Modern business is developing, using new approaches and models of interaction between the manufacturer and the customer. One of such popular methods is B2B. In the article, we will take a closer look at this direction, types, areas of use, advantages and disadvantages.
Definition and relevance
B2B-is a working principle in which a company offers and provides its services to other organizations for the continuation of production and activity. From the English language business-to-business, it means business to business. The history of development begins with the period when trade between enterprises arose, at first it was in the form of an exchange of goods, which over time became more complex, and with the development of the industry, the need to automate processes in functioning became relevant. The emergence of the telephone, computer systems, and later the Internet significantly simplified the interaction between companies. Today, this segment is the newest high-tech direction, where innovative technologies are used to optimize work processes.
The method is used in production, distribution of goods, as well as regulatory and logistical, legal, and marketing services, because each of these areas plays a significant role in the continuous operation of enterprises, increasing competitiveness and efficiency. In the Ukrainian market, institutions using the B2B model are important and relevant, for example, consulting organizations (provide consultations to build a business development strategy and improve the efficiency of production processes), logistics (responsible for the transportation and storage of goods, especially for those that operate on a significant scale abroad). Products include both raw materials for the manufacture of goods and finished elements, spare parts, etc.
Business-to-business is different from other models in that the main client in the business is organizations, therefore it is very important to use elements of marketing, sales and close interaction, which is aimed at long-term, trusting and loyal relationships. The process of interaction and sales can be longer and more complex, because they require several stages of approval and decision-making, in accordance with the wishes and needs of customers. So, the main differences are:
- a complex sales process (negotiations, coordination of technical aspects, pricing policy and review of contract terms, very often this process is automated using a CRM system.
- clear research, analysis of various options and internal consultations
- use digital platforms to exchange information and demonstrate products
- high price for services (this is explained by the fact that it is necessary to go through complex and lengthy stages, and in addition, this area requires special knowledge)
- small customer base, but each of whom is considered very valuable.
It is these factors that express the peculiarity of the model, the need for a special approach in the field of marketing, increasing sales and quality of service.
Types of B2B
There are several types of models used for doing business, because this direction requires flexibility and readiness for any situations. The following are distinguished:
- B2C (business-to-consumer) - selling goods to the end consumer without an intermediary, this method is popular and covers a wide range of services
- B2B2C (business-to-business-to-consumer) - selling manufactured products to other organizations to create goods that will go directly to the consumer.
- B2A (business-to-administration or B2G-government) - companies sell goods to government agencies or government representatives, for example, IT services that offer software, etc.
- C2C (consumer-to-consumer) - the essence of this model is the sale of a product by consumers to other consumers, often found on online platforms such as OLX, Prom, where users can place ads.
- C2B (consumer-to-business) visitors advise purchasing services from various companies.
Key differences between B2B and other business models
B2B vs B2C: differences in sales processes, approaches to customers
| Criteria | B2B | B2C |
| Target audience | Businesses, organizations, enterprises | Individual buyers |
| Marketing and sales | More complex, longer sales. Market knowledge helps build strong and long-lasting relationships. | The goal of sales is to make quick transactions. Marketing is to attract the attention of a larger audience through social media, SEO |
| Products | Services are complex and need to be tailored to customer needs. | Consumer goods, standardized. |
| Clients | They require support, training and maintenance throughout the entire work cycle. | Service for a certain period of time, before purchasing the product and after the sale - issues of return, exchange. |
| Price | Depending on the volume of the order, discounts are available for regular customers, and prices are flexible. | The price is fixed, non-negotiable, price reductions are not possible during promotions or sales. |
B2B vs C2C: comparison of interaction models with end consumers and other businesses
| Criteria | B2B | C2C |
| Target audience | Enterprises, organizations | Other consumers, users of the online platform, the intermediary is the marketplace |
| Goods | Product manufacturing is tailored to customer needs | Frequently used and popular products |
| Prices | Flexible, subject to change by agreement | Wide range from cheap to exclusive |
| Clients | Great attention is paid throughout the entire contracting process | Difficulties with trust, as you can often encounter dishonest sellers |
B2B and B2G (Business to Government): how business works with government structures
B2G (Business-to-Government) - this model involves the interaction of enterprises with government bodies, a complex and profitable activity that requires compliance with clear requirements. An example of such a method is public procurement tenders, the structure creates an order, requirements for it, a price and places it on special platforms, business representatives submit applications, carefully process them and choose with whom they will cooperate. The main features of B2G are:
- cooperation with clients is long-term and stable
- bureaucracy (the decision-making process can take a long time, checking a large number of documents at each stage)
- large sales volumes (payment may take quite a long time, with delays, as financing depends on the state budget)
- clear cooperation (compliance with legal norms and standards, and the actions of both participants in the process are carefully checked).
Interaction with the state must be approached responsibly and wisely, assessing one's own capabilities, strengths, benefits, and risks for one's business.
B2B Sales
The main features of B2B trade are:
1. Customer search - the problem in this direction is the choice of the target audience, so this must be approached responsibly, the best option is online surveys, testing, these methods will make it possible to determine needs and expectations.
