B2B vs B2C: 7 key differences you should know

Alibaba.com SEPTEMBER 28, 202110 MIN READ
B2B vs B2C: 7 key differences you should know

B2B vs B2C is one of the critical marketing decisions you will have to make When you’re entering into e-commerce or business in general. You may have wondered what these terms mean or how you can leverage your understanding of their differences to ensure the business you set up runs effectively.

In this article, we’ll look at some key differences between the B2B and B2C business models and how they affect the approach you’ll take in sales, marketing, customer acquisition, and customer relationship management strategies.

Grasping the key points in B2B vs. B2C buying cycles, customer lifecycles, buyers, and chains of command will allow you to make the right decisions for your business and apply effective marketing strategies that enable your business to meet its long-term goals.

B2B Meaning and its examples

Business-to-business or B2B marketing is a form of commercial transition or business mode. This refers to businesses that primarily sell their products or services to other businesses rather than end consumers.

This means that all marketing and B2B sales strategies are targeted toward individuals or procurement officers who make product purchases on behalf of the companies they represent rather than making these purchases for themselves.

Examples of B2B commerce include:

  • Office furniture brand that specializes in selling furniture to businesses.
  • Corporate branding print-on-demand company that targets corporate customers and sells branded corporate wear.
  • Heavy machinery manufacturer that sells machinery to construction firms.

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B2C meaning and its examples

B2C is a business model that stands for “Business-to-consumer” and refers to the process of selling products or services directly from a business to individual consumers. This process typically bypasses third-party retailers, wholesalers, or other intermediaries to engage directly with the end consumer.

When it comes to marketing and sales approaches, all efforts are targeted toward getting the attention of these end users and providing products and services that can be considered solutions within their everyday lives.

Examples of B2C commerce:

  • An online dropshipping store that sells phone accessories directly 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 garments and bedding directly to customers through their store on AliExpress.

B2B vs B2C eCommerce: 7 key differences

Now that we have an idea of what B2B and B2C mean, let’s take a closer look at the differences between the two business models. Also, we’ll consider how they present themselves in various business functions such as sales, marketing, and customer relation management.

1. Marketing approach, reliable vs relatable

The way marketing is conducted for B2B and B2C is quite different. Marketers not only have to engage with audiences differently, but at times, they use other channels altogether.

For instance, because prospecting is directed toward customers, B2C companies can target customers on social media platforms such as Facebook, Instagram, and Twitter. However, to make B2B sales, brands may have to use platforms targeted toward professionals, such as LinkedIn, where they will likely be able to reach procurement officers or other company representatives.

There are also differences within the marketing content itself. Regarding B2B marketing, brands need to market themselves as reliable, whereas B2C brands need to sell themselves as relatable.

B2B buyers usually seek to make high-volume purchases and often need to sign long-term contracts. Therefore, they will be looking to engage with companies perceived as having strong knowledge in their area of specialization and high credibility to ensure that they can deliver on high-value purchases.

In B2C marketing, on the other hand, customers seek out brands that they feel align with their own identity and values. Specifically, consumers look for brand messaging and branding that feels consistent with how they see themselves. This is because customers are increasingly seeking to make emotional connections with brands as opposed to merely transactional ones.1

Marketing approach, reliable vs relatable

2. Customer acquisition strategy, educating vs engaging

B2B sales tend to have a limited niche market for their customers, compared to B2C businesses with a larger-scale market. Consequently, B2B businesses need to have a full understanding of their target markets and the specific demographics and purchasing habits associated with them.

Lead generation is crucial to these businesses, so marketers will build strategies with a top-of-funnel prospect list with customers looking to be educated about a product before purchase.

The B2C business approach involves following the entire marketing funnel. They work with larger-scale markets, so the target is more massive. Customer acquisition strategies will emphasize driving emotion-driven, product-driven, and attention-grabbing advertisements rather than educational ones.

3. Chains of command, long vs short

One obvious thing in B2C vs. B2B is the difference in chains of command. This is very important to know as it influences their respective purchasing decisions.

The B2B chain of command is much longer and could include entire departments, such as procurement and accounting, and their different department heads or the CEO for approvals before making purchases.

This is different from the B2C, which usually involves the individual end user, or at most, their immediate family members and friends. Due to shorter chains of command, B2C customers will likely be able to make rapid purchase choices. Marketing to one person is easier and less complex than marketing to entities with multiple stakeholders.

4. Different information required, logic vs emotions

In continuing the difference in chains of command, different amounts of information are necessary for the two types of customers. B2B customers love being educated about a product before buying.

This means that marketing communications need to appeal to logic and have detailed specifications highlighting what the products will do for the B2B customer’s business and what they can’t do. B2B customers want to have a firm grasp of the reaches and limits of products so they feel they have made well-informed, logic-based decisions when purchasing.

