Rethinking B2B vs. B2C: It’s Not About Who’s Buying, But How You’re Selling
During a recent discussion with a founder, they revealed that about 70% of their sales were to consumers, with the remainder going to businesses. In their pitch, they were unsure how to frame their B2B sales story.
The crux of the matter is simple: The narrative shouldn’t focus on who’s purchasing your product, but rather on the manner in which you’re selling it. However, accurately categorizing your business is pivotal, as it profoundly influences your operational framework, marketing strategy, and, significantly, revenue streams.
Traditionally, entrepreneurs define their business model based solely on their target clientele. This seems straightforward: B2B if catering to businesses, and B2C for consumers. Yet, it’s not that cut-and-dried. Despite being perceived as stark opposites, B2B and B2C aren’t solely about audience segmentation; they represent distinct sales and marketing strategies governing engagement, relationship management, and revenue generation.
B2B models necessitate systematic, relationship-driven sales approaches. Deals unfold over extended cycles, often involving multiple touchpoints across various levels within client companies. These transactions tend to be high-value, emphasizing customer retention, trust-building, and personalized service.
Conversely, B2C sales pivot around individual buying behaviors, demanding robust branding, captivating marketing, and consumer insights.
Disregarding the significance of aligning sales strategies with these nuances often leads to suboptimal outcomes. It’s not uncommon to witness a B2C entity striving to elevate customer service to B2B standards or a B2B firm diverting resources to lower-value transactions.
Developing your business model entails dissecting your sales strategy across customer relationship lifecycles, transaction values, branding imperatives, scalability potentials, and resource allocations. This approach underscores that your market category is defined by the dynamics of your sales strategies, not merely the “who” of your clientele.
Establishing this mindset enables startups to assess and adapt operational processes, resource allocations, and go-to-market strategies effectively. By prioritizing strategic alignment, startups can set realistic expectations, allocate resources judiciously, and craft comprehensive strategies.
Ultimately, whether a startup is B2B or B2C shouldn’t solely hinge on the buyer’s identity, but rather on how value is delivered. When crafting your pitch, articulate not only “who” you serve but, more importantly, “how” you intend to create distinctive value.
In summary: If your playbook involves advertising, direct marketing, and influencer strategies, targeting a larger volume of lower-value sales, you’re a B2C company with B2C sales dynamics. Conversely, if you prioritize sales force development, lead generation, and relationship-driven sales, targeting fewer but higher-value transactions, you’re likely a B2B entity. Fundamentally, investors prefer a single, coherent go-to-market strategy, especially in the early stages, as it’s challenging to simultaneously pursue full-fledged B2B and B2C strategies.