B2B:

• Relationship driven
• Maximize the value of the relationship
• Small, focused target market
• Multi-step buying process, longer sales cycle
• Brand identity created on personal relationship
• Educational and awareness building activities
• Rational buying decision based on business value

B2C:

• Product driven
• Maximize the value of the transaction
• Large target market
• Single step buying process, shorter sales cycle
• Brand identity created through repetition and imagery
• Merchandising and point of purchase activities
• Emotional buying decision based on status, desire, or price

This weekend I got an email from a graduate student at Virginia Commonwealth University with questions about these comparisons for a project for her marketing class. I’m always glad to help students learning marketing so I sent her the following response to her questions.

What does it mean for B2B marketing to be relationship driven, maximizing the value of the relationship verses B2C marketing being product driven, maximizing the value of the transaction?

The goal of B2B marketing is to maximize the value of the relationship to the prospect through marketing efforts that educate them on value you provide. If done successfully, your marketing activities will result in a relationship built on trust and credibility. Value of the relationship will be determined by what is important to the client.

The goal of B2C marketing is to drive consumers to the product and maximize the value of the transaction through activities that upsell or provide incentives to buy additional products. Relationships between companies and consumers are based on the consumer’s experience during the purchase process. Value of the transaction will be determined by the quality of the experience or the transaction.

What does it mean to create a brand identity based on the personal relationship in B2B verses through repetition and imagery in B2C?

In B2B marketing, the brand is based on your reputation. So although B2B marketers develop brand awareness through marketing efforts, the brand identity is based on how how you treat clients, the quality of the work, how reliable you are, and other factors that provide value to the clients.

In B2C marketing, companies build brands by repeatedly getting the image in front of the consumer. Consumer products need to ensure we see their brand enough times to recognize it and consider it worthy of our purchase.

How has social media changed the landscape of B2B verses B2C marketing?

Social media has effected how brands are perceived across all of marketing, but it is more pronounced in B2C today. Developing relationships with consumers is now more important than ever and consumer marketing needs to understand how user generated content effects their brand and how to leverage new media to help them develop their brand identity and reputation.

Take Amazon as an example. They:

• Provide a purchase experience that encourages you to buy more.
• Build a relationship with you by personalizing your experience and making it extremely easy to do business with them.
• Add value through secure transactions.
• Develop user generated content by encouraging you to rate your purchase experience and the product.

This is all part of social media and how consumers are being influenced by their peers. It’s making B2C marketing more challenging but very interesting too. Will it have the same effect on B2B? Thoughts?

The new year rings in the annual forecast of many topics, including B2B marketing spend. According to BtoB magazine’s “2008 Marketing Priorities and Plans” study, most B2B marketers (some 60%) plan to increase their 2008 marketing budgets – but fully 79% plan to increase their online marketing budgets. This number is up from 76% from 2007 predictions.

This really doesn’t surprise me. Online marketing activities are effective, can be targeted more extensively and can be more easily measured than most traditional marketing activities. That doesn’t mean you stop using other parts of the marketing mix. If something is working, keep doing it. If not, stop. That same philosophy includes online marketing activities as well.

Other key findings of the survey include:

• 62% said their primary goal in 2008 would be customer acquisition, 19% cited brand awareness and nearly 12% pointed to customer retention.
• Online will constitute more than one-third (nearly 34%) of marketing budgets in 2008, up from the nearly 27% cited for 2007.
• Areas where marketers said budgets would increase include website development (74%); email (70%); search engine marketing (64%); video (40%); webcasting (39%); banners (36%); sponsorships (30%); and social media (26%).
• Nearly 20% say they are using social media as part of the marketing mix: Among them, 53.8% use them for thought leadership, 40.4% use them for customer feedback, 31% for market research, 29% for advertising, 27% as a sales channel.

Another tactic that will see a spending boost in 2008 is event marketing, with 49.5% of marketers planning budget increases in this area. I’ve seen this trend with some of my clients, moving towards smaller, more focused conferences that provide the best venue for speaking with prospects. Sales people still see value in meeting people face to face and building relationships.

For more information on the survey:

• BtoB Magazine Online
• Marketing Charts

Well, yeah they are people, but a person buying a product for themselves verses buying for their company is a very different, emotional experience. In fact, there are profound differences that you must remember when developing your marketing activities. B2B depends on relationship building marketing efforts. Using consumer-focused strategies to market your B2B business will, at best, just cost you money. And, in some cases, it may cost you customers.

What is B2B and B2C Marketing

These terms were coined to differentiate Internet commerce businesses that sold to primarily to consumers verses those whose market are other businesses. These terms have expanded their definitions to refer to any business who sells primarily to the end customer (B2C) or to other businesses (B2B), both online and offline. Although the marketing programs are the same for each type of business (events, direct marketing, internet marketing, advertising, public relations, word of mouth and alliances), how they are executed, what they say, and the outcome of the marketing activities differ.

