B2B vs. B2C the most striking revenue development differences

What is B2B business development?

B2B, short for business to business, refers to companies that sell their products primarily to other companies rather than to consumers. It is therefore primarily a sales process between two companies.

B2B companies are therefore all companies whose customers are business organizations like yourself. Think, for example, of airbag manufacturers such as Takata and Autoliv, which sell their products and technologies to car manufacturers such as Ford and Audi.

While B2B business development also includes services such as accounting firms that represent large and small companies. Mainly, there are three types of B2B business development: supply sales, distribution sales, and service sales:

  1. Supply sales: when one company supplies another with products such as office supplies, equipment, and work clothes, they are supply sales. Companies usually place these orders in large quantities and require management approval.
  2. Distribution sales: in a distribution sale, a wholesaler hands out products in large quantities to another company, which in turn sells them to consumers. A good example of this is the relationship between a manufacturing company and a supermarket.
  3. Service sales: In this case, one company provides a service to another instead of a physical product. Software development or legal advice can be given as examples.

What is meant by B2C business development?

B2C (Business to Consumer) means that a company sells its products directly to individual consumers. Thus, this term refers to any sales process that involves selling directly to the consumer. This includes direct sellers, online intermediaries, advertising and subscription models. In general, marketing processes play a large role in B2C sales.

Consequently, B2C companies are also those that want to build direct sales channels and evoke an emotional and familiar customer relationship. The corner café is a good example: for the café owner, creating a memorable and unique ambience can be as important as brewing high-quality drinks to keep the place attractive to customers.

The same is (mostly) true for Apple, with its extensive ecosystem of digital consumer products. For an electronics manufacturer and software developer like Apple, UX design, hardware aesthetics, online stores and libraries, modern branding, and customer support make the difference between success and failure.

Commonalities B2B and B2C Business Development

Based on the type of customers a company targets, then, it’s easy to identify the B2B or B2C business type.

Finally, a fundamental similarity of B2B and B2C business development is that the corresponding sales almost always revolve around the customer.

Since the customer is at the center, the first point in an effective go-to-market strategy of any company should be to know the target customer and his needs. It is therefore recommended to introduce so-called omnichannel tools into the business development process landscapes in order to be able to measure customer experiences and optimize them accordingly.

Both B2B business development and B2C sales require comprehensive knowledge and extensive experience in the area of customer service.

Differences B2B and B2C Business Development

While business developers in B2B sales usually deal with high-level executives, B2C sales focus directly on the consumers themselves. Consequently, the crucial difference between the two business development strategies relates to influencing the respective purchasing decisions of the favored target group. The following preferences and influencing factors should be considered:

B2B purchasing decisions

In B2B business development, customers make their purchasing decisions primarily on the basis of rational and strategic considerations. This primarily includes how a product or service can add value to their own business (e.g., improve process efficiency, improve services to their own customers, improve profit margins, increase sales, etc.). If a B2B business developer can successfully demonstrate that the value created by a product or service exceeds the corresponding acquisition costs, the potential customer is more likely to opt in.

Consequently, since B2B partners will only make a purchase if certain criteria are met (e.g., functional specifications, business requirements, cost considerations), B2B business developers typically need more in-depth product knowledge to effectively target, educate, and engage in conversations with their audience.

In addition, B2B business developers should also have top-notch communication skills and professionalism to build meaningful, long-term relationships with all decision makers – including executives. Once a connection is made, it then usually leads to the development of long-term relationships between the parties. This in turn also fosters greater sales, referrals and future collaboration.

Buying decisions B2C

On the other hand, B2C audiences tend to make purchases based on the emotional connection established by a brand. Therefore, most B2C messaging appeals to consumers’ personal desires and values. Thus, your company’s “brand” is the critical factor for successful sales.

Unlike B2B business development, B2C sales do not usually involve lengthy sales cycles. Ultimately, this marketing strategy is about individual customers making a purchase for personal reasons. The purchase is then usually viewed as a one-time transaction where the focus is on the product price itself. After all, individual customers can also change their motivations at any time.

Financially capable consumers in particular will not hesitate to buy an expensive brand if it meets their aesthetic preferences or satisfies a need for social status – even if there are less expensive but equally functional alternatives. So, in contrast, B2B buyers focus on cost efficiency and functionality.

B2B and B2C hybrids

Although many companies pursue only one business model (B2B or B2C), the number of companies adopting elements of both is steadily increasing. For example, most major tech companies such as Google, Microsoft, Apple and Amazon now operate divisions that focus on consumers as well as those that target businesses. A growing number of business experts believe that the lines between B2B and B2C companies are blurring by the minute.

Changes in technology and customer behavior – among other factors – are giving rise to new intermediate forms between B2B business development and B2C sales. In the area of business development, partnerships are also being forged through some intermediaries, which can lead to longer chains of B2B2B.

In addition, mixed forms of B2B and B2C are emerging in many places to provide a complete service offering to consumers. This form of distribution is called B2B2C. B2D projects are a form of distribution between a company and one or more developers. This often starts as a small development process where the developers produce a product to serve their own needs.

