Benefits of B2B model
B2B model comes with a few very important benefits, including:
● There is much less competition - B2C is currently the most dynamic and the most competitive business sector. Vast majority of newly founded startups direct their products and services towards a large consumer base, which makes B2B market much less competitive.
● Business consumers pay more - B2B entrepreneurs receive much less high price complaints from their customers and business partners. One of the reasons for this is that fellow entrepreneurs understand the value of money and work you invested in the product or service that makes their business run.
● There is more space for innovation - As we’ve mentioned earlier, most new startups follow B2C model, which leaves B2B companies with much more space for applying new and innovative ideas. In addition to this, B2B market is currently dominated by large and slow corporations, which means that new startups have plenty of opportunities to earn their market share with innovative thinking.
Major differences between B2B and B2C model
Differences between B2B and B2C business models go far and wide. While incorporation process for B2B and B2C model companies is not much different, their marketing and sales sectors utterly differ from one another.
● Marketing - There are several key differences between B2B and B2C marketing approach. While consumers usually buy goods for entertainment, companies buy products and services they need for running their business. This means that the whole marketing approach needs to be much less emotional and much more logical and rational. B2B consumers ask for very detailed descriptions of product features. Marketers that are targeting B2B sector need to elaborately explain to their audience how some specific product or service will save their time and make their business more profitable.
● Sales - B2B model requires entrepreneurs to invest much more effort in cultivating relationships with their buyers. As a reward for this extra effort they get much more profitable contracts and bigger orders than the companies in B2C sector. B2B sales are usually agreed in direct conversation between all stakeholders. They require entrepreneurs to develop great presentation and negotiation skills, but all that brings much lengthier contracts and deals.
Tips for running B2B ventures
Now when we determined major benefits and differences of B2B model, we will share several tips that might aid you in boosting your company’s B2B business performance.
Trade shows are great
Trade shows are very important events for B2B businesses. These are the places where entrepreneurs meet their future customers and present them with their offer. Therefore they should regularly attend these events and try to stand out and attract more business customers. They can do this by applying tactics that are regularly used in B2C sales and marketing campaigns, like involving social networks, making competitions, give away fun prizes etc.
Don’t make your business too secretive
Most companies are afraid of corporate espionage, which is why B2B businesses often hide their production process. Since B2B contracts last and are worth much more than B2C ones, business customers usually like to know more about production or service process before they decide to purchase. That is why companies who do business in B2B sector need to be much more open when it comes to their production. They should: publish eBooks about their business, print elaborate manuals, give-away samples and conduct demonstrations directly at their production plants and assembly lines.
Solve service issues immediately
Business customers are generally more demanding than regular consumers. Who would have blamed them, since they usually have thousands, if not even millions of dollars tied to their ventures. That is why B2B companies also need to be very fast and efficient when doing restructuring, repairs or when having various types of service issues. For example, if you are ordering production plant renovation or any other type of construction work, you need to ask contractors to purchase surety bonds, which will guarantee that the whole project will be done in a timely manner and in accordance to the contract. Reason for this is because only few days of business delay can cost you one or several high-paying clients.
Location, location, location
Most entrepreneurs think that location of their B2B company’s office is irrelevant. Although their customers don’t have problems with long rides to city outskirts, B2B companies that work from more premium locations have much better communication with their partners and have much bigger talent pool to choose employees from.
Although in this article we pointed out several major differences between B2B and B2C business models, these two markets still come with lots of similarities. They both require entrepreneurs to build strong brands and invest lots of money, hard work and commitment into their company’s development.
