B2B Customers Differ from B2C

B2B Customers Differ from B2C

B2B Customers Differ from B2C

There is a common and costly mistake made by B2B business owners and executives when hiring marketing expertise.  These industrial, manufacturing, or technical firms who have businesses (or government) as their end customers, sometimes make a huge error.  This error is in thinking that B2B customers are the same as B2C customers because (as the saying goes) ‘it’s all B2H: business to human’ they explain.  Wrong!  B2B customers are much different than consumers.

B2B Purchasing Process Differs From B2C

Let’s highlight just a few of the important differences between B2B and B2C customers.

Emotional Purchase Decisions = Consumers make emotional purchasing decisions. Many times these purchases are based more on hard-wired psychological needs than on any objective criteria.  Factors such as brand name, status, and personal taste come into play in a consumer purchase.  Whereas, industrial purchases are mostly driven by rational thinking.  Consider, after all, that a bad choice could have a severe negative impact on a career.  When making a significant business purchase, you can’t tell your boss that you ‘feel’ brand ‘X’ is a better choice.  You have to prove you did some type of analysis.  Right?

Now, some may argue that all types of purchases have an emotional aspect to them.  There is some truth to that.  However, it is not the primary motivator in a B2B purchase but it may very well be in a consumer situation.

Impulse Buying = Consumers buy on impulse all the time.  Did you carefully consider the last few things you bought online at say Amazon.com..? Or, did you weigh the pros and cons of something that you unexpectedly added to your cart the last time you went grocery shopping?  Ha! I doubt it.  Not only that, it wouldn’t make sense to carefully consider all the angles of a consumer purchase because it wouldn’t be practical.  Large consumer purchases like houses, cars, and furniture justify our time and attention.  But, we would never get through an entire week if we had to stop and analyze every single purchase.

B2B buying, on the other hand, requires traceability.  We have to answer to a boss, or a board, or the IRS, for all of the expenses we incur.  Large expenses are budgeted and planned.

B2B Value Criteria

This is a topic for a much longer discussion, however, let’s summarize a key principal of B2B purchasing by recognizing that the value criteria are completely different vs. B2C.

Actual vs. Intrinsic Value =  A new sweater with a designer label may cost 5x more than a basic sweater but the added cost doesn’t translate into added warmth.  Sure, it may certainly create a better ‘feeling’ to have a designer label vs. a thrift store special.  This is because the value is all intrinsic and not actually demonstrable.  This is the complete opposite of B2B or industrial purchases.  One tiny key-component in an industrial system like a wafer stepper can give that machine an added performance advantage that provides tremendous end-customer value and allows that company to out-sell their competition by a wide margin.

Demonstration of Value = Consumer suppliers don’t really need to show their value in terms of providing the buyer with some type of gain or savings.  Sure, it may be alluded to in higher end purchases like cars for example.  The car manufacturer may show that it’s cost of ownership is only ‘xyz’ over the course of the car’s life and the dealer may give a warranty that ‘saves’ you money or something like that.  Or, a cable TV provider can tell show you that you will save a certain amount by switching to their service.  The same goes for insurance.  Yet, the information is basic. It’s limited because the consumer buyer doesn’t really scrutinize these things like a corporate buyer.

In order for a B2B vendor to achieve a high level of success the company’s products or services have to demonstrate their value.  What does that mean? Well, they have to show specifically where they add value to the B2B customer and in what ways.  Furthermore, to really ensure sales victory the B2B supplier will ‘quantify’ what the value is to the customer’s system or company.  I’ve been able to do this at technical firms that I’ve worked for and it’s been very successful.  It’s powerful enough to allow my client to sell at a 35% premium against the exact same products.

In short, buyers of B2B products and services have completely different buying procedures and operating modes than consumer buyers.  If B2B firms fail to recognize these differences, or if they hire a consumer marketing firm as their agency, they will do so at their own peril.