Lastly, there is the B2R sales process, which is a sale through a so-called reseller.

The preferences of investors

First of all, it is important to select the investors you are interested in by means of a smart screening process. It is important to keep in mind that investors usually stick to the preferences of their own industries.  

So, it does not turn out to be beneficial to contact them outside their familiar segments.  

 Investor preferences are based on their individual industry focus as well as start-up maturity and ticket size of the investment. You should also differentiate your prospective investors’ preferences in terms of their B2B or B2C contact circuits: 

  1. B2B contact circuit: B2B is the abbreviation for “business-to-business” and expresses the business relationship between two companies. With a B2B company, you’re also specializing in a particular target audience.  Realize that it makes a big difference whether you’re trying to attract an individual or a business customer. You can get in touch with investors who prefer B2B contact via social networks such as LinkedIn or Facebook. 
  2. B2C Contact switching: In distinction to the term B2B, B2C companies are defined by the fact that their clientele consists of end consumers and that they focus on the sale of services or products to private individuals. With a B2C company you address a larger target group than with B2B, but the turnover per customer or per purchase is usually lower than in B2B. At the same time, the relationships with your customers are characterized by a higher degree of anonymity than is the case with a B2B concept.

For your concrete approach to investor screening, the following should apply: Check your investor’s preferences and compare their portfolios with your startup. Additionally, you can research social media such as LinkedIn.  

However, you should avoid contacting your investors via email at all costs.

Business Development Strategies

Once your startup or scaleup has finally decided on one of the two development strategies (B2B or B2C), you should also strategically incorporate this decision into the following areas of your business:

  1. customer relations
  2. branding
  3. decision making processes
  4. target group alignment
  5. advertising & content

1. Customer relations

B2B: Building personal relationships

B2B marketing and lead generation focus on building personal relationships that lead to long-term business. That’s why relationship building is critical in B2B marketing, especially during the buying cycle.

And why? It gives you the opportunity to prove what kind of business practices, ethics and morals you care about. This ability to connect with your target audience allows you to differentiate your or your client’s business from the competition and build your brand.

Consequently, the top priority of B2B companies is generating leads. Because of the importance of repeat and referral business, developing these personal relationships can make or break a company.

By building honest and meaningful relationships, you can hope to avoid bad reviews altogether.

According to G2Crowd, 94% of customers read online reviews. Since the majority of customers read reviews, a negative review can be devastating. However, 72% of B2B buyers say negative reviews provide deeper insight into a product.

Wait a minute, bad reviews can lead to a positive outcome?

Yes! If a website has only positive results, it can come off as fake and untrustworthy. Remember that even the best of the best have some critics. By responding to the negative and positive reviews, you can adjust your business approach accordingly. In addition, you can show reviewers that you really care and that you are a genuine person who is responsive to customers’ needs and opinions.

B2C: Build transactional relationships

The goal of B2C marketing is to get consumers to buy products from your client’s or company’s website, thereby increasing sales. To achieve this, the customer must have a near-perfect customer experience with your website.

Have you ever heard the phrase “time is money”?

B2C companies value efficiency and therefore minimize the time spent getting to know the customer, which ultimately leads to the relationship becoming extremely transactional.

The marketing strategy focuses on selling the product, and most of the time is spent on delivering high-quality products as quickly as possible.

Unlike reviews in B2B, ratings are overshadowed by an influx of high-quality, positive reviews. If your company or customer is a B2C business and the products you sell are high quality, this shouldn’t be a problem.

One popular tactic that has proven useful for collecting B2C reviews is coupons or personalized discount codes via email marketing or remarketing.

By offering your customer an additional benefit, you can increase future user experience and even bring in an ambassador for your brand.

2. Branding

B2B: focus on relationships

Branding is a part of B2B marketing, but more often than in the B2C world, it’s done through relationship building. According to B2B International, branding begins with consistency in the presentation and delivery of your products or services.

In terms of B2B search marketing, showcasing your positioning in the marketplace and highlighting your personality can help drive brand recognition and lead generation.

Going back to relationship development,you need to have a keen eye for personalities in the marketplace. If you’re able to match your brand to your target audience, you can increase brand recognition and accelerate your lead generation.

B2C: Prioritize your message

Branding is essential in marketing because it allows the business developer to accurately convey a message, create loyalty with the customer, confirm credibility, create an emotional connection with the customer, and motivate the buyer to purchase.

Thus, it is also the top priority of B2C marketing!

But why? The relationship between the customer and the company is minimally interactive, so you need to create a lasting memory and a quality experience for the customer to ensure they come back.

To achieve this, it is essential to deliver credible messages and write motivational copy that resonates with customers.

3. Decision making process

B2B: Maintain open communication

The decision-making process is another point where you can appeal to the emotional and rational decisions of businesses. The B2B decision-making process is all about open communication between companies to determine whether or not it’s a good fit for both parties.

In this communication, comparing the positives of your business to those of your competitors can be very effective in staying one step ahead of them.

During the decision-making process, B2B customers need to evaluate the needs of the company or their individual employees. These needs can be divided into rational and emotional motivations.

