Business-to-business and business-to-consumer sales are two popular sales marketing strategies businesses use to appeal to customers and generate revenue. While the two processes are similar in some ways, understanding B2B vs. B2C sales is crucial to mastering these methods.
So what are B2B sales vs. B2C sales, what are the stages of each process, and what should you consider when choosing between these models? Read more to find everything there is to know about B2C/B2B selling.
Defining B2B and B2C Sales
Understanding the differences between business-to-business and business-to-consumer selling requires a thorough B2C and B2B sales definition. To start, let’s ask: what is a B2B company, and what is the meaning of B2B sales?
A B2B company is a company whose transactions occur between one business and another. B2B companies work to sell products and services that help other companies solve problems, including some of the following examples:
- A company that sells cloud services used by another company
- A company that sells raw materials to other companies to create new products
- A company that provides marketing services to help other companies showcase their products
But what is B2C sales, and what is a B2C company? B2C refers to business-to-consumer sales. This selling process involves a business that sells directly to consumers rather than selling to another business. Some common examples of B2C companies include the following:
- A retail store selling products directly to customers through an in-store shopping experience
- e-commerce businesses that sell and ship products directly to customers
- Healthcare and pharmaceuticals that provide medications directly to customers
Sales Processes
There are notable differences between the sales process for B2B and B2C companies. Below is a breakdown of each process to help you understand which model is better suited for your business.
What is a B2B Business? The B2B Sales Process
The B2B sales process generally adheres to the following six steps:
- Research. B2B companies begin the selling process with thorough research into the prospective business. During this research, businesses build a buyer persona, assess the challenges the other business is facing, and determine which solutions are best suited to solve these issues.
- Prospecting. Prospecting allows businesses to focus on specific leads likely to convert into customers. Prospecting helps further define the unique needs of a potential customer to detect ideal customers based on the research process.
- Need assessment. Following the prospecting process, B2B businesses engage with a thorough need assessment. This stage continues to narrow down target customers to increase the likelihood of making a sale. Businesses might ask other businesses questions about their current challenges and expectations from a new solution.
- Sales pitch. The selling business then makes a pitch to the prospective company. This unique pitch should connect the company’s pain points with the practical solutions being offered by the selling company. During this stage, the company will also address any objections the customer may have about the offering.
- Conversion. Following the sales pitch, the company can work to convert leads into paying customers. This step involves sending a final proposal to the prospective customer, navigating pricing negotiations, and closing the deal.
- Follow-up. After completing the sale, the selling company follows up with the customer company. This step helps encourage repeat customers and strengthens the existing relationship between the two parties.
What is a B2C Business? The B2C Sales Process
While there are some similarities between B2B and B2C sales, the B2C sales process differs from B2B in key ways. The B2C sales process occurs in the following six steps:
- Lead generation. Like B2B sales, B2C companies must identify and generate target customers. Companies create buyer personas and work to generate leads through efforts like e-commerce marketing.
- Needs assessment. This step is also similar to the B2B sales process and involves the selling company researching to narrow down its target market and address the specific needs of its target customers.
- Product presentation. The company then presents products to customers, such as placing them on an e-commerce website or in a retail store.
- Closing the sale. After showcasing the product, B2C companies directly sell products to the consumer. These companies might answer relevant questions customers have about the products before closing the sale.
- Customer service. B2C companies must provide thorough customer service to answer follow-up questions and concerns about products and services.
- Feedback and improvement. Based on customer service inquiries and collected feedback, B2C companies work to improve their offerings before presenting new or upgraded products to consumers.
Comparative Analysis
Understanding B2B sales vs. B2C sales requires a thorough comparative analysis of each process and its specific challenges. So, what is the difference between B2B selling and B2C selling? Below are some of the key ways that these methods differ.
Products Offered
One way that the meaning of B2B sales differs from B2C sales is the types of products each business offers. B2B businesses typically provide software, raw materials, and manufacturing components, while B2C products include offerings like retail goods, clothing, food, and similar items.
Customer Service Strategies
Both B2B and B2C businesses need to provide customer service. However, how each business type approaches customer service is significantly different. B2B transactions are lengthy and complicated, and to meet customers’ needs, B2B businesses must often provide a dedicated service team to address concerns.
