B2B vs. B2C: Definiton, Differences, Examples
Starting a business requires astute planning and decision making. It’s a process that involves choosing the type of products to sell, services to offer, customers to target, and business model to run.
Companies need to make a careful selection of the type of model that suits their brand. The B2B (business-to-business) and B2C (business-to-consumer) models are the most common and widely used.
However, before determining which model is good for your brand, it’s important to know what each model is and what sets them apart.
In this article, you will get comprehensive details about what B2B and B2C mean, their differences and similarities, and why you should choose one over the other.
What Is B2B & B2C?
Before deciding on the type of business model to venture in, it’s important to know what B2B and B2C marketing mean.
What is B2B?
B2B is an acronym for business-to-business, and it is simply the buying and selling of goods and services between companies.
It involves transactions between a company selling directly to other companies. A manufacturer can sell directly to other manufacturers, wholesalers, or even retailers. For instance, a manufacturer that markets table management software for restaurants, or an interior design company that sells office chairs.
Example of B2B Companies
Here are examples of B2B business models.
Microsoft is one of the biggest and most successful B2B companies around the world. The company was founded in 1975 and has contributed immensely to the advancement of technology worldwide. According to a 2017 report by BrandZ, Microsoft was ranked 20th on a global list of the top 100 most valuable B2B brands.
The company offers businesses worldwide with superb technological solutions like Microsoft Dynamics 365, Microsoft Advertising, Data Platform, Microsoft Azure, and so on.
MailChimp is regarded as the biggest and best marketing automation platform in the world. It is used by millions of businesses worldwide, from small stores to larger ones, and it helps to reach target audiences and keeps visitors engaged.
Email marketing is an effective way of generating revenues from responsive customers, and MailChimp ensures companies maximize their profits from emails sent to their customers as it helps brands create a marketing campaign that suits what the products they sell and services provided.
Salesforce is a B2B company best known for providing customer relationship management (CRM) solutions to other businesses around the globe. CRM helps businesses store personal details of customers like their name, address, and telephone number. It allows brands to keep track of website activities like customer visits, clicks, impressions, and so on.
Salesforce is a perfect platform for centralizing the sales process of any brand. It keeps businesses updated about how customers interact with their products or services, and gives insights and recommendations on how to satisfy customers.
B2C is an acronym for business-to-consumer, and it is simply the marketing and selling of goods and services to consumers.
It is a business model where the target audiences are the final consumers. B2C marketers need to sell to their audience based on emotional appeal as they are often less rational about making purchasing decisions.
A manufacturer does not need to sell to other manufacturers or retailers but rather to the final consumers directly. Examples of such is a real estate agency selling properties to people, a phone brand, or a social media company.
Example of B2С Companies
Here are examples of B2С business models.
Amazon is one of the largest and most successful B2C eсommerce platforms in the world. The brand is extremely popular and provides a variety of products for buyers of different ages and genders worldwide.
Amazon sells over 350 million products in its marketplace and these products range from books to fashion apparels, electronics, art decors, and so on.
With over 310 million active users worldwide, Amazon is top of the bar in the eCommerce market and it is reported to have about 89.9% of electronics market share. A survey by CNBC also indicated that people search for products more on Amazon than Google.
Airbnb is the perfect platform for travelers. It offers places, accommodations, and unforgettable experiences for people going on trips.
Founded in 2008, Airbnb has evolved greatly and now has over 6 million houses, flats, and rooms across 81,000 cities worldwide.
It also allows interested individuals to become suppliers through its extensive affiliate network, creating employment opportunities for people around the world.
Facebook, recently rebranded to Meta, is the most popular social media platform with over 2.4 billion active users. The brand also uses the B2C model as it is simply a platform where people create stories, make new friends, upload pictures, make comments, and interact with diverse users around the world.
Facebook is also an ideal platform for marketing and reaching target audiences. With the vast number of users, brands can reach more prospects when they advertise on it. Facebook allows companies to maximize their reach potential via its Meta Business Suite platform. It is an effective marketing feature designed to generate more leads and sales for companies.
Similarities Between B2B and B2C
The two models are different but there are some notable similarities between the pair.
Here are the similarities between the two marketing models.
Nowadays, there is a great similarity in the expectation of emotional reward and quality from brands by their clients.
B2B marketers and B2C marketers now adopt similar marketing strategies to engage their consumers. Buyers can make research about the products or services they want via phones, tablets, or computers, as both models adopt this type of marketing strategy.
Brand awareness and market penetration are important factors any company must consider in order to grow bigger.
