Difference Between B2B and B2C
Posted 25-May-2006 03:13 AM
I’m doing my masters about the implementation CRM into company which sells products to other companys (B2B). I would like to know the steps of implementation and the difference between CRM in B2B and CRM in B2C firms.
Posted 10-Jun-2006 07:58 AM
hi! have you found an answer to your question? Let me know. Thanks in advance
Posted 18-Sep-2006 01:21 PM
The answer to your question depends on the type of CRM solution being implemented. Whether the company is selling in a B2B or B2C market, implementation could be as simple as signing up for a web based, vendor hosted solution. If the CRM solution is going to be deployed on premise (owned and operated by the company vs. hosted by the vendor) then there could be a multitude of implementation issues. But most will not be related to whether the company is in a B2B or B2C market, they will be related to the installation, customization, and deployment of the product, and training of the sales and marketing staff.
The primary differences related to the market (B2B vs. B2C) are the type of information collected in the CRM system and the functional requirements, not so much the implementation.
In a B2B environment it is necessary to have a data base structure that provides for the concepts of Accounts (companies) and Contacts (employees). In most B2B environments there are multiple constituents involved in the buying process so the CRM system needs to be able to establish permanent relationships between a single company and multiple employees. Often in the B2B environment there are also multiple sales processes that could be active within a single account at the same time, perhaps being managed by multiple sales people or sales teams. In this case the CRM system needs to be set up in such a way to allow for multiple sales processes to be related to a single account or company an have the ability to either allow or disallow sales people and/or sales teams to share visibility into the relevant customer information. In the B2B market, it is also important for the data base to be able to establish relationships between the main HQ account and subsidiaries. Specific types of information need to be collected that are not relevant in the B2C environment such as the company web site, the management hierarchy (who reports to whom), who is the assistant of the buyer and what is his/her contact information, etc. The CRM should be able to store information about the industry of the prospect. It may be important to know the company’s legal status, credit rating, tax identification number, etc. There are other distinctions as well but these are a few of the main requirements for a CRM system used in a B2B market.
In the B2C environment, Accounts (companies) and Contacts (employees within the company) don’t make any sense, nor does collecting a lot of information as described above. In the B2C environment some of the key considerations are the distribution of leads to a widely distributed sales force and the tracking of the progress of those leads. Many B2C sales organizations such as Real Estate, Financial Services, Health Care, Mortgage Brokers, and MLM organizations sell through independent sales agents or highly decentralized sales forces due to the large target audience and geographic segmentation of the market. They also tend to buy leads from other sources so measuring the effectiveness of the source and the effectiveness of the sales force is very important (you don’t want to by leads again from a bad source and, since you are paying for the leads, you don’t want to distribute them to non-performing sales agents). So lead distribution, lead tracking, activity tracking, close rates, forecasts and pipeline line management become critical (as is also the case in the B2B, but more so perhaps in the B2C because the disconnected nature of the independent sales agent network). There is also a completely different set of customer information that needs to be collected, namely personal information as opposed to company information, like the spouses name, how many children they have, financial information etc., the type of product or service the consumer is interested in. In the financial services market for example, there are hundreds of potential products and suppliers that an independent agent may represent.
So, in summary, I don’t think the implementation issues are necessarily any different whether selling into a B2B or B2C environment; it is really more a question of the usage and suitability (functionality) of the CRM solution itself that is most important.
I hope this helps.
Let me know if you have any specific follow up questions.
Co-Founder AppShore Inc.
Posted 26-Sep-2006 11:43 PM
You say it is necessary in a B2B environment to have the concept of Accounts but what if the Accounts with whom you collaborate also have own customer base ie B2B2B (or B2B2C)framework. How then should the database be structured? For example, an automotive manufacturer distributes its cars to resellers who then sell on the the end-user.
In such case, the car manufacturer would surely want to maintain a relationship with reseller and end user. What structure would you recommend to facilitate such an environment pls?
Posted 01-Oct-2006 09:30 AM
Resellers, suppliers, distributors, partners and competitors are all other types of accounts. Virtually every CRM system is built on relational data base technology which makes it easy to establish the supply chain relationships. These accounts are labeled accordingly in the account record and can then be searched and filtered appropriately.
Which brings up another key point in the distinction between the B2C and B2B sales environments, namely activity management vs. process management.
In the B2B sale, there is generally a higher degree of process management involved because the sale is typically more complex. The sales cycles are usually weeks, if not months, in length. There may be multiple sales resources assigned to an account (telemarketing, telesales, pre-sales technical support, the sales person, administrative support, the sales manager, etc.). In addition to the potential for suppliers, distributors and resellers, there are usually multiple constituents within the customer account that need to be involved in the decision making process. Therefore, in the B2B environment there is often a greater need for effective sales management and oversight to ensure the proper process is being followed. Due to the higher cost of goods sold, it is essential to have a well understood and consistent sales process that will reduce the possibility of wasted effort. The best sales process is the one which has been demonstrated in the past to be the most effective for the particular product or service being sold.
In the B2C environment, there is generally a much shorter sales cycle, a very concise sales process, (Yes or No and move on), a single buyer, a flat supply chain, and no justification for multiple sales resources to be involved. Therefore activity management (how people did you speak to today) becomes a much more critical success factor.
Co-Founder AppShore Inc.