The first step in developing your marketing strategy for B2B is similar to the first step in a B2C strategy: identify who the customer is and why they need to hear your message. From there, the marketing activities diverge.

The highlighted boxes summarize the differences between B2B marketing and B2C marketing. Your marketing plan needs to take into account the differences and ensure you are developing the right types of activities for your particular market.

Businesses that Sell to Consumers

The ultimate goal of B2C marketing is to convert shoppers into buyers as aggressively and consistently as possible. B2C companies employ more merchandising activities like coupons, displays, store fronts (both real and Internet) and offers to entice the target market to buy. B2C marketing campaigns are concerned with the transaction, are shorter in duration and need to capture the customer’s interest immediately. These campaigns often offer special deals, discounts, or vouchers that can be used both online and in the store. For example, the goal of an email campaign for a B2C company is to get consumers to buy the product immediately. The email will take the consumer to a landing page on the web site that is designed to sell the product and make purchasing very easy by integrating the shopping cart and checkout page into the flow of the transaction. Any more than a couple of clicks and the customer is likely to abandon the shopping cart.

One interesting aspect of B2C marketing, however, is that many companies have realized the importance of loyalty. Amazon, Best Buy, and Staples combine merchandising and education to keep customers coming back. Add great customer service, and you get a winning combination.

Businesses that Sell to Businesses

Although the goal of B2B marketing is to convert prospects into customers, the process is longer and more involved. A B2B company needs to focus on relationship building and communication using marketing activities that generate leads that can be nurtured during the sales cycle. B2B companies use marketing to educate various players in the target audience because the decision to purchase is usually a multi-step process involving more than one person. For example, the goal of an email campaign for B2B is to drive prospects to the web to learn about your products and services. The e-mail to a business must contain contact information for offline communications and the landing page should contain information on features, benefits, and possibly pricing. This marketing activity is usually the first step in a longer, integrated touch campaign that may include direct mail, telemarketing, Web casts, newsletters and follow up by sales representatives who will discuss the businesses requirements in more detail and move the prospect through the sales cycle. Content is king for B2B marketing and white papers, newsletters, and coverage of your products and services by the media helps companies educate their prospects.

The B2B Buyer vs. the B2C Buyer

The business buyer is sophisticated, understands your product or service better than you do, and wants or needs to buy products or services to help their company stay profitable, competitive, and successful. Marketing copy must talk to a sophisticated audience. Your typical reader has a high interest in – and understanding of – your product (or at least of the problem it solves). Therefore, writing marketing copy is more complex and requires research to ensure you deliver the necessary information to the buyer.

The B2C buyer is usually looking for the best price and will research the competition prior to shopping. Another factor that does come into play, however, is whether the buyer trusts the retail outlet, either the store front or on the Internet. Although you can find the products on the Internet at many different price points, many consumers will still buy from a trusted source. In that respect, B2C marketing needs to convince the person to buy and build trust and loyalty with their customers.

Both buyers are interested in quality customer service. B2B customer service comes into play prior to ever making that first sale and begins with a customer’s very first contact with your company, whether you call them or they call you. B2C customer service helps build customer loyalty where customers will be willing to pay a slightly higher price to know that they can return the product easily and can trust the source they are dealing with. In other words, customer service is critical and although may not be considered “marketing”, bad customer service can render all of your marketing efforts useless.

Importance of Brand

A strong brand is important to both the B2B and the B2C markets, but for different reasons. With B2C, a strong brand can encourage the consumer to buy, remain loyal and potentially pay a higher price. In B2B markets, brand will only help you be considered, not necessarily chosen.

Business buyers are using more rational thought when selecting a product or service for their company. They are motivated by saving money, increasing productivity or raising profitability. Consumers are motivated by desire, style and prestige. For consumers, brand plays into the equation since we are more apt to buy “status” brands, such as BMW, Lexus, Rolex or Nike even though we most likely will pay more for the brand. In businesses today, however, the adage “no one ever got fired for buying IBM” no longer rings true. This is not to say that a professionally developed brand is not important for a B2B business. A quality brand is needed in any business in order to make a good first impression, but putting excessive marketing dollars into building brand awareness is not what counts in your B2B marketing plan.

Plan Before You Begin to Market

The bottom line is that the difference between B2B and B2C marketing comes down to the buyers’ emotional perspective about the purchase. Consumers make buying decisions based on status, security, comfort and quality. Business buyers make buying decisions based on increasing profitability, reducing costs and enhancing productivity. If you are a B2B business offering products and services to other businesses, put your marketing dollars into marketing programs and materials that offer your target what they need to make a rational buying decision. Help them determine the value of the product and service you offer through quality materials, testimonials, and other activities that build credibility. If you are a B2C business, understand what motivates your buyer and the emotional aspect of the buying decision. Create compelling materials that build awareness for your brand, enhance their comfort in buying from you, and project quality service and best price. As you create your marketing plan for the coming year, remember what is important to your target audience and create your marketing programs to speak to them.