Should Your Business Be Focusing On B2B Or B2C?
Why focusing on B2B or B2C is Important
Start-up business owners are usually confused about whether their business should be focusing on B2B or B2C. However, most people are not even aware of these two fundamental concepts. Whether you are one of the former or latter ones, you need to know everything you’re about to read. Starting from what B2B and B2C are, why they’re similar or different, and which technique you should choose for yourself, you will find everything right here.
What is B2B?
B2B refers to Business-To-Business business. It revolves around the idea that one business coordinates and collaborates with the other for an outcome. For example, if one business provides raw material to another company, and the latter produces the output, the phenomenon is a B2B business model.
Similarly, business-to-business marketing also refers to the advertisement and publicity of one company’s products and services to other businesses. Their items are meant for consumption by other organizations and manufacturers. For example, the automobile manufacturing industry is the most significant example of this type of business model. Almost every car or vehicle is produced from different products taken from other companies.
The tires come from a different brand, while the batteries belong to another company. Hoses, electronics, and everything else come together to form one output from a completely different brand. The manufacturing company purchases all these supplies from various businesses and markets the final product as its own.
Plenty of different companies are excellent examples of this business model. They include Dropbox, WeWork, Xerox, and General Electric. Take Dropbox, for example. This cloud-based storage company serves different businesses as a tool. Your office probably uses Dropbox as well. Did your office manufacture it, though? No, your company is using the service provided by another business. It’s a classic B2B business model.
The same goes with General Electric, which makes goods and products for other enterprises. Your office’s Xerox machine is also a product provided by another company, and you use it for your final product, i.e., your documents. If you open up a bookstore and visit the publishers to get a few books you can sell, you are basically a B2B customer.
What is B2C?
B2C refers to the business-to-consumer model, which revolves around businesses selling directly to the general public and consumers. These businesses bypass middlemen like wholesalers and third-party retailers to reach their customers directly. It is also sometimes referred to as direct-to-consumer or DTC.
These brands usually specialize in one field, and they are typically sold exclusively. Similarly, B2C marketing refers to the different strategies and tactics involved when a company markets its services to individual people and the general public. It revolves around the creation of content and advertisements that target customers for use in everyday lives.
Your all-time favorite businesses, including Walmart and Amazon, are perfect examples of B2C companies. These companies have their stores online, and they serve customers directly, so the end-user of their service or product is an individual customer. Indeed, these companies have products that are appropriate for offices and organizations.
However, they are meant to be sold to individual people and not to organizations and businesses on a large scale. Similarly, Facebook and Uber are also infamous B2C business models. They target individual customers as a tool to use in their everyday lives, and the services are ideal for everyday use.
When you buy a shampoo bottle for yourself or go grocery shopping, you’re purchasing from a business that is producing products for you. Hence, you are the consuming end of the B2C business. When you buy a smartphone from the Apple Store, you are purchasing from a B2C company. Similarly, when you buy a Mercedes car from their official branch, you are a B2C customer. Basically, every product or service you consume for your personal needs was produced by a B2C business.
What are the Similarities and Differences Between B2B and B2C?
Because we are focusing on B2B or B2C. There is one very obvious difference between the two business models, that you should be made aware of. Who your customer is. However, there are also some hidden similarities and differences between the two. Why do you need to know them? Because it will help you understand the individual concepts in a much better way, wrap your head around them firmly, and identify which one would work for your business.
The most significant similarity between B2B and B2C is that both of these businesses require marketing strategies. They both depend on marketing and advertising in the very same way. The two types of companies need to identify their target audiences and create powerful marketing strategies to aim at these customers.
Marketers involved in both these business types usually communicate with customers directly. So, their marketing strategies depend on target audiences. Both businesses need to be consistent and produce valuable products for their target audience, whether it is the customer itself or another company they are selling to. Both businesses also focus on customer retention and developing a long-lasting relationship with their buyer. Their sales and success statuses revolve around their relationship with the customer and how well they pitch their product and services to them. So, it is essential to identify the individual personas of the customer or the target audience in both cases.
Another very similar aspect is that both these business models should have various channels to communicate with their clients. You need to give them different ways to get in contact with you. These channels would include social media, emails, WhatsApp numbers, or anything else you want.
The most significant, most obvious difference between these two business models is their target audience. B2B businesses target other businesses, companies, and organizations, whereas B2C companies target individual customers from the general public. As discussed earlier, since these target audiences differ, the marketing strategies will be different as well. When you target an organization or a professional company, your marketing strategies and advertisements are more appropriate to their specific needs, and the sales are made on a larger scale. When you target an individual from the general public, you try to be more relatable to their everyday lives, focus on their individual problems, and present solutions in a way that appeals to them.