2. Supplier selection - companies choose products that will be efficient for production, making it more affordable, of higher quality, faster, and in demand.
3. Channels – are divided into different types depending on the sales method, namely: corporate, dealer, distributor, retail.
4. Long-term cooperation - involves long-term relationships, trust and reputation are of great importance.
Customer acquisition
The B2B model is aimed at constant and individual work with customers. Let's take a closer look at how to find users in a competitive market.
1. Study and analysis of needs (offer help and solution to the problem, providing favorable terms of interaction)
2. Structuring of products (detailed study of information about the manufacturer on available channels, so the potential client needs to be interested, for example, with a personal website. Pages are evaluated for reliability and authority (the first in the search, which indicates popularity and status), easy and clear presentation of information, the customer easily finds the information he needs), reviews and advice (video reviews that inspire trust are effective).
3. High-quality relationships with the buyer (given the limited communication time, it is necessary to respond promptly to interest in interaction, focusing on speed of response, punctuality)
B2B sales strategies and channels
Trading processes are complex and lengthy, so they require time, effort, and resources to attract new partners. Modern technologies and tools that can increase operational efficiency, increase sales, etc. help to make the work easier. The most popular are:
1.SEO (traffic attraction through content that meets customer needs.
2. Paid advertising (use social media advertising, targeted advertising or Google Ads)
3. Social networks (LinkedIn is the best platform for establishing contact with the target audience)
4. Email newsletters (to maintain interest in the company, regularly sending interesting, updated information)
5. Remarketing (re-exposure to users who did not convert)
6. Conferences/webinars (online events to showcase knowledge and agreements).
The importance of CRM systems and process automation
Orderly work with each customer is important in managing a customer base, such management is provided by CRM systems. Thanks to this tool, companies have the opportunity to control transactions with each buyer, perform necessary actions with the product and add additional services, leads are automatically processed and enter the sales funnel. Main functions:
- return on investment assessment
- analysis of the audience and its needs
- collection of applications
- selection of agreements that will have successful cooperation. Also, to automate and facilitate processes, the following are used:
- spreadsheets (similar to Google Sheets, help you complete more tasks faster, increase lead generation)
- SEO (Ahrefs - helps company marketers increase impressions on Google websites and other search engines, allows you to attract traffic to resources and optimize SEO strategy)
Tips on how to choose the right tool for workflow automation
- First of all, it is necessary to determine the problem that needs to be solved and whether such a method will cope with it.
- Determine the goals of using the tools
- Calculate an approximate budget and check if it will cover your wishes
- Use free trial periods to determine if it's interesting and how useful it will be.
- The software must keep up with your business and perform the tasks assigned to it.
The role of specialists in B2B
The trading maneuver is possible thanks to the close cooperation of specialists, including:
1. B2B marketers (the main functions are to promote goods and services on the market, specialize in advertising, sales in this area. These specialists analyze the target audience, their requirements and needs, interests, develop methods for better and more effective promotion of products, interact with organizations to achieve successful deals)
2. Business-to-business sales manager (expands the client base by conducting market analysis, identifies potential clients, holds meetings with customers, participates in various tenders and conferences, and also monitors the CRM database)
3. Content Manager (a professional writes texts, publications, monitors and updates content, selects media materials, necessary information that interests, monitors deadlines, checks and edits posts. The manager's task is also to find platforms for posting content, and monitors updates in his field of activity)
4. Analyzers (is a software that performs business-to-business analysis, provides insight into potential customers, the state of the market as a whole, and helps improve the marketing strategy and development of the business itself).
Pros and cons of B2B
By comparing several business models, each can highlight its advantages and disadvantages, in particular, we will give an example of the most popular system.
Advantages:
- stability
- large sales volumes
- conscious customers, clearly aware of their needs and desires in the field of services or goods
- minimal costs (negligible costs are required to start)
- wide coverage (the opportunity to work not only in Ukraine, but also abroad)
Disadvantages:
- possibility of losing a regular customer (you need to constantly work on strengthening close cooperation)
- competition
- co-dependency on suppliers
Thanks to a smart and responsible approach, minor defects can be eliminated.
How to work successfully in B2B?
To receive increasing income in this area, it is necessary to analyze the results and achievements of the company's work, identify weaknesses and work on them, improve them, determine the level of efficiency by the size of the average check, the customer churn rate, the efficiency of completing tasks and the set plan for the month, quarter, etc. Sales specialists must clearly understand and know the wishes of their customers in order to build long-term cooperation.
It is also important to consider a number of factors that can increase sales: careful selection of future customers, competitor analysis, use online marketing tools, visit special exhibitions, forums, etc. Motivating employees also plays a significant role, because responsible work, faith in your own product, and an honest approach contribute to increasing operational efficiency.
So, from all of the above, we can conclude that
Business-to-business is a complex and multifaceted segment that requires appropriate approaches, knowledge, understanding of the specifics of both sales and customers themselves, what they need and demand, compliance with and consideration of all factors, and an experienced approach will be the key to your successful activities.
