In order to define B2B, B2C has to be defined. These are two very different business models, requiring different skills, disciplines and mind-sets. Organisations should never attempt to run with both without splitting the organisation. B2C is where there is a buyer and a seller and they meet at the point of sale. The point of sale could be a store or a restaurant or a call centre or on-line. And at the point of sale there is an interaction, or an experience.
In B2B there isn’t a ‘point of sale’.
In B2B there is a relationship. It is a developing relationship. In the honeymoon period, all should be going well. Later, things could go wrong (and often do). Or they could flourish and blossom, with trust, mutual respect, common goals, partnering, shared resources, making plans together and celebrating successes together.
The term B2B can be confusing. An online business that sells office chairs purely on price is not in B2B even though it is one business selling to another. Why? Because there is no relationship and no added value services. The old adage that if it looks like a duck and sounds like a duck then it probably is a duck doesn’t work here.
Once the difference is clearly understood – a point of sale is B2C and a long-term relationship is B2B – then other issues such as the roles of Key Account Management and CRM (B2B); and the roles of the Net Promoter Score and CXM (B2C) become easier to understand.
InfoQuest customer satisfaction surveys are the ideal solution for B2B relationship audits, but are inappropriate for B2C. Two years ago I had a cold call from someone wanting to conduct a customer survey. They said that they’d been on our website and liked what they’d seen. I asked where they were calling from and they said “Toyota”. I said “I’m sorry, but we don’t do B2C” and they said “Oh, we’re Toyota Material Handling – you know, fork lift trucks”. Ah-ha. Toyota Material Handling are the essence of B2B – strong relationships; solutions to problems; joint-ventures designing new warehouses; joint development and testing of new products. Yes, we got the survey.
Earlier I said that organisations should never run B2B and B2C together. Let me give you a couple of examples of how the two models are split out in real life.
Example 1 Business machines such as franking machines and mail-room equipment.
A firm of lawyers or a marketing agency needs to send documents in the post. They have a franking machine. If it breaks down then, for a few days, they can get by if they use stamps from the post office. They don’t have a relationship with the manufacturer of the franking machine and they would fall under the B2C model. A utility company or a bank needs to get statements sent out to customers. The statements might be three, four or five pages long depending on how many phone calls have been made or how many times the credit card has been used. The company may have two or more machines in the mail-room that can collate and fold the statements and put them into an envelope. Getting the statements muddled between customers would be bad. And if there is a problem with a machine then it would be terrible. (The manufacturer of the mail-room equipment might even have engineering staff permanently situated at the client’s premises). Here there IS a relationship. The equipment is business critical. And it is B2B. The manufacturer of the machines needs two separate teams for both sales and service. The two separate teams need different systems, disciplines and mindsets in order to be customer focussed and successful.
Example 2 Insurance
Most insurance company activity would be classed as B2C, including motor, house and small business. However, property developers, ship owners and big businesses have specialist needs and will employ risk managers to liaise with their insurance companies in order to keep the insurance cover at appropriate levels at all times. And this is where the B2B relationships comes in. Insurance companies will have dedicated teams to look after these customers. When you add the insurance broker into the frame then the difference becomes clearer. The B2C relationship between customer, broker and insurer is linear whereas the specialist B2B relationship between customer, broker and insurer is triangular or circular.
One more example is the difference between accountancy practices and law firms. Accountants will have a long-term relationship with their client, helping with annual audits, tax returns, ongoing statutory reporting, mergers and acquisitions. Which is very much a B2B relationship. Lawyers on the other hand tend to work on one-off, discreet projects. “I want to call my lawyer” is the cry of a serial offender and tends to be exceptional (apart from on TV). InfoQuest helps a large number of accountancy firms, on both sides of the Atlantic, to audit their most valuable asset – their customer base. But we don’t work with law firms.
Hello!
John, I am totally agreed with you that there is a discrepancy between B2B and B2C business strategies. However, if we are going to market your B2B or B2C business, then the marketing plan still encompasses the same types of procedures and activities. So, how can we differentiate the marketing process of both B2b and B2C?
Hello Shanon,
Its a very good question. Or, in other words, I have no idea. No idea how you would differentiate the marketing process, or even if you should.
I am not a marketing person. But I have heard marketing experts (I was listening to one just 20 minutes ago, and it is a snowy Saturday afternoon) say that marketing to B2B is exactly the same as marketing to B2C.
My favourite definition of marketing is “selling something to someone without the aid of a salesperson”.
I watched a TV programme last week where two sales people swapped jobs for a week. Both people sold second-hand cars. One sold in the £4,000 – £6,000 range to people who needed transport. The other sold £100,000 – £5,000,000 to people looking for an investment. It was fascinating watching these two develop over the week. The low-range sell was providing an instant solution to a problem. The high-range sell was offering an investment of the highest quality.
In your marketing process I assume that you would be identifying what the market wants, in all the segments that you operate in, and then treating each person as an individual, whether they are buying for themselves or whether they are part of a team where the team makes the decision.
What do you think, Shanon?