In contrast, B2C customer service is much more self-directed. B2C customers typically want faster responses to simpler questions than B2B customers, and many B2C businesses provide self-service options to meet customer service needs.
| Aspect | B2B Sales | B2C Sales |
|---|---|---|
| Products Offered | Software, raw materials, manufacturing components | Retail goods, clothing, food, everyday items |
| Customer Service Strategies | Lengthy and complicated, dedicated service team | Self-directed, faster responses, self-service options |
| Sales Cycle | Long, complex solutions, long-lasting relationships | Short, individual transactions, shorter-term relationships |
| Volume of Products | Smaller volume, niche, tailored to organizations | Larger volume, mass production for the market |
| Price of Products | Higher prices, complex solutions for business issues | Lower prices, everyday products for consumers |
Sales Cycle
The sales cycle for B2B businesses compared to B2C businesses differs significantly. The B2B sales cycle is long because customer solutions for B2B businesses are typically more complex, and relationships between businesses and customers are long-lasting ventures. In comparison, the B2C sales cycle is much shorter and typically involves smaller, individual transactions rather than long-term, ongoing relationships.
Volume and Price
The volume of products available from B2B businesses is typically smaller than B2C organizations because B2C companies often mass-produce specific products. For instance, a B2C retail company might produce thousands of the same shirts to sell in stores. Because B2B sales are more niche and tailored to specific organizations, the volume of products is usually smaller.
While the sales volume for B2B companies is smaller, the price of B2B sales is often much greater than that of B2C products. B2B products are complex solutions to address ongoing issues with a business, while B2C products are everyday products that customers can get at a lower price.
Market Dynamics
Understanding business-to-business vs. business-to-consumer sales requires knowledge of the different market dynamics for each model. The business-to-consumer market is bigger than the market for B2B businesses because of the widespread use of products that B2C companies offer. Because B2B products are more niche, the market size for B2B organizations isn’t as large.
B2B and B2C markets also have unique trends and consumer behaviors that separate the two. Some emerging B2B market trends include:
- The utilization of generative AI in B2B marketing
- Shifting marketing priorities to increase lead volumes and conversion rates
- An increased focus on brand awareness
- Optimization for the middle and bottom-of-funnel
In comparison, B2C sales techniques and trends are increasingly focusing on the following:
- Using social media as a resource to reach target audiences
- An increased focus on smartphone sales rather than traditional retail transactions
- Enhanced efforts to promote privacy and security for B2C customers
Choosing the Right Model
Now that you understand the business-to-business vs. business-to-consumer market, you can take steps to determine which model is appropriate for your business. First, consider the following factors:
- The characteristics of your target audience – B2B targets other businesses, while B2C targets individual consumers.
- The length of your sales cycle. If you have a longer sales cycle, B2B business models are often preferable to B2C.
- How your products are marketed and branded. B2B products target a niche audience and emphasize business benefits, while B2C marketing is typically more widespread and appeals to a vast customer base.
- Your distribution channels. A B2B model is more suitable for complex distribution networks, while B2C often relies on straightforward retail channels.
- The volume of your transactions. B2B businesses practice fewer transactions with higher volumes, while B2C businesses have more transactions with lower values.
- The complexity of your product. B2B products are typically complex and require technical knowledge, while B2C products don’t require this knowledge. You might select one model over another depending on the nature of the products and services you offer.
When to Target Both Markets
In some situations, a dual approach benefits businesses with specific offerings. Now that you understand the meaning of B2C sales and B2B businesses, it’s important to ask: what is B2B and B2C when the two models work together?
You might consider a dual approach when your products or services apply to businesses and individual consumers. A dual approach can be beneficial if you can maintain brand consistency while still marketing different products to relevant customers. However, because this approach takes significant resources, businesses must be sufficiently prepared to handle larger order volumes.
Some B2C and B2B examples where a dual approach is beneficial include industries like technology and consumer electronics. Technology companies often have different products and services that suit needs of varying sizes, such as larger packages to meet high demand for a business or smaller offerings for individual consumers.
Is Amazon B2B or B2C?
Many people ask whether Amazon is a B2B or B2C company. Amazon is an example of a company that takes a dual approach to sales, meaning it’s both a B2B and B2C organization.
While many people assume Amazon is strictly B2C because it focuses on selling products directly to consumers, more businesses are turning to companies on Amazon to purchase the supplies they need to create products and services. Because of this emerging trend, Amazon is considered a hybrid model.
Conclusion
Understanding B2C and B2B e-commerce is crucial for creating a business model that works for your organization. Now that you understand what are B2C and B2B sales, you can select a model that works best for your business and start marketing to the right audience for your offerings!
