What do a software company and a car dealership have in common?
They all have sales – whether they sell cars or software.
But have you ever noticed how in the case of cars (B2C), companies tend to be a lot more over the top — often using celebrity endorsement and aggressive marketing — while selling software (B2B), it’s more of a matter-of-fact approach?
Let’s explore why this is the case.
In this article, we will present all that it means to have a clear understanding of both B2B sales vs. B2C sales.
- What are B2B sales?
- What are B2C sales?
- The Significant differences between B2B sales and B2C sales
- B2B Sales vs. B2C sales: The Verdict
What are B2B sales?
B2B sales is a term used to describe the process of selling goods or services to other companies. It’s also known as business-to-business (B2B) sales, though not all B2B sales are made by businesses. Government agencies and non-profit organizations also make B2B sales.
The type of products that B2B businesses sell often include industrial goods and services such as raw materials, machinery, computers, and other office supplies. But they might also include software, such as selling SaaS to small business owners or consulting services like legal advice or accounting help for larger companies.
What are B2C sales?
The term B2C, or business-to-consumer, refers to selling products and services directly to consumers. This can include everything from selling books to consumers, selling insurance from home or selling solar panels.
Significant differences between B2B sales and B2C sales?
1. The Customer
Business-to-business (B2B) transactions involve an organization selling its goods or services to another organization — typically a larger one with purchasing power over the smaller seller.
In B2B sales, the buyer is not a human who cares about your product and wants it for themselves. They’re employees who care about their company’s bottom line and want to buy things that help them achieve that bottom line.
JJFoods is an example of a business-to-business (B2B) sales model, supplying essential food products to fast food outlets and restaurants, and serving them at a marked-up price to consumers.
On the other hand, Business-to-consumer (B2C) transactions involve an individual buying from an organization — typically a smaller one with no leverage over the bigger buyer.
In B2C sales, you’re selling to real people with real needs and real emotions. They want your product because it will make their lives better in some way — it’ll make them healthier or happier or more productive or more creative or less stressed out, or whatever it is that makes them happy.
The B2C market is home to some of the most successful brands in the world, including Apple, Coca-Cola, Nike, and Adidas.
2. Relationship vs. Customer Experience
The two industries have different goals when it comes to sales. While B2C companies are focused on getting customers in the door, B2B companies are interested in long-term relationships with their clients. In some cases, this means that a customer might not even buy anything from the company at first.
For example, if you run a podcasting hosting software company, your primary objective might be to get people to try out your product or service free of charge. Once they’ve gotten a taste of what it’s like to use your software, they’ll be more likely to purchase it down the road as well as recommend it to others.
Here’s a real-life example:
Volvo Construction Equipment —a B2B brand—integrated a cross-channel marketing strategy to increase sales with CRM tools. To nurture leads and convert them into customers, the company used SEO and social media to drive traffic to its site. When visitors started visiting that site, it invited them to sign up for the monthly newsletter.
In addition, Volvo integrated its email service provider and CRM with its website. They were able to send automated emails to leads based on the pages they visited, products they purchased, and other significant information.
By personalizing emails, Volvo’s email open rates increased from 15% to 20% in 18 months. What’s more, the cross-channel campaigns combined with CRM software made Volvo $100 million in yearly sales.
Similarly, in a case study of a B2C e-commerce brand specializing in custom blinds, shutters, and shades, the brand modernized its e-commerce store to offer a better customer experience – increasing online sales by 20%.
3. Number of Stakeholders
In B2C, the person who is ultimately responsible for making the purchase typically makes it on his own.
But in B2B, the person who is ultimately responsible for making the purchase typically has a team of people around him who must be consulted before he makes any decisions. In fact, most business purchases involve a buying center that must be addressed throughout the sales process.
For the uninitiated, a buying center is a group of people within an organization who collectively make the purchase decision for a product or service. The buying center can be defined in a very general way, as: “The group of people who are responsible for making purchase decisions.”
The key thing to note here is that the buying center isn’t just one person or even one department — it’s often a number of departments or individuals who have an influence on whether or not something gets bought.
Suppose you’re selling webinar software to a company with 100 different departments. In that case, you may need to send your sales proposal to 10 different people to get your product approved for purchase. That means you’ll have to deal with ten different stakeholders — and that’s just one step in the buying process!
Or, for example, if you’re selling a new piece of software to an IT manager, then they may well have influence over whether or not it gets purchased. But they might not be able to make the final decision on their own — they might need approval from finance or marketing teams before they can make a purchase decision themselves. The IT manager may also need to consult with colleagues before making any decision like this — maybe there are other departments in his company that might use this software too, so he needs their input as well.
