B2B and B2C e-commerce companies have similar basic goals: selling their products to their target customer bases. However, this superficial similarity disguises deeper differences. Because they focus on different types of customers, B2B and B2C firms need to have vastly different structures and organizational goals.
But e-commerce is e-commerce, right? Not exactly. Two companies involved in essentially the same business can have completely different organizations and corporate cultures, based solely on the market they are targeting. It’s about developing an institutional structure that best matches the customer base your firm is trying to reach.
In the case of a B2B businesses, they are primarily trying to cater to other companies. They thrive on large institutional orders, as well as ongoing fulfillment contracts. Meanwhile, B2C firms focus on individual consumers. They orient their approach to individuals, who are purchasing products for personal use. These firms work in smaller order sizes and try to achieve significant revenue levels through higher volume.
B2C Business Model: Developing a Broad Appeal
A Wide Market
To make money from a consumer-oriented business, you have to maintain sufficient volume. Think Walmart versus a small boutique. As such, your products and your marketing need to aim for the broadest possible appeal.
B2C companies can still provide highly-targeted products, or appeal to niche markets. But, overall, the main impetus tends toward drawing in a wide consumer base. Processes have to be streamlined and the mission has to be kept general.
Many Small Transactions
A consumer business rarely has those champagne moments. You know the ones: You and your team spend months preparing a bid, one that will completely change your revenue stream for the next several years. Finally, after a long, tense, drawn-out process, you find out that you landed the deal. Champagne all around.
In the B2C world, you don’t get many days like that. Instead, revenue accumulates through small regular chunks. For the most part, you make small sales, one at a time, rather than receiving a series of large-scale contracts.
Reaching a mass audience requires mass advertising. You have to blast out your message. You can’t rely on individual sales people building personal contacts.
Rather, you have to lean on the tactics of mass marketing. You have to remain active on social media and spend significant money on Google and Facebook. You have to build a brand that has a wide appeal and develop a consumer-friendly website designed to draw, and to handle, significant traffic.
Standardized Purchase Process
Because a B2C business survives on small frequent transactions, profit margins will depend on keeping costs down and on driving substantial volume. You can’t spend significant resources on any single sale or any one customer. Everything has to be streamlined in order to achieve maximum efficiency.
For these reasons, the checkout and consumer service apparatus for a B2C site need to be extremely streamlined. Items will require standardized pricing and the purchase process should be simple and self-explanatory.
B2B Business Model: The Personal Touch
Scoring large corporate accounts often comes down to individual sales people. Then, once you have landed a customer, you’ll have to expand significant effort maintaining that relationship. Ultimately, it comes down to personal connections – networking, essentially.
This represents a significant difference from the B2C model. Your B2B operation might have many small business customers who have minimal contact with your sales staff. But, at some level, you’ll need to maintain a set of sales professionals to woo larger clientele.
Pricing for consumer items has to fit a pre-determined mold. You can offer some standard discounts or price-breaks for volume, but, for the most part, each item will have a set price. This pattern doesn’t hold for a B2B business.
In the B2B paradigm, products might have list prices, which some (usually smaller) clients pay. However, for most larger corporate clients, you have to leave room for more flexibility. Prices and other deal components will usually involve detailed negotiation.
The word “sales” for a B2B business can also acquire a more expansive definition. The term might cover more than an individual product changing hand. Rather, it can refer to a long-term fulfillment contract, covering thousands of individual items, delivered over the course of years.
Every client is different. That’s true for consumers and it’s true for corporate clients. However, when you operate in the consumer space, there isn’t much room for personalized treatment. The average sale amount is usually too small to provide enough room for special requests or individual accommodation.
On the other hand, that kind of attention attains paramount importance when dealing with large corporate clients. You need to take the specific customer into account and do what you can to suit their special requests. As a result, your organization needs to remain flexible, able to accommodate a wider variety of situations.
You can achieve this in a number of ways. It can take the form of a stripped-down bureaucracy, where individual sales and operational employees are empowered to work with clients. They can then accommodate individual requests.
Increased flexibility can also come about as a result of a beefed-up technical infrastructure. A well-organized backend for your website can grant a lot of flexibility, without requiring significant input from your employees. Meanwhile, you can further improve your technical flexibility by leveraging AI or building algorithms to help you achieve the same goals.
Individualized Customer Service
When dealing with your best business clients, you need to offer a personalized level of service. You might have smaller corporate clients that you can treat effectively like you would individuals in a consumer market. But, at the high-end, you have some accounts to make up large portions of your revenue. These customers need to get treated with special respect. Keeping these clients happy requires an individualized effort.
B2B Vs. B2C: Knowing Your Market
A brief glance at websites produced by B2B and B2C companies makes them look superficially similar. However, below the surface, these types of firms have significantly different organizational goals.
This split leads to varying corporate structures and divergent philosophies about key factors of the business process, from customer acquisition to post-sale customer service. By understanding your market, and how best to reach it, you can structure your company so you can capture the type of customer you are targeting.