In contrast, B2C customers need to feel emotionally good about the products before purchasing. As these customers are looking for relatability, they will want to know how their needs will be met and how their pain points will be alleviated. Thus, B2C marketers have to use emotional and personalized selling solutions when compelling customers to make purchases.

5. B2B marketing vs B2C marketing buying cycle

B2B and B2C buying cycles are also different because of different decision-making processes. The B2B buying cycle is typically much longer than the B2C because more lead nurturing is required for B2B.

B2B salespeople have to pay special attention to user experience because the purchasing decisions made for the products are often made considering the potential customer's company-wide long-term goals.

This means that specific content needs to be created to address the different stages of B2B buying cycles, and patience has to be employed throughout as this process may take up to months.

B2C buying cycles are often much shorter, with conversions being made quite quickly. This puts a lot of weight on the effectiveness of marketing content or return on investment (ROI). There is also greater emphasis on urgency with direct calls to action for customers to urgently “PURCHASE NOW!” or “GET YOURS NOW!”

6. B2B vs B2C product management and customer lifecycle

B2B customers often prefer consistency and stability when purchasing products for their business. As a result, B2B procurement frequently involves signing supply contracts with the same supplier that last multiple financial periods. The goal is to standardize costs over an extended length of time, which may range from several months to numerous years.

This leads to the establishment of long-term relationships between vendors and B2B customers. Customers have longer lifecycles as repeat buyers due to contractually established loyalty to vendors.

However, this is different for B2C purchases, which are made by individuals who typically make low-volume, one-off purchases. Individuals often have a wide range of retail options and can easily and quickly switch to another brand, thus shortening their lifecycle.

B2C marketers need to work to establish customer loyalty and encourage repeat purchases. This is done using customer retention strategies such as loyalty programs to keep customers buying with the brand.

7. Customer relationship management, customer service vs account management

Another key difference in B2B vs B2C marketing involves relationships with customers over time. B2C businesses tend to offer customer service, while B2B companies offer account management.

Because B2B customers typically have contracts with the vendors and engage with them on a long-term basis, personal relationships are built. Customers are considered accounts managed or nurtured by designated Account Managers who are often known by the customer and know the customer by name.

With B2C marketing, things are a little different. While purchasing decisions are emotionally driven, customer relationships tend to be transactional. Because of their larger market and customer bases, B2C companies cannot always know customers by name. They will use customer relationship management (CRM) software such as Salesforce to manage post-sales queries from customers generically and impersonally.

Customer relationship management,customer service vs account management

B2B vs B2C: Which is better?

Knowing the key differences between B2B and B2C helps you make the right decisions for your business. The answer to which of the two is better comes down to your expertise and preferences.

Looking at the differences, you will need to consider your capacity for managing each function required to run a successful B2B or B2C enterprise.

Go through all the differences and see how your business stacks up to understand which direction to go and what tools and strategies to employ.

Frequently asked questions

1. Is Alibaba.com B2B or B2C?

Alibaba.com is one of the biggest global B2B eCommerce platforms. The giant marketplace has an extensive product range, 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 fulfillment to get their products to customers.

2. What are the disadvantages of B2B?

B2B marketing has many cons, including:

  • Limited market because of smaller buying pool
  • Longer purchase decision time that can stretch over months
  • Longer chains of command result in having to sell to multiple stakeholders

3. What are the disadvantages of B2C?

Like B2B, B2C marketing also has its demerits, including:

  • B2C tends to have lower order volume and lower frequency of purchase
  • Because there are no contracts, it’s not as easy to retain customers over time
  • A larger market makes competition very steep

4. How do I sell on Alibaba.com?

  • Custom storefront: Easily set up a customized store that showcases your products and brand identity. You can upload your product images, logos, and unique storefront banners.
  • Advertising tools: Using a varied range of smart advertising tools, you can get your store’s products placed in the right advertising spots on the platform to increase exposure by up to 120%.2
  • Data and analytics: Optimize your operations using in-depth data and customer insights provided on your Alibaba.com dashboard to help improve your business’ performance. You can get information on product exposure, customer spending, click volume, average cost, and store visits.
  • Customer support: Get onboarding help and account optimization tips as you start, and online support chats, and your account manager will always help you throughout your journey.
  • Learn more here!

Final thoughts

Now that you have a more profound knowledge of the B2B vs B2C key differences, you will have better insight into the different approaches that can be considered and applied when it comes to your business.

Understand the type of buying cycle, customer lifecycle, and chain of command your customers have, as this will inform the marketing approach, customer acquisition strategy, and customer relationship management model applied to your business.

Successful application means that you’ll be able to establish longer, meaningful relationships with your customers, with knowledge on how to meet their needs and cultivate loyalty. Now you’re ready to start selling! Find out more on how you can start selling on Alibaba.com today.

1. https://www.business.com/articles/emotionally-connecting-with-customers/
2. https://seller.alibaba.com/