Your Essential Guide on
Business-to-Business (B2B) Activities
Most businesses operate by selling a product or service to an individual consumer, and these are known as a Business-to-Consumer (B2C) model. Meanwhile, a B2B business model encompasses companies that sell products or services to other businesses. Examples of these are industrial suppliers offering hydraulic power packs to construction companies or a textile mill selling various fabrics to a clothing brand. Even if you’re a small business, you’ve probably worked with a B2B before.
If you’re thinking of starting a business but aren’t sure whether to pursue a B2B or a B2C model, read on.
How does B2B differ from B2C?
Besides their target audience, B2B marketing functions differently from B2C companies. While the general advertising method is the same, the intent is different. B2Cs often pander to customer needs and entice them through fun and engaging ads. Meanwhile, B2Bs take a more serious and professional approach. Their goal is to convince the key figures in a company that partnering with them will yield the best possible ROI for their business. To an extent, marketing a B2B is much harder since their audience is comprised of highly discerning and seasoned company executives.
Another key difference is that B2B customers take much longer than B2C customers to come to a purchasing decision. B2C companies can take advantage of phrases like limited edition or flash sale to coerce their buyers into making impulse purchases. Meanwhile, in B2B, every purchase is scrutinised and debated and goes through several layers of approval before it’s even finalised. The stakes are much higher when making business decisions, so B2Bs don’t expect to lock in sales as easily and as quickly as B2C.
Why is the B2B model important?
As mentioned previously, every business, from small, independent shops to large corporations, has likely benefitted from a B2B business model. Without B2B, most businesses’ supply chain would fall apart. If you own a restaurant, the ingredients you use were sold to you by a supplier, who is essentially a B2B company. You could have outsourced labour to build your restaurant, and the contractor you hired is another example of a B2B company.
A B2B business model also allows companies to be more efficient. If, for example, a company needed a digital marketing strategy, building a digital marketing team entails hiring the different individuals that make up the team, training them, and giving them time to gel with each other as a cohesive team. Meanwhile, by hiring a digital marketing agency, they will receive the service they need in a shorter time because the agency already has the in-house skill and expertise they’ll need.
Each model comes with its own set of challenges, so you’ll have to consider those before deciding what kind of business you’ll run. Despite the big differences between each model, you're still selling to people at the end of the day, so your strength will lie in your ability to identify and cater to your audience’s needs, whether they be an individual or a corporation.