some reason (other than my battery ran out as I was writing this post) my entry seems to have been entered several times. Sorry.
The process of bying is not the same at all, so we have to destinguesh between B2B and B2C. The decision makers in B2B are very hard to access, you can't rich them by affilation compaign or blog. You have to use other B2B marketing tools to get their contats (specially emails) like webinars, email marketing, telemarketing,...
I am new to this Forum, but this topic is appealing. I am getting to see the other side of the coin. thanks for contributing to the forum
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