For example, brands that make batteries for other automobile companies advertise their product based on the automobile brand’s requirements. Their advertising strategies revolve around explaining how their batteries are excellent to make high-quality vehicles. A B2B company usually has higher value customers because their services and products are more complex and much more significant in value.
Later, when this automobile company produces the final product and addresses it to the general public, its marketing strategies focus on a regular person driving to work. The advertisements would sound something like this: “This car is amazing for children and your family’s day out.” The prices would also be relevant to the buyers they are aiming the product at. Hence, even though they target their respective audiences, the said target audiences vary a lot!
Potential markets are usually narrow in B2B industries. There are only so many automobile companies that you can collaborate with as a battery manufacturer. However, the number of people that want to buy a car is much, much higher. Therefore, the potential market for a B2C company is much more significant. Plus, when there is a smaller buyer’s circle, it is crucial for you as a B2B company to maintain the relationship between you and your buyer. It is not always possible for you to sell your product and move on to the next client.
Since you don’t have many potential clients in the market, you must build long-term relationships with the ones you have. In contrast, businesses that supply to consumers directly usually don’t worry about the long-term relationships with them. They sell their product and focus on attracting more customers because their potential client market is much better. There are a lot of other people they want to target and expand their reach.
The decision-making processes are also different for B2B and B2C companies- the former is much longer than the latter. B2B marketers usually have to deal with the different personas and target groups in every enterprise. The entire group that does all the business decision-making includes members from various departments, like the operational department, financial sector, business department, and the technical sectors.
For example, the automobile company will consult with its sales team, engineers, and the finance department before purchasing the batteries from a supplier business. If it’s a decision being made on a larger scale with more value involved, it will be equally important and will require higher authorization from an entire board before you can make the sales.
In contrast, B2C decision-making processes are much more straightforward. The buyer is purchasing the car for himself, so the only person you need to convince is the buyer alone (and maybe his wife!) As a marketer or a salesperson, it is much easier and simpler to identify and maneuver an individual buyer’s emotions than it is to convince a board of people.
Moreover, B2B customers usually don’t buy without a purpose. They are not impulsive buyers, and they don’t shop for fun. They purchase services, software, and technology to fulfill a requirement and serve a business purpose. If it’s not valuable or profitable to them, they don’t invest in anything. So, when you pitch a product to this business, you must be offering something useful that they don’t already have. In contrast, buyers in a B2C business model are prone to shop for fun or satisfy themselves. Thus, the return on investment varies in both these businesses.
Sales are also much faster in B2C transactions. Once your marketing strategies are in action and your product is on the shelves, the sales take on really quickly. B2B transactions take longer since there are many steps involved in getting the product out, pitching it to the businesses, having their approval, and getting them to buy the products. Then, the payment methods take pretty long as well.
Should Your Business be Focusing on B2B or B2C?
Now that you know the similarities and differences between both these business models, you can choose one that appeals to you the most. What do you want to sell, and how would you like to sell it? Do you want to work and make more minor sales every day or more extensive sales every few months? Is your product relevant for the general public, or is it more valuable as a raw material for another manufacturing company?
Start Focusing on B2B or B2C
B2B sales are generally more challenging, but they are more prominent in scale and have more potential to be lucrative. On the other hand, if you want to target your customers directly and sell your product first-hand, a B2C business model would be much more ideal for you.
It is also important to remember that you sometimes don’t need to choose one of these marketing and business techniques; you could do both! A classic example would be Google because it serves businesses and individual customers. Another important and famous example is Amazon, which was listed above as a B2B company, but, frankly, it is just as equally a B2C model now. It approaches its customers directly, but other businesses can also use it to sell their products. So, depending on how well you plan your business, you can choose one of these or both.
Final Verdict about Focusing on B2B or B2C
B2B and B2C businesses are all around us; we just don’t know much about them since we often lack basic knowledge. Now that you are equipped with all this information, you can make a thoughtful choice and plan your business moves accordingly. Knowing your exact business model and identifying your target audience helps you aim your product at the right people and plan your marketing strategies accordingly. It helps you speed up the process of money-making and saves you from all the errors you were going to make in the process of learning. Whether you choose one or the other, best of luck! Just be aware that you should choose if your business wants to be focusing on B2B or B2C?
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