Brands must be aware of the changes and current trends in the industry in order to keep up. Companies need to emulate their competitors so as to prevent their clients from moving away.
Whether a company markets using the B2B or B2C model, they must be aware of the innovations in the industry and must endeavour to not miss out on the trends.
In both business-to-business and business-to-consumer marketing, brand fit is considered an effective content marketing strategy.
Companies need to make a careful selection of the type of brands they partner with or the set of customers to target. The culture of a company must be preserved and this can be achieved by ensuring employees, vendors, suppliers, and consumers match the policies of your brand.
Also, whatever product you sell or services you provide, keeping your clients happy by matching their needs is key.
Customers have the final say in any business dealings and companies know this.
Customers make purchasing decisions based on several factors such as their household size, their career type, their budget size, and others. Brands have to engineer ways to appeal to their decision-making audience in order to satisfy them and make revenues.
Regardless of the type of model a company focuses on, providing what the target audiences desire is very crucial to their marketing campaign.
A B2B company selling to other businesses needs to show them the benefits of the products or services it sells. This helps the company build a trustworthy reputation which in turn leads to a boost in sales.
Likewise, B2C companies have to show their consumers the benefits of the products they sell and services they provide. Present clients with better looking and useful products as well as mouth watering services, and watch your sales skyrocket.
Key Differences Between B2B and B2C eCommerce
There are many differences between B2B and B2C. The pair of ecommerce models differ in the following aspects.
Buyer intent and decision making process
There is a huge difference in the intent of business buyers and the decision-making process in B2C and B2B. B2B tends to have a longer decision-making process compared to B2C. The buyers in each model have to be convinced before they make purchasing decisions.
In the B2B market, there are multiple decision-makers involved in the purchasing process and this makes the B2B marketing process more complicated compared to B2C. Marketers in B2B need to target the personas/ decision-making groups who influence the buying decision of their brand. For instance, if a B2B marketer is a supplier of car parts, the marketer has to target the engineers and sales team of a car manufacturing company because they have a major influence on the decision making.
On the other hand, the decision-making process in the B2C market is much simpler. Marketers only need to make an emotional connection with their buyers as it's a personal purchase. Once B2C buyers see a product with an emotional appeal, they instantly make the decision to purchase the product.
Another main difference between B2C and B2B is the set of audience they target.
B2C marketers only target people who can make use of their products or people who need their services. They can direct their marketing campaign to just about anyone or more specifically the decision maker in a household. For instance, if a kid sees an advert for a game and wants to get it, he has to tell his parents to get the game for him. Hence, the parents are the decision makers and need to be targeted as well as the kid.
B2B marketers don’t need to direct their marketing to just anyone, they need to target the major decision makers in an organization. There are lots of organizations they target ranging from SMEs (Small and Medium firms) to larger firms, but the target audience remain the key decision makers in the organization rather than everyone in the firm. For instance, a manufacturer selling medical software to clinics and hospitals will target only the top bosses who make the purchasing decisions.
Marketing strategies and content
There are lots of similarities in the type of marketing of both industries. Both models use similar mediums for advertising and promoting their products. However, there is a difference in the content marketing and tactics employed by each model.
In B2B, the buyers often make purchases based on the benefit the product or service will provide for their organization. B2B marketers know they only need to convince the decision makers, so they ensure the content of their marketing plan is educative and concise. When decision makers have enough details about a manufacturer’s product they can easily make purchasing decisions.
In B2C, the buyers also purchase products they will derive benefits from but they tend to make decisions based on how a marketer presents the product. B2C buyers are more emotional inclined, therefore, the marketing strategy and content needs to be appealing. For instance, a company selling toothpastes can run adverts on tvs, radios, and newspapers to create brand awareness and facilitate the decision of the end consumer.
Customer life cycle
The buying cycle in B2C is faster than B2B because B2C sells directly to the end users rather than other brands.
B2C purchase decision processes mostly take a matter of minutes as they are usually made by one person. When B2C buyers have enough trust in a manufacturer’s product they are prompted to buy the product. A B2C marketer only needs to build a trustworthy reputation to convince its buyers.
The B2B buying cycle has a longer chain. Before a purchase is made, several heads of departments in organizations have to give a go-ahead. The process is often complicated and time consuming as there are multiple decision makers involved. The company employees can’t make decisions on their own but require authorization from the decision makers. B2B marketers have to take their time in creating awareness followed by lead nurturing, engagement, and conversion of leads to buying clients. All these have to be in place before sales are made.
Return on investment
B2C customers purchase products and acquire services to satisfy their needs or quench their desires, they don’t necessarily buy from manufacturers in order to make profits. Most B2C products, if not all, are geared towards satisfying the demands of the target audience rather than generating revenues for their users. They prefer getting discounts on sales price of products rather than its durability.
