There always seems to be a bit of confusion around the meaning of B2B and B2C selling. The acronyms stand for Business to Business (B2B) and Business to Consumer (B2C). Business development is generally considered to be in the remit of B2B, but doesn’t have to be.
Meaning of B2B
This post gives a definition of both B2B and B2C with an example of each. I’ll also give a real example of a an organization that tried to do both and why it didn’t work.
Meaning of B2B: Business to Business
B2B involves a business providing services or products to another business. This is usually where business development is thought to sit. However, if you’ve been following this blog for a while you’ll know that I consider business development to be more than just sales. It’s about building long term sustainable relationships with customers.
B2B customers are companies rather than individuals and as such the relationship will span multiple individuals. The relationships tend to be longer lasting with the aim of receiving repeat business over time.
Examples of B2B businesses include Rio Tinto selling iron ore to the Chinese steel mills and consultant engineers providing design services to construction firms.
Meaning of B2C: Business to Consumer
On the other hand B2C involves businesses providing services or products directly to the consumer. Business development is important here as well. The strategic work required to identify your customer segment and determine where to focus your efforts definitely fits within the business development remit.
However, the relationship is limited to the individual is often transactional in nature. As a general rule B2C doesn’t involve much in the way of relationship building. The exception here is when items are of a particularly high price point.
Examples of B2C businesses include Apple selling their phones and Tesla providing electric cars to consumers around the globe.
Can You be Both B2B and B2C?
While it is possible for a company to do both B2C and B2B it can be difficult to achieve. Both versions often require quite different business models and pricing structures. Large companies like mobile phone providers have different divisions looking after each. For example Vodaphone has a specific team looking after business clients. Banks are another example of this.
One of my past roles was running an asbestos removal company. We prided ourselves on customer service and doing the work safely and by the book. Most of our customers were businesses who needed their buildings and infrastructure to be made safe. As such the B2B approach was prevalent.
However, we also serviced homeowners who needed the asbestos hazard removed from their homes. This proved to be a bit of a problem. While businesses were willing to pay for good service that removed the hazard properly with all the correct paperwork and disposal practices, it turned out that the direct homeowners were not. Instead, they wanted the asbestos removed as cheaply as possible and didn’t care where it ended up being disposed.
As you can see these two modes of operation were actually incompatible, requiring very different business models. We couldn’t maintain the same pricing structure across our B2B and B2C segments.
We had to choose one.
Of course we went with the higher revenue B2B market that valued our offering.
The lesson here is that trying to do both B2B and B2C, while not impossible, is very hard. Especially if you are a small to medium enterprise. My advice would be to stick to one or the other.
Final Words
Hopefully this post has made the meaning of B2B and B2C clear. Ideally, as a business developer you want to stick to one or the other. This avoids any confusion around your business model.
What do you think? Do you have any examples where B2B and B2C have been run successfully together?
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Meaning of B2B
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