B2B and B2C are two acronyms that get thrown around regularly. B2B stands for business-to-business, referring to transactions that take place between one business and another. B2C stands for business-to-consumer and pertain to transactions that take 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 key differences in these two approaches that are worth taking understanding.
B2B vs. B2C lifetime value differences
Lifetime value, or customer lifetime value (CLV), represents the total revenue a customer generates over their relationship with a company. This metric helps you optimize your marketing, but the figures often differ dramatically between consumer and B2B brands.
CLV in B2B relationships tends to be long term and strategic. B2B companies often offer complex products or services that require ongoing support and maintenance. As a result, B2B customers usually have a higher LTV because they make repeat purchases over time, often involving larger transaction values.
In contrast, B2C transactions are typically more transactional and shorter in duration, resulting in lower LTV, as consumers may not return frequently for repeat purchases.
Accordingly, the sales and marketing strategies differ between B2B and B2C companies.
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 target 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 the following steps, with consensus-building occurring 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: The consumer considers a particular set of products or services, they shop around to evaluate their options and make a decision.
Whereas B2B marketing and sales focus primarily on building trust, authority, and price leadership, B2C marketing is all about becoming memorable.
The purchasing decision
Companies consider different factors when making a purchasing decision than individual customers. They care about price, efficiency, productivity, and return on investment.
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. For instance, you may need to formally present your proposal or make multiple telephone calls to more than one person within the company," wrote Forbes.
Recently, however, the dynamics in B2B customer engagement have shifted and look very similar to B2C. More than 60% of B2B marketers say they had success partnering with microinfluencers. Likewise, 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]
Technology
B2B and B2C companies may use similar software, tools, and platforms, but the ways in which they use technology differ. For example, more than 70% of B2B marketers agree that generative artificial intelligence (AI) has a place in their work, but they don't want to rely too heavily on AI tools such as ChatGPT or Gemini. For B2B companies, technology enables sales professionals to develop deep, long-term, personal relationships with buyers.
In B2C marketing, technology often plays a more tactical role. Generative AI helps create engaging social media campaigns; automation platforms schedule and send emails, social media posts, and SMS messages; data analytics extract customer insights to allow personalized targeting. Technology in B2C commerce is all about making things more efficient, maximizing engagement, and converting sales.
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 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 customer relationship management dashboard, for instance. Design your customer service to be high-touch and consistent, no matter who calls for help.
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