B2B vs B2C: 7 Key Differences You Should Know About

 When you get into e-commerce, or in business in general, you will often come across two terms - B2B and B2C. You may have wondered what these terms mean, or how you can use your understanding of the differences between them to ensure the business you are setting up is running effectively.

In this article, we'll take a look at some of the key differences between B2B and B2C business models and how they affect approaches to sales, marketing, and customer acquisition, and customer relationship management.

Understanding the key differences in B2B and B2C purchase cycles, customer life cycles, buyers, and chains of command will enable you to make the right decisions for your business and employ effective strategies that will enable your business to achieve its long-term goals.

    What does B2B mean?

    B2B is a form of commercial transition or a business model that stands for “business-to-business”. This refers to companies that sell their products or services primarily to other companies rather than to end-users.

    This means that all marketing and sales strategies are aimed at individuals or purchasing agents who make product purchases on behalf of the companies they represent, rather than making those purchases for themselves.

    Examples of B2B commerce:

    • Office furniture brand specializing in selling furniture to businesses.
    • Corporate branding print-on-demand company targeting corporate clients and selling branded clothing.
    • Heavy machinery manufacturer who sells machinery to construction companies.

    What does B2C mean?

    B2C is another business model that stands for "Business-to-Consumer" and refers to the sale of products or services directly from a company to individual consumers. This process usually bypasses third-party dealers, wholesalers, or other middlemen in order to get in direct contact with the end-user.

    In marketing and sales approaches, all efforts are aimed at grabbing the attention of these end-users and offering products and services that can be viewed as everyday solutions.

    Examples for B2C commerce:

    • An online dropshipping store that sells phone accessories direct to individuals.
    • A retail store that sells home fitness equipment, such as free weights and resistance bands, to fitness enthusiasts.
    • An online textile company that sells clothing and bedding to customers directly through its shop on AliExpress.

    7 key differences between B2B & B2C

    Now that we have an idea of what B2B and B2C mean, let's take a closer look at the differences between these business models and how they present themselves in different business functions such as sales, marketing, and customer relationship management.

    1. Marketing approach, reliable vs. relatable

    The way marketing is done for B2B and B2C is quite different. Not only do marketers have to interact with audiences in different ways, but they also sometimes use very different channels.

    Since targeting is done directly on customers, for example, B2C companies can target customers on social media platforms such as Facebook, Instagram, and Twitter, as they can find their customers there. However, in order to reach B2B customers, brands may need to use platforms geared towards professionals like LinkedIn, where they can likely reach purchasing agents or other company representatives.

    There are also differences within the marketing content itself. When it comes to B2B marketing, brands need to market themselves as reliable, while in B2C they need to market themselves as relatable.

    B2B customers typically want to make large purchases and sometimes want to sign long-term contracts. Because of this, they will try to get in touch with companies that have in-depth knowledge and high credibility in their specialty to ensure that they are able to meet the high-quality purchases.

    When selling to B2C end consumers, customers look for brands that relate to them and whose brand messages and identities are perceived as congruent with their own. Because customers are increasingly looking for emotional connections to brands instead of purely transactional ones. [1]

    2. Customer acquisition strategy, educational vs. engaging

    B2B companies tend to have a limited niche market when it comes to their customers as opposed to B2C companies which have a larger market. Therefore, B2B companies need to fully understand their target markets and the specific demographics and buying habits associated with them.

    Lead generation is very important to these companies, so marketers develop lead generation strategies that have a top-of-funnel list of prospects that customers want to know about a product before they buy.

    B2C companies take the approach of following the entire marketing funnel. You work with larger markets and therefore the goal is a little wider. Customer acquisition strategies will focus on serving ads that are emotional, product-centric, and attention-grabbing, as opposed to educational.

    3. Chains of command, long vs. short

    One obvious difference between B2B and B2C companies is that they have very different chains of command. This is very important to know as it affects their respective buying decisions.

    The B2B chain of command is significantly longer and can encompass entire departments such as purchasing, accounting, and their various department heads or the CEO for purchasing approvals to be issued.

    This differs from B2C, which usually involves the individual end-user or at most their immediate family members and friends. With shorter chains of command, B2C customers will likely be able to make very quick purchase decisions. Marketing to one person is certainly easier and less complex than marketing to companies that involve multiple stakeholders.

    4. Different information required, logic vs. emotion

    Based on the different chains of command, different amounts of information are required for the two types of customers. B2B customers usually want to find out about a product before buying.

    This means that marketing communications must address logically and contain detailed specifications that describe in detail what the products can and do not do for the B2B customer's business. B2B customers want to have a close eye on the range and limits of products so that when they buy, they feel like they have made well-informed, logic-based decisions.

