The terms B2B and B2C were coined to differentiate e-commerce companies that sold primarily to consumers from those whose market are other businesses. Some people involved in business can't even see differences between B2B and B2C marketing. After all, selling is selling and marketing is marketing. No matter if you sell your products or services to a national corporation or to John down the street, you ultimately sell to humans.

While certain marketing techniques work equally well both in B2B and in B2C contexts, it is politically incorrect to assume that there are no differences between B2B and B2C marketing. Differences are deep and complex and if you ignore them, your business will be doomed for failure.

But let's make things simple. In order to analyze those differences, let's look at some facts, which are easy to observe and easy to check against the reality.


Businesses and Consumers Buy Different Products and Services

Sometimes both businesses and consumers buy the same products and services. However, often, the products and services bought by businesses and consumers are different. This can be easily explained. Consumers are usually the end-users, while businesses acquire many products and services for their business processes. You buy milk and so does B en & Jerry's Homemade. But you are the one who consumes that milk, while Ben and Jerry's Homemade use the milk to produce ice-cream. On the other hand, there are not many business that buy tooth-paste, while you can hardly ever find a person who doesn't buy it. Likewise, I seriously doubt you have bought or will ever buy many of the products purchased by such companies as General Motors, General Electric, Apple, Coca-Cola and other large, medium and small businesses. Please note that the size of the business does not always determine the nature of the products bought by businesses. There are many really small companies that purchase products that many of us have not even heard of.


Quantities Purchased by Businesses and Consumers Are Different

Even when both businesses and consumers buy the same products, they do so in different quantities. Getting back to the example above, both you and Ben & Jerry's Homemade buy milk. However, while you may buy a couple of liter's per week, Ben and Jerry's Homemade's weekly purchases probably measure in tons. You can observe many other examples. You may have several computers in your household, however even a very small company may have more computers.

However, because businesses usually consume products in larger quantities, don't be fooled to think that you can sell more by targeting to businesses. While Ben and Jerry's purchases more milk than any one person can do, there are not MANY ice-cream producers (or other milk-consuming businesses), however, there are many, too many people who consume milk.


Deal With Few or Deal With Many

Usually B2C companies have many customers, while companies whose primary market are other businesses have few customers. There are exceptions to everything, though. Microsoft, has a lot of business customers and while most (if not all) buyers of Bugatti Veiron are end-consumers, I doubt there to be many of them. However, a general idea is that when you are a B2B company, you deal with few customers and if you are a B2C company, you cater to a lot of consumers.


Dollar Value of a Purchase

Even when businesses and consumers buy the same products, usually the dollar amount of the transaction will be different. You may buy a PC for $1,000 but when Google buys 1,000 of such computers, it makes the deal a million dollar one.

Please note that in this post, I will be reviewing some fundamental differences between B2B and B2C natures of businesses. Only after giving a careful thought to the facts below can we see what makes B2B and B2C marketing different. So, let's start.


Nature of Purchase Decision Making

As a rule purchasing decisions made by businesses are more rational buying decisions than those made by end-consumers. At the same time, purchasing decisions made by consumers are emotional based on status, desire, price, etc. However, this is not always true. Sometimes businesses make wrong purchasing decisions and consumers do pretty well on that end. In our complex world, with many alternative products, it has become very difficult to make right purchasing decisions. However, at the same time, the advent of the Internet made it easy to do quick research prior to purchasing a certain product. A quick example. From the last 20 books that I've bought on Amazon only one turned out to be under my expectations.


Influencers and Real Decision Makers

The person sitting in front of you might not be the one who has made the purchase decision. Usually, purchasing decision made by businesses are affected by multiple influencers. This is also true with some of the purchasing decisions made by end-consumers. For example, you don't buy a house spontaneously or choose a college without consulting with friends, relatives, etc. When it comes to less expensive things, most of the decisions made by end-consumers are automatic and spontaneous. Of course, businesses also automate purchasing decisions, but again, most of the purchasing decisions are influenced by more people than the purchasing decisions made by end-consumers.


Sales Cycle Are Different

Usually sales cycle are longer with businesses than with end consumers. Are you already running Windows Vista on your PC? Pretty safe to assume. However, there are many businesses that still use Win 95 and are pretty happy with that. So, you see the morale here. A business may not care at all if their vehicle is 10 year old. As long as it does the job fine, they won't replace it. However, we, end-consumers, would like to drive the latest models of cars. The same goes for other things like mobile-phones, computers, etc.


Relationship Driven vs. Product Driven

Businesses that sell to other businesses try to maximize the value of a relationship and use it as a means to maximize profits. Businesses that sell to end-consumers try to maximize the value of a transaction. For example, if a company sells expensive, specialized software to other companies, it may take a couple of rounds of negotiations until the deal is finalized. This is rarely observed with B2C businesses. Again, there are plenty of exceptions here. For example, when buying a house or an expensive car, it may take some negotiation but with most of the products purchased by end-users, the transaction goes without any negotiation at all. With B2B transactions, most of the transactions are pre-negotiated.

These are the fundamental differences between B2B and B2C companies. As you see, while there are many commonalities, the differences are deep too. Therefore, we can now safely assume that B2B and B2C marketing require different approaches and techniques. More about this will be coming in one of the next posts.