Unlike the B2C market, B2B buyers are more purpose driven and they only purchase products that contribute to their productivity and profitability. They optimize their manufacturing process and operation systems by buying software and technological products from B2B marketers.
B2B buyers make purchase decisions when they know the product will improve their efficiency and anchor an increase in ROI (Return on Investment).
Relationship with customers
B2B brands have a much deeper bond with their clients compared to B2C ones. This is due to the fact that the B2B market is smaller and has a narrower scale of target customers.
B2B clients are companies rather than individual users making it very competitive to generate leads in the industry. A B2B brand needs to build a long term relationship with clients by providing them quality products and services.
The B2C market has a somewhat shorter relationship with its customers. The bond between B2C brands and their clients is fictitious so they aren’t loyal as they have lots of alternatives and they usually make one-off transactions. For instance, there are lots of cloth designers out there, if an individual wants to get designer shirts from any store, the person might be willing to buy from a certain brand but can change his decision if he sees other alternatives with better designs.
Cost of promoting and marketing products between the pair of ecommerce models also differs.
B2B marketing is a long chain process which attracts huge costs to attract clients. The clients are usually a small group of decision makers in an organization, so B2B marketers have to spend a lot of money on content marketing and strategies that will convince the decision makers.
B2C buyers on the other hand make purchasing decisions individually without the need for third parties. In other words, marketers don’t have to worry about convincing any group of decision makers but rather make the products they sell emotionally appealing to their buyers.
Comparing B2B and B2C Marketting Channels
There are numerous marketing channels that can be used in promoting a brand regardless of the type of model operated.
Check out the examples of B2B marketing channels and B2C marketing channels below.
Ads are important in marketing as they help create awareness.
A good example of a B2B ad is that of KPMG and SAP setting up ads at airport baggage spots. The ads will help the companies reach most, if not all, flight passengers.
An example of a B2C ad using the same airport as a reference; there are duty-free shops after the spot for security checks for departures. At that spot, there are usually new model cars displayed on the stage.
Affiliate marketing enables companies to boost sales by giving commission of sale’s price to people who promote and sell their products or services.
B2B companies who use affiliate marketing are often website hosting companies. They offer people options to share a tracked link to clients, and the affiliate partner gets a commission when a client gets a hosting through their link.
In B2C , some companies also use this strategy. Amazon, for instance, has a PartnerNet feature that allows people to link their website or blogs to products sold on Amazon. Then, they make commissions on every sale recorded.
Communities and forums
Communities and forums are often overlooked by brands but they can be extremely useful. Potential buyers can make enquiries about a brand and its product on community platforms and that might just be the reason they buy the company’s product.
A good example of a B2B community is Salesforce Trailblazer. It’s a powerful community which has contributed to the popularity and growth of Salesforce.
For B2C, some companies set up meetup groups for their clients. These groups are created to attract more people to join and they might end up buying products from the companies.
Content marketing is just as important as running ads. Brands use content marketing to educate potential buyers about their products and services, and this positively influences their decision to make purchases.
B2B brands make use of blogs, videos, webinars, ebooks, and landing pages to promote their products and services.
B2C brands also make use of content marketing platforms like blogs, one-page websites, Youtube, and others. An example is the video Mercedes-Benz published on their Youtube channel, it’s a Bertha Benz video and has attracted over 5 million views.
In recent times, email marketing is widely used due to its efficiency.
B2B brands send out cold emails (emails sent to people who haven’t heard of a product or service before) to potential buyers, and it’s very effective in turning them into paying clients.
B2C brands also use cold emails together with newsletters to engage their prospects.
Events and trade shows
Setting up trade shows and events for partners and clients is another efficient way for brands to grow bigger.
Smaller B2B brands can join trade shows for just a few thousand of dollars for a start. Then, when the brands are big enough, they can start hosting their own trade shows and events.
Lots of B2C brands also host trade shows and events for their audience. They use this medium to make their business partners and suppliers meet. This helps to improve the relationship between the partners and personals.
Influencers are now widely used by brands worldwide. There are billions of people using social media platforms and influencers can help brands to promote their products and services via their pages and profiles.
Although influencers are mostly used by B2C companies, B2B brands now employ this marketing channel as well. B2B brand owners now make use of popular social media platforms to promote their companies and they also use LinkedIn to gain more connections.
B2C brands are known to use the services of influencers a lot more than B2B ones. Since they sell to individuals rather than companies, influencer marketing is much more suited to B2C.