    In contrast, B2C customers need to feel good emotionally about the products before making a purchase. Since these customers are looking for reliability, they want to know how their needs are being met and how their vulnerabilities are being alleviated. Therefore, B2C marketers need to use emotional and personalized sales solutions to get customers to buy.

    5. B2B buying cycles are longer than B2C

    B2B and B2C buying cycles also differ due to different decision-making processes. The B2B buy cycle is typically much longer than the B2C buy cycle because B2B requires a lot more lead nurturing.

    B2B sellers need to pay special attention to the user experience, as the purchase decisions for the products are often made with the company-wide long-term goals of the potential customer in mind.

    This means that specific content needs to be created to address the different stages of the B2B buying cycle and that patience needs to be exercised throughout the process as this process can take up to months.

    B2C purchase cycles are often much shorter because conversions happen quite quickly. This places great emphasis on the effectiveness or return on investment (ROI) of marketing content. The immediacy is also emphasized by direct calls to the customer to urgently “BUY NOW!”. or "GET IT NOW!"

    6. Customer lifecycle, long term vs. short term

    When B2B customers source products, they tend to use the same supplier over long periods of time to keep their spending constant over their financial periods. For this reason, supply contracts are concluded that can last between months and years.

    This leads to building long-term relationships between vendors and B2B customers. Due to the contractually based loyalty to the providers, customers have longer life cycles than repeat buyers.

    This is different from B2C purchases made by individuals who typically make one-time, low-volume purchases. Oftentimes, individuals have a wide range of retail options to choose from and can easily and quickly switch to a different brand, shortening their life cycle.

    B2C marketers need to work on building loyalty and driving repeat purchases. It does this through the use of loyalty strategies like loyalty programs to get customers to buy with the brand.

    7. Customer relationship management, customer service vs. account management

    Another key difference between B2B and B2C is the way that relationships with customers are managed over time. B2C companies typically offer customer service while B2B companies offer account management.

    Since B2B customers usually have contracts with the providers and work with them over the long term, personal relationships are built up. Customers are considered to be accounts that are administered or maintained by specific customer service representatives who are often known to the customer and who know the customer by name.

    Things are a little different with B2C. While purchasing decisions are emotionally driven, relationships with customers are more transactional. Due to their larger market and customer base, B2C companies cannot always know customers by name and use customer relationship management (CRM) software like Salesforce to manage customer inquiries in a general and impersonal way.

    B2B vs B2C: which is better?

    Knowing the key differences between B2B and B2C can help you make the right decisions for your business. The answer to which of the two is better is yours.

    As you look at the differences, you need to consider your capacity to manage each of the various functions required to run a successful B2B or B2C business.

    Go through all of the differences and see how your business is doing to get an idea of which direction to go and which tools and strategies to use.

    frequently asked Questions

    1. Is Alibaba.com B2B or B2C?

    Alibaba.com is one of the largest global B2B e-commerce platforms The e-commerce platform has an extensive range of products, making it a great place for small businesses to source their supplies from manufacturers and retailers. Retailers can easily set up their stores and manage their pricing and order processing to get their products to customers.

    2. What are the disadvantages of B2B?

    • Limited market due to smaller purchasing pool
    • Longer purchase decision time, which can extend over months
    • Longer chains of command mean that you have to sell to multiple stakeholders

    3. What are the disadvantages of B2C?

    • B2C tends to have a lower order volume and a lower purchase frequency
    • Since there are no contracts, it is not so easy to retain customers over time
    • A bigger market makes competition very stiff

    4. How do I sell on Alibaba.com?

    • Custom Storefront: Easily set up a custom store that showcases your products and brand identity. You can upload your product images, logos, and unique storefront banners.
    • Advertising tools: With a variety of intelligent advertising tools, you can place the products of your shop in the right commercials on the platform in order to increase the presence by up to 120%. [2]
    • Data and Analytics: Optimize your operations with detailed data and customer insights provided on your Alibaba.com dashboard to improve your company's performance. You can get information on product presence, customer spending, click volume, average cost, and store visits.
    • Customer Support: Get onboarding help and account optimization tips to get you started. Online support chats and your account manager will always be with you throughout your journey.

    Final thoughts

    Now that you have an idea of the key differences between B2B and B2C, this will give you a better understanding of the different approaches that can be considered and used for your business.

    Knowing what type of purchase cycle, customer lifecycle, and chain of command your customers have, as this, will affect the marketing approach, customer acquisition strategy, and customer relationship management model for your business.

    A successful application means that you are able to build longer, meaningful relationships with your customers, knowing how to meet and retain their needs. Now you can start selling!