The rational motivations are those that drive your financial thinking. Is this a good investment for you?
The emotional motivations are those that determine their emotional attachment to the company or individual employee. Will I have to lay off someone or a group of employees? Will we lose money and have to cut employee benefits?

At some point, these two decisions are important enough to influence your decision.

As a B2B marketer, if you understand your target audience, you can better understand the decision-making process that might apply to you. If you are able to convey a message that is uniquely specific, you can get ahead of your competitors by creating an emotional connection between both parties.

B2C: Maintain open communication

The B2C decision process is where you can begin to leverage the customer’s expertise in the conversion funnel to maximize ROI. At the beginning of the conversion funnel, a B2C marketer must be able to create influential ads that communicate a need for a product to the consumer.

Once the consumer has identified a need, they already know exactly what type of product they want to buy. Unlike B2B companies, consumers are much more flexible when it comes to buying a specific product.

As a marketer, it is important to continue to engage the consumer and provide them with what they are looking for by simplifying the decision-making process. If the consumer is not yet committed to buying your product, they will often look around at your competitors to see if they can get similar products faster and at a lower price.

When evaluating the conversion funnel, we see three groups of keywords that we can potentially track to capture the customer’s attention.

For example, if the customer wants to learn more about electric bikes, they can search for the long-tail variation of the keyword “electric bikes,” such as “what is an electric bike.”

Once the customer learns about the electric bike, he may want to know more about electric bike brands that are trustworthy and high quality. So, he will search for “best electric bikes” next.

After searching through the different brands, he may find the exact brand he wants to buy from and is now ready to buy. So the customer searches for “electric bike of the brand xxx”.

As a B2C search marketer, make sure that all of these parts of the conversion funnel are covered and targeted through blogs, core pages, and product pages so that you have a higher chance of capturing potential customers in this area.

Remember, no matter how solid your conversion funnel is, if your buying process is confusing, it can turn your customers away and leave room for others to poach them. Optimize your conversion funnels, minimize the complexity of these processes, and work toward the conversions you want.

4. Targeting

B2B: Find your niche

B2B companies typically work in a niche market, and it’s essential to understand the demographics of your target audience. To target them effectively, you need to compile and analyze accurate data.

Your data focus can come in numerous forms, both qualitative and quantitative. Some of the most effective tactics for gathering data include Google Analytics and keyword research. However, the best way to determine your audience is to evaluate the search results pages for your keywords on Google.

By actively going through the SERP and seeing what users’ intentions are for certain keywords, you can deduce what types of searches certain people are performing. When you combine your conclusions from SERP analysis with keyword research and demographic data analysis in Google Analytics, you should have a general idea of who your target audience is.

With this data, you can successfully build a lead generation strategy with integrated ads targeting specific keywords and demographics.

Lead generation is the main goal for B2B marketers. Therefore, building a top-of-funnel prospect list followed by a highly integrated remarketing and lead generation marketing funnel is essential to reach your top prospects.

B2C: Follow the sales funnel

Unlike B2B companies, B2C companies work in a larger market, and the target audience is much more diversified. Search marketers place great emphasis on following the marketing funnel when acquiring customers.

By starting at the top of the funnel and running ads that target emotional and product purchases, you can cast a wide net and try to attract some qualified top-of-funnel leads. By analyzing the demographics of the top-of-funnel leads, you can create a list of warm leads and retarget those individuals in hopes of generating sales with those leads.

Another important strategy for B2C targeting is implementing highly effective CRO tactics. Writing enticing copy, creating high-quality and easy-to-navigate landing pages, and implementing simple but effective conversion funnels can change the sales game in B2C.

5. Advertising & content

B2B: Learn the jargon

B2B companies are much more likely to buy services or products from an expert who understands their terminology, processes, and even the decisions you need to make during the buying process.

So to reach your target audience, you should speak their language!

For example, a B2B company selling $50,000 worth of software doesn’t focus on writing fluffy text that entices the reader to buy the software on the fly. Instead, the text should focus on taking the emotion out of the decision and building trust with the potential customer.

The company, i.e., the director or manager making the purchase decision, is buying the software to improve the company’s overall performance. Even if he has personal reasons for the purchase, he must keep his emotions out of the decision and consider the positive and negative impacts of the purchase.

B2C: Write emotional ads

Unlike B2B businesses, B2C businesses need to use engaging language that entices customers to click on an ad. By using simpler language, you can speak in the customer’s language instead of using industry jargon that might make a customer turn away.

Ad copy for B2C should evoke emotion in the consumer. For example, someone buying a $200 bicycle will take less time to decide to buy than a company buying $50,000 worth of software.

The person buying the bike wants to enjoy the purchase, which means the copy and content should evoke emotions like joy and excitement.

Put great emphasis on this, because something as simple as the ad copy can make or break an ad campaign. Be strategic!

Whether you’re advertising for your business or serving clients as an agency, it’s important that you know the key differences between B2B and B2C revenue creation. Once you know these five key differences, you can take advantage of certain tactics that are unique to B2B or B2C companies.

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