Brands seeking to develop their brands and become bigger need to partner with larger organizations.
Partners can range from; technology partners who provide multiple product integrations, affiliate partners who market products for commissions, or solution partners who provide viable customer solutions. B2B brands now partner with associates to improve their reputation. For instance, Booking.com has a partnership with Amazon Prime, giving a 10% discount to all bookings of Amazon Prime members.
B2C partnerships are between the brand and its clients. Partnerships can be in the form of endorsements and financial incentives
Podcasting is a great way to connect with buyers as brands get to express themselves better and provide astute details on emerging issues.
B2B companies use podcasts to show their level of expertise to clients. Brands can interview experts in diverse fields that correlates with what they sell.
B2C companies term podcasting as the latest marketing channel. They use the marketing channel to get in touch with their clients and make important announcements and updates.
Public relations (PR) helps brands in creating awareness and maintaining a dynamic reputation.
B2B brands face the challenge of complexity in marketing and generation of revenue, but they can leverage the help of Public relations agencies to improve their reputation, thus making companies willing to make transactions with the brands.
B2C brands can also launch PR campaigns to build their trust with their audiences. PR agencies help B2C brands attract more buyers by branding them as trustworthy and reliable startups.
Review sites are notable for helping brands build trust and loyalty with their clients.
B2B marketers make use of this marketing medium to make clients trust them and it helps them in building a strong and lasting relationship with their buyers. Clients can leave positive reviews on review sites and this helps in generating leads, and also converts prospects into buyers.
B2C brands need reviews even more than their B2B counterparts. With a much wider customer base, the B2C market is large and companies must build a solid reputation to stay at the top of the industry in order to keep making profits. Reviews are pertinent in convincing leads and prospects about products or services companies market.
Social media is the new gold of marketing. Lots of startups have social media accounts as it is easier to communicate with clients that way.
B2B companies have jumped on this marketing trend too. They have accounts on popular social media platforms like Facebook, Instagram, Youtube, and Twitter. Employees of companies also contribute to the voice of the brands. With billions of users, social media enables brands to reach wider audiences and helps them to respond to inquiries and provide their clients with responsive customer service.
B2C brands get to reap the benefits of using social media even better. They can educate clients about their products, make important announcements, attract prospects and generate leads, promote their products, and increase their reach. Social media is very powerful and can tremendously skyrocket the revenues of B2C companies.
Word of mouth
Another marketing channel used by startups is Word of Mouth (WOM).
Word of Mouth is an efficient marketing channel for B2B companies. When a company puts in the good work, clients talk positively about the company and this can help them generate more leads and sales.
In B2C, Word of Mouth works exactly the same way it does in B2B . When a company’s product is beneficial to clients, clients talk positively about such products and this has a positive influence on people. In other words, it’s a form of marketing that guarantees sales for companies as their buyers give them the benefit of doubt.
Key Takeaways B2B vs. B2C
Now that you have a clear understanding of how B2B marketing differs from B2C marketing, it’s vital to know that there are still some important things to consider apart from choosing the model that suits your brand.
Here are a couple of key takeaways to keep in mind.
Adapting to changes in customer in customer behaviour
Saving time and costs is crucial in marketing. Buyers want to get value for their money without wasting their time. Brands don’t have to stick to a specific model of marketing, they can alternate between the pair of models to better satisfy their clients. At times, a B2B brand might require a B2C marketing tactic to promote a product better, and at the same time, a B2C company might make more revenue selling to brands rather than individual buyers. Industry giants like Amazon, Apple, and Samsung alternate between selling to individual users and startups.
Additionally, having comprehensive product knowledge is vital. Brands should endeavour to promote products relevant to their core audience; products that are functional and appealing to buyers.
Focusing on customer experience
Another important tip to note is customer experience. Brands should focus on ways to improve the experience of customers to gain their trust and make them loyal.
B2B models apply this marketing strategy by making their websites responsive and appealing to visitors. They also provide a responsive 24/7 customer support base to help buyers facing difficulties.
B2C brands can imitate this marketing strategy to improve the experience of their buyers too. They can adopt the B2B model by improving the design and responsiveness of their web pages and also providing an adequate support base.
Brands make use of marketing tactics and models that suit their products and services. It’s only natural that they choose between a B2B or B2C type of marketing to generate revenues.
There are lots of differences between the pair of models and companies must carefully select the one that appeals more to their target audience. Buyers are the major players in any ecommerce market and satisfying them is crucial to making profits and growing your brand.
However, there are still many similarities between the two ecommerce models. The most important thing is to know which model to apply to boost sales and scale up.