Ever wondered what the difference was between B2B and B2C business models? A B2B, or “business-to-business,” company provides services or products to other businesses. A B2C, or “business-to-consumer,” company sells products or services directly to individual consumers. Both are two different business models that serve different types of consumers but no model is better than the other as they both have their own pros and cons. The model that best suits your business is determined by your goals, infrastructure, and industry.
Read more to find out what’s the best model for your business and the differences between B2B and B2C marketing. Let’s break it down!
What is B2B and B2C with Examples
If you are still confused about the differences between B2B and B2C business models, here are some examples to help.
Let’s say you are an online retailer that sells office furniture. That would be considered a B2B since its primary target market is other businesses. B2B businesses in eCommerce also facilitate transactions between wholesalers and retailers or manufacturers and wholesalers and is typically a more complex process.
On the other hand, if you were to book a pet hotel for a dog or buy some sunglasses online that would be considered a B2C since you are making a direct transaction with the company. This is typically a model people are most familiar with.
9 Differences Between B2B and B2C Marketing
1. User groups vs. individual buyer
B2B businesses tend to market toward a group of stakeholders in order to make one sale. This can include product users, IT staff and managers, executives, and retailers. Think of a committee trying to decide which ad subscription to buy.
B2C businesses tend to market and sell to at least one individual buyer. Think of a person using a travel agent to plan a trip.
2. Detailed information vs. broad description
B2B businesses tend to need to create detailed and longer descriptions for their customers. Their customers usually need to be well informed on what they are buying and how they benefit from the purchase decision.
B2C businesses tend to create short and broad descriptions since they are selling directly to the individual and not for.
3. Rational vs. emotional
B2B businesses have to be more rational with their messaging since purchase decisions tend to be more planned and logical with a specific return on investment in mind. Customers will usually expect to see the use of industry or business-related jargon.
B2C businesses can utilize more emotional messaging since their purchase decisions tend to be more spontaneous and customers will usually expect to see more fun and personal content. They can choose to either include or avoid using industry jargon, but if so, some will tend to keep it light so that it remains relatable to the everyday person.
4. Pricing models
B2B businesses usually offer multiple levels of discounted prices based on quantities and frequencies of orders. Their payments are also more varied since they are usually made via net 30 terms.
B2C businesses offer a single tier of pricing for all customers that are only affected by sales and discounts.
5. Large scale vs. personal use
B2B businesses market to people that need to buy products or services for a mass amount of people.
B2C businesses market to more personal buyers such as themselves, family, or friends.
6. Longer sales cycle vs. shorter sales cycle
B2B businesses tend to have longer sales cycles and therefore need to nurture over a longer period of time before a sale is made.
B2C businesses have a much more immediate sales cycle since sales may tend to be made at the first interaction.
7. Customer Service vs. Account Management
B2B companies use customer support representatives to respond to common questions or issues.
B2C companies use account managers who bring in new wholesale customers and are regularly in contact with them to increase sales and assist with questions.
8. Longer customer relationships vs. shorter customer relationships
B2B businesses tend to have longer customer relationships as the first transaction a company makes with a customer is usually the first of many.
B2C businesses usually have a shorter customer relationship with clients that are less loyal. Customers tend to be more one-time buyers but that is not always the case.
9. Higher acquisition costs vs. lower acquisition costs
B2B businesses usually have higher acquisition costs since they are justified by their higher prices.
B2C businesses tend to have lower acquisition costs since go along with their lower prices.