B2B is short for business-to-business. In a B2B model, companies produce goods and services for other businesses instead of individual consumers. It can be used to describe both traditional and online commerce.
Compared to a business-to-consumer model, the B2B sales process is longer and more complex. The merchant usually has to go through multiple departments within their prospective buyer before they land a sale. A transaction can take weeks or several months, depending on the size of the order and the purchasing company.
B2B transactions have a higher dollar value than B2C transactions. That’s because businesses tend to buy higher-priced goods in larger quantities than individual consumers. To minimize risks, buyers often request prototypes before the sale.
Here are some of the customers of B2B companies:
- Government agencies
- Institutional markets (e.g. hospitals and schools)
- Companies that resell products to consumers
- Companies that transform goods into other products
Characteristics of B2B (Business to Business)
A B2B company usually has these characteristics:
- Has few buyers
- Accepts large volumes of orders per buyer
- More departments or people are involved in the sales process
- Target consumers are easy to segment
- Buyers are highly knowledgeable and professional
Common Misconceptions About B2B (Business to Business)
There’s a myriad of misconceptions surrounding the B2B market, especially when it comes to B2B e-commerce. Sometimes these misconceptions cause companies to fall behind their savvier competition.
- B2B buyers don’t want to order goods or services online
Millennials are now making purchasing decisions in companies large and small. Unlike the boomers or Gen X, they prefer conducting extensive research online before making any decision. They value digital experiences, such as reviews, interactive content, webinars, and case studies. They also prefer streamlined digital experiences.
For B2B companies to succeed in this modern business landscape, they must acknowledge and adapt to the generational differences of buying committees.
- Online stores prevent customization
B2B sellers can offer custom orders through their online stores. Using custom quoting tools and other digital solutions, your prospects can send in a quote at any time of the day. Then, you can respond during your business hours if their order can be fulfilled.
Next time that customer orders, they won’t have to go through your custom quoting engine again. They can simply select the checkout item that’s made for them.
- Buyers don’t accept dynamic pricing
The modern business landscape has become more vulnerable to price fluctuations. B2B buyers do understand that prices may change from day to day, which makes price transparency more valuable today.
B2B companies can use algorithms to provide fair and consistent pricing. These algorithms consider factors such as cost, demand, and supply to come up with price information.
- Buyers focus solely on price
Another common misconception about B2B is that selling online drives commoditization and buyers zero in on just the price point. Sure, technology has made it more convenient for buyers to compare prices from various sellers. While some buyers will cherry-pick potential vendors, others will see the value in collaborative partnerships.
Instead of catering to transactional buyers, create an e-commerce strategy that nurtures your relationship with existing consumers.
Types of B2B (Business to Business) Marketing
Reach your target business audience by using the right B2B marketing strategies. Here are the most valuable marketing tools for B2B companies.
Emails are still valuable marketing tools. For instance, you can use them as part of your content marketing campaigns. Unlike B2C consumers, your B2B audience responds more to content centered on money or time. They also prefer relevant business resources.
- Social media
Using a mix of paid and organic social media marketing strategies, you can target C-suite executives and other B2B buyers who are looking for potential vendors online. Social media is a powerful marketing tool for establishing a brand personality and raising brand awareness. Plus, by maintaining an active social media presence, you can respond faster to the queries of prospective buyers.
Even B2B buyers find videos entertaining, engaging, and educational. Instead of using platforms like YouTube or Facebook, you should target LinkedIn or Vimeo, which attracts more business-minded professionals.
Offer downloadable whitepapers and e-books to establish yourself as an authoritative figure in your niche. You can also use these free resources as incentives to encourage prospects to subscribe to your email newsletter.