Here’s a B2B buying journey in action, for instance:
4. Length of The Sales Cycle
B2C sales typically have shorter sales cycles because customers are more price sensitive. By the time they get to you, they’ve already done their research and picked their favorite brand. They’re ready to buy — and they’re looking for a deal.
In contrast, B2B customers are usually less price sensitive and more focused on value than price. They’re often making a big purchase decision for their company and want to make sure they’re making the right choice. This means they need more time to get comfortable with your product or service before deciding whether or not it’s right for them – this means more cajoling using follow-up emails and sales calls from your side.
The B2B cycle can be broken down into a series of steps:
- Lead generation
- Sales qualification or lead scoring
- Objection handling
5. How You Approach Marketing
In the B2C world, social media is king. B2B companies have a different set of needs and channels that work better for their target market.
For example, it’s not uncommon for B2B companies to use their website as a lead generator for other marketing channels. You might see this on the homepage or in the footer where people can sign up for things like webinars or newsletters.
B2B companies also tend to focus more heavily on developing long-term relationships with customers through content marketing and email outreach. They often send out emails that are informative and helpful without being overly promotional (which is more common in B2C).
The marketing team collaborates with the sales team, defines an ideal customer profile and generates B2B leads and prospects, and pushes them to sales. The sales team is responsible for qualifying these leads to understand if they have a genuine interest in your product/service or not.
Both inside sales teams and field sales teams have different roles.
The inside sales team will be responsible for following up on all incoming leads, converting them into opportunities, setting up demos, and closing deals. For services, software and digital products, the inside sales team can also demonstrate with screen sharing.
The field sales team is usually made up of reps who visit potential clients in person to help close deals. They typically travel from city to city, but some companies use virtual office software to make their teams more efficient.
Here are some more strategies marketers use to close B2B sales:
- Using squeeze pages or opt-in offers like lead magnets, followed by email autoresponders or cold calls and make a specific offer
- Connecting with potential customers on LinkedIn
- Creating an email newsletter (or two) with useful content for their target audience
- Using Google, Facebook or Linkedin Ads to get traffic to the website and collect leads (depending on which demographic they target)
While social media marketing is more of a B2C domain, LinkedIn is a great social platform for B2B sales and marketing professionals.
It’s a good place to stay in touch with your contacts, share content, network with other professionals and engage customers. However, it can also be a great tool for prospecting new customers. B2B sales teams use Linkedin Sales Navigator to find and export sales prospects.
In B2C marketing, you’re focused on creating awareness of your brand and driving people to your website or eCommerce store.
Email marketing is the most common way for eCommerce to do this. It’s an easy way for customers to get information about sales, discounts or new products. You can also use email marketing to drive them to landing pages where they can sign up for a newsletter or download a white paper.
Social media marketing is another important channel in B2C marketing. They can also be used as a platform for showing off your brand’s personality through content such as videos, photos and posts.
Influencer marketing is another popular tactic for B2C brands because it allows them to reach new audiences at scale by partnering with popular people who already have large followings on social media sites like Facebook, Instagram and YouTube (to name a few). These influencers may be bloggers or celebrities with millions of followers across multiple platforms – the more followers someone has, the more people will see your brand through their content!
Video marketing is also an essential part of any B2C marketing strategy. They can help you stand out from competitors, educate customers about your product or service and convert them into buyers.
B2B and B2C also have one thing in common - both can use chatbots to generate leads on their homepage.
6. The Reasoning Behind Purchasing Decisions
In the B2C world, consumers are buying products because they want to consume them. McDonald’s is a good example of this. McDonald’s sells food and beverages, but they also sell an experience. The experience comes from the fact that people can come to McDonald’s and get great-tasting food quickly. The speed of service is also important because it allows people to get in and out quickly and still have time for other things like work or school.
In the B2B world, companies are buying products for use as a means to an end (increasing profits). For example, a company might buy a machine so that they can make more products faster with fewer employees. The machine is used as a means of increasing profits by saving money on labor costs.
B2B Sales vs. B2C sales: The Verdict
In the end, it’s important to remember that B2B sales and B2C sales are not exactly the same thing.
B2C is all about satisfying individual customers, reaching their individual expectations and providing a great user experience. Whereas B2B sales are about analyzing requirements and business needs and then providing a product or service that meets them.
About the author
Eduard Klein is an International Digital Growth Marketer, Blogger, and Entrepreneur with a global mindset. He guides through the process of starting and growing a digital business, and riding the wave of digital technology and marketing without getting swept away.