B2B vs B2C Sales Models: Comparisons and Key Trends

Sales is still one of the most crucial business functions of any business type. It is the set of activities any business or company perform to sell its products or services to prospective buyers. Sales teams are almost solely responsible for generating business revenue and covering the salaries and expenses of the organization. Any business planning in a company starts with sales targets. Lately, there has been a lot of pessimism over the past decade, especially with the advent of the digital age that sales teams would become obsolete over time. Well, this doesn't seem to be precisely turning out to be true, though.

One big way to differentiate sales models is whether the company is selling its offering to individual buyers or organizations. While there are a lot of similarities in the overall sales model irrespective of who the buyer is, there are some essential differences in how both types of sales activities are designed and executed.

In B2C sales, a company sells its product or services to a private individual who needs the product chiefly for their consumption. On the other hand, in B2B sales a company is selling its offerings to a similar business that requires the product or service for the organization as a whole and not necessarily for private/individual consumption.

Similarities in B2B and B2C sales models

The larger approach in selling to both individuals or an organization has many basic tenets in common. Marketing is required to generate business interest among prospective buyers across both models, though the techniques will vary. Both sales models need very customer-obsessed sales teams to be successful at their jobs and increase revenue for the business. Omni-channel selling, exceptional customer service, and clear communications with prospective buyers are some other commonalities between B2C and B2B models.

Key Differences between B2B and B2C sales

• Structure in the process: In B2C sales your potential buyer could be anyone from a teenager to a senior citizen, living in a metropolitan or a village. While your service offering could be anything ranging from toothpaste to iPhones or travel bookings. Product or service offerings in B2B sales can be many as well, but the buyer persona is more structured. Organizations work in a more structured manner and have a pre-defined set of employees or teams meant to perform a specific role like purchase, finance, audit, etc. This approach inherently makes the B2B sales process more defined and organized.

• Buying value: B2B buying value is typically higher than B2C sales. This is pretty straightforward, consumers buy products for their use or at best consumption for this family. Whereas, companies buy for the use of a larger group of employees in their organization, if not all of them. There are higher ticket-sized purchases among consumers like buying a new house or a car, but those are a small fraction of the overall purchase basket in their lifecycle. Businesses as well make smaller ticket-sized purchases like office stationary or consumables but they buy in bulk for their entire company.
• Stakeholders: In B2B sales you have multiple stakeholders involved in the decision-making during a purchase. Selling teams have to convince all of the decision-makers to finalize a deal. This makes the buying process more complex compared to B2C sales where individuals make the buying decision on their own most of the time. For higher-value purchases, consumers take reviews, inputs, and feedback from relatives and friends, but the front-end discussions for selling teams are managed by the lone individual.

• Decision-making approach: For consumers, buying a product is more of an emotional and impulse decision in B2C sales. They attach importance to the brand appeal and are driven by the overall storytelling. Many of us as consumers also make purchase decisions keeping our network and social status in mind. This objective and motivation of buying decisions are strikingly different in B2B sales. The purchases are driven by logical considerations and are more rational. Purchases are made only if all defined criteria for the product like technical specifications, budget, warranty, business requirement, etc are met satisfactorily.
• Sales cycle: Given the nature of buying decision-making, needs, rational approach, and numerous stakeholders involved in B2B buying decisions, it is evident that the sales cycle is pretty high when you compare it with a B2C sales journey. Not to mention that the difference is very stark, consumers buy products in a matter of an hour and a few days, while the same for businesses can range from a few months to more than a year.

• Selling skills: It has been well established by now that the B2B sales process is more nuanced given it is more rational, and multiple internal decision-makers are involved. So to sell your product and services to any business would need a fairly mature head, patient, and a clear communicator who can navigate the complex internal maze of stakeholders to close a deal. The person leading the B2B sales should have strong relationship management skills and be a deft negotiator as well. The equivalent case of salesperson skills in B2C selling is different. New-age consumers prefer reading product reviews online, referring friends for feedback, and deciding based on self-assessments. B2C salespeople do not generally need very experienced sales executives all the time.

There are some other differences between the two sales models that I am highlighting below for reference:

Conclusion:

B2C and B2C sales models have significant differences and with changing customer needs keeping pace with technological changes, these models are expected to undergo further changes in the coming future. There will be some aspects like marketing which are converging while some attributed related to sales will also draw towards a common node.

New-age technologies like AI chatbots and virtual selling especially after covid have gained traction across B2C and B2C sales processes. In the past decade or so, B2C sales have been a lot of faceless sales, especially with the deep penetration of eCommerce and conversational commerce in retail. Consumer product companies build a strong brand connection with activities like marketing, and PR is aided by fast social influencers to drive quick decision-making without many human interactions. B2B sales on the other hand are also fast to adopt technology to improve relationships with their prospective buyers, high-velocity sales, and growing inside sales teams are some evident changes.

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If you are looking for a customized sales solution for your fast-growing organization, do consider a free demo with Chakra Sales.