B2B (business to business, business for business) is the activity of a company (marketing, trading), which is focused on interaction and getting benefits from cooperation and providing services to other companies.
In contrast to the B2C (business to customer) segment, where companies interact with the end-user, other businesses become the target audience of companies in the B2B market. However, not every relationship between two companies can be attributed to the B2B model.
Key B2B Features
It is customary to relate to the B2B segment the supply of goods and services by one company to another with the following conditions:
- Goods or services will be the main or auxiliary in production, will become consumables for it and will be fully used,
- In the course of use, products may be subject to minor changes in accordance with the company's goal, as well as a complete modernization/revision, during which a completely new product appears.
- The use of goods and services benefits the company.
- Goods and services are not used for the purpose of subsequent resale.
Examples of B2B companies:
- An organization that supplies consumables, spare parts, raw materials, and goods for processing to manufacturing companies,
- Agencies that develop online services for online stores,
- An office building where the company can rent space.
There are also examples of companies that can be both B2B business and B2C - it all depends on the goals of the client they serve. For example, an ordinary buyer can come to the supermarket and buy products for himself (and then this is a B2C model), or maybe the administrator of a small bakery who needs certain products for making fruit pies (and then it will be B2B). Or, for example, a large construction hypermarket where both a foreman for repairs in someone else’s apartment (B2B) and a couple who decided to paste wallpaper in their hallway (B2C) can be purchased.
Accordingly, the B2B model will not include companies that:
- They sell goods to companies for resale, for example, in the FMCG segment,
- They supply tea and coffee, napkins, paper, etc. to offices.
Features of the B2B market
- A small number of companies-sellers and buyers compared to the B2C segment, and for the same reason, competition is low.
- In contrast to the B2C sector, the buyer rarely gives in to emotions when buying a product - practicality and rationality come to the fore: the price-quality ratio of the product, terms of cooperation-discounts for large volumes of deliveries, delivery forms, etc.
- A purchase decision can be made by several people, not just one.
- A company often allocates a large budget for purchases that should be spent as efficiently as possible - a product that performs its functions perfectly and at a minimum cost.
- B2B customers who purchase products are usually well versed in it and often know all the main suppliers. That is why when choosing a company for cooperation, attention is paid not to its publicity in the market, but to how well it has proven itself in the work – the client chooses not only the product but also the relationship and the benefit.
- One and the same supplier may offer different prices for goods to companies-buyers, depending on the volume of purchases, the term of cooperation, etc. All companies are trying to make the relationship profitable and partnership and at the same time quite long.
- The demand for goods and services of the B2B segment is often determined by the economic situation in the market.
Like B2C companies, B2B companies conduct marketing companies to attract the attention of new customers and increase the loyalty of existing ones. B2B companies often use the same channels and promotion methods as regular B2C businesses, but the advertising for the B2B market will differ in a number of ways:
- Complex product (expensive, unfamiliar, with a narrow CA). A company may sell, for example, medical equipment or specific technical tools. The marketing department should be well aware of the product features that should be emphasized in the advertising campaign, correctly assess the demand for it, and choose advertising platforms.
- A company's reputation and connections can be more effective than advertising. In the B2B market, choosing the wrong supplier can cost the buyer too much, so the company's recommendations and experience with it can play a significant role.
- Long transaction cycle. In contrast to the B2C segment, where there are a lot of spontaneous decisions and quick purchases, in the B2B model, a transaction consists of several stages and can take several months. This is especially true for large and technically complex products.
- Difficulty in attracting a target audience. The person who will use the product and the person who makes the decision to buy it is not always the same person. Therefore, targeted advertising may not always be effective.
- Difficult promotion in search results. When advertising and promoting in search, you often have to resort to b2c requests, which leads to inappropriate traffic to the site and loss of budget, or higher cost of attracting a client. Plus, new B2B products are sometimes simply unknown and no one is looking for them in the search, which further complicates the task of the marketer.
According to a Webmarketing123 survey, the most important task of a business-to-business marketing strategy is to generate leads (46%) and increase sales (22%).
The most effective ways to work with B2B marketing audience:
- Online and offline events. Conferences, webinars, business breakfasts, etc – a great way to attract potential customers and to build a base of contacts.
- Web forms for collecting email. Sending useful materials increases the audience's loyalty and willingness to cooperate.
- Demonstration of expertise. Participation in professional communities, conducting research, blogging, and publishing interesting materials - this is how the company can assert itself and establish itself in the market.
- Content marketing. In 2017, according to the Content Marketing Institute and Marketing Profs, more than 90% of B2B companies in the United States used content marketing. Popular formats include training articles, reviews, case studies, tests, whitepapers, etc.
- Correctly configured targeting for online advertising. Using geo-targeting, similar audiences, and so on will help you filter out non-targeted traffic.
- Website with up-to-date information.
- Social network. Many B2B companies successfully maintain pages in social networks and can boast a large audience – and their publications are not only about their products and services but also about the usual working days of the team, behind the scenes of the production process, useful and entertaining content.
- Different PR campaigns that may involve different channels.
- Loyalty program. There are many options: discounts, financial bonuses, entertainment, recreation, participation in training and conferences.
These methods are perfect both for the first acquaintance with the company and for maintaining the interest of current customers, creating the image and reputation of the company. However, the most effective way to work with clients in B2B for making deals and maintaining relationships, of course, is personal meetings and negotiations.
Sales in B2B
- Working with a cold database (market research, surface contacts, identification of potential customers),
- First contact (a conversation/meeting where the client's needs and problems are identified, as well as the business situation),
- Company presentation (a solution that can help solve problems in the client's business and bring benefits),
- Working with objections (working through the client's doubts and questions),
- Signing a contract and closing a deal.
A B2B sales specialist should:
- possess the skills of a universal seller and apply their own knowledge in practice,
- be able to find an approach to legal entities (which is much more difficult than to physical ones),
- know the features of the goods and services offered to customers more deeply than is required for retail sales.
B2B sales and marketing trends for the next ten years
- Personalize your sales with data-driven marketing. Working with "big data" will be available not only to banks and large corporations, but small and medium-sized businesses will also learn to collect the necessary data about users and personalize their work with them, thanks to the availability and spread of big data technologies.
- Virtual reality as an integral part of presentations and demonstrations of products and technology in business. In the coming years, VR technology will become a mandatory part of sales in real estate, design, and engineering.
- Robotization and automation of sales and customer service will be revised in favor of human communication. Customers do not always like communicating with robots, so many businesses may reject them in favor of people. However, for routine tasks (quick answers to popular customer questions, for example, or solving typical problems), automation and bots will be very useful.
- The popularity of corporate training systems will increase the level of sales professionals.
- Return to the market of lead mining technology (monitoring media and social networks by keywords, getting in touch, and discussing a potential client's problem).
- Smartphones will never become a super tool for sales. It is possible to solve business tasks like email newsletters and CRM, but it is not very convenient.
- Working with opinion leaders, creating a community, and brand advocates.
- Outsourcing tasks, for example, to a marketing strategy. In the US, 63% of B2B companies (mainly small and medium-sized businesses) use the services of marketing agencies.