B2B vs B2C: What's the Difference?

B2B and B2C are two acronyms that get thrown around regularly. B2B stands for business-to-business, referring to a type of transaction that takes place between one business and another. B2C stands for business-to-consumer, as in a transaction that takes place between a business and an individual as the end customer.

While B2B and B2C follow essentially the same equation — a customer is buying something from a company — there are some key differences in these two approaches that are worth taking the time to understand.

The path to purchase

The “customer journey” or “path to purchase” — e.g., the series of decisions a company or customer takes before completing a transaction — looks different for B2B and B2C businesses. Understanding what the customer needs before they can buy from your brand is fundamental to planning your sales, marketing, and customer service.

[Read more: 10 Business-to-Business (B2B) Startup Ideas You Can Start Today]

In the B2B market, businesses are targeting other companies. For example, Salesforce, Microsoft, and IBM sell software to other enterprises whose employees use their tools to perform their daily work. Every purchasing decision involves multiple stakeholders: finance, accounting, procurement, and other teams are often involved.

Typically, the B2B process involves these steps, with consensus-building along the way:

• Identify a problem or need.
• Explore different solutions and do market research.
• Create a list of requirements.
• Select a supplier (e.g., the B2B business).

In the B2C market, the business only markets directly to the individual. This means the path to purchase can be relatively linear: they consider a particular set of products or services, shop around to evaluate their options, and make a decision.

The purchase decision

Companies consider different factors when making a purchase decision than individual customers. They care about price, efficiency, productivity, and ROI.

For B2C customers, there’s more of an opportunity to make an emotional connection. Brands like Nike, Whole Foods, and Petco need to connect with each customer’s wants, creating a story in their marketing and sales campaigns that’s entertaining and educational.

“B2C customers are highly invested in their own enjoyment when buying for themselves rather than a business they work for. Sure, everyone wants products that make their lives easier, but the average B2C audience is far more interested in fun than the average B2B audience,” wrote HubSpot.

Whereas B2B marketing and sales focus primarily on building trust, authority, and price leadership, B2C marketing is all about becoming memorable.

Customer engagement

B2B and B2C differ in how they engage potential customers — although in recent years, this difference has shrunk.

B2B companies, historically, relied on traditional engagement methods: sales calls, conferences, trade shows, and networking. “If you plan to sell B2B, ensure you are prepared to invest time in cultivating a relationship with your potential buyer,” wrote Forbes. “For instance, you may need to formally present your proposal or make multiple telephone calls to more than one person within the company.”

Recently, however, the dynamics in B2B customer engagement have shifted to look more similar to B2C. More than 70% of B2B marketing teams are planning to invest this year in influencer marketing. And social media is becoming an increasingly effective marketing tool for B2B companies, with 75% of B2B buyers and 84% of C-suite executives saying they use social media when making a purchase.

[Read more: How to Create a Hybrid Sales Model]

Customer service

Finally, B2C and B2B require different approaches to customer service.

Today’s consumers appreciate an independent, self-service approach to customer service. In the B2C space, individuals want to be able to quickly and efficiently resolve an issue, ask a question, or connect with a live agent without having to go through a long phone menu or hunt through dozens of web pages. The bottom line for B2C companies: help customers help themselves.

In B2B, some self-service options are certainly appreciated. However, B2B transactions are usually complex, expensive, and long-lasting. As a result, B2B businesses often need a dedicated support team to address issues from their clients. This arrangement helps mitigate the frustration and stress that results from multiple teams using the same account. It can also promote continuity by managing all requests in one CRM dashboard, for instance. Design your customer service to be high-touch and consistent, no matter who calls for help.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Follow us on Instagram for more expert tips & business owners’ stories.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.