Difference Between B2B and B2C

In the sales industry, your main goal is to sell your product and maximize your profit. In doing this, you have one major choice to make. Do you want to sell to end-users or consumers or would you prefer to sell to other businesses that need your products? Which of these groups of customers you choose to sell to will determine your entire marketing strategy.

The terms B2B and B2C were developed to signify or denote your target market. The terms first grew around the online community but then broadened to include offline sales as well. B2B refers to your potential market being a business and if you are a B2B business, your primary activity is business-to-business sales. The term B2C refers to a business-to-consumer sales situation.

Differences in B2B and B2C

The organization and execution of your marketing program depends on which of these two markets you have chosen to enter. The B2B market relies on very different sales strategies to be successful than the B2C market. The B2B sales market heavily relies on relationship selling. The sales are obtained in a longer sales cycle than B2C sales. The differences in the characteristics between B2B sales and B2C sales and their associated marketing schemes are plentiful.

Sales

B2C sales are driven by highlighting the advantages of the product and its usefulness. Depending on how the product is presented to the end user, it may appeal to them based on novelty, ease of use, appearance or price. Any one of these characteristics can influence the sale to a consumer.

B2B sales are made based on your relationship with the purchaser. One of the most important jobs for a B2B salesperson is to build a relationship with the decision maker in your customer's business. The emotional part of the sale is based on the interpersonal relationship in a B2B sales environment whereas the emotional part of the sale in a B2C sale is between the customer and the product. The method used to maximize your sales volume involves relying on the relationship in a B2B sale. It is important to remember that the sales cycle will be longer with a relationship based sale to a business. For example, a business may buy a few of the products to evaluate and then a larger order will follow the evaluation of the first few. In B2C sales, the sales volume is based on getting the customer to by more than one product. Entice them to get one for a friend or relative.

Market

The market you target when selling your product is also very different among B2B and B2C businesses. B2B sales are focused on a very narrow segment that has a use for your product. Those businesses that can make use of your product to save them money or make part of their business more productive or easier will be the market on which you spend your time and marketing efforts.

In B2C sales, your market is the entire sales market of consumers. There is very little discrimination or qualification of potential customers. If the product appeals to them, then they are a customer to which you may sell your product.

Sales Cycle

The sales cycles and length of time to achieve a sale is very different between B2B and B2C sales. Selling to a business involves passing through internal "red tape" in order to get the approval for a company to buy your product. Once the approval is received, the order is placed and the product is delivered. The bill is then usually paid on a net 30-day schedule so the profit to be achieved is at least a month out on most sales. With B2C sales, the sale is almost instantaneous. The customer decides to buy and pays right then. The product is paid for and you move on to the next customer.  B2B sales are almost entirely based on a rational decision of business value to your customer. The product will simplify a task, provide less waste, increase productivity or cut down labor costs. These are only a few of the reasons the product is attractive to your business customer. In B2C sales, the sale is emotional due to the status of owning it, value that it provides the customer, or simply the price.