Noobs guide: B2B vs B2C vs B2D Marketing

Brenn
Brenn
Sep 29, 2018 · 8 min read

This post is aimed at new entrepreneurs, startups, or others in small companies that are looking to grow, especially people who don’t already have marketing backgrounds.

B2B is far more personal than B2C

Probably one of the most counter-intuitive truths of B2B marketing is that it’s often far more personal than B2C. Selling to a business really means selling to the director of a part of a business, the CEO, or the small business owner. In many cases you can even buy lists of contact info, such as a list of all the CIOs in the Fortune 1000.

For high value B2B sales (anywhere from 10k-millions, depending on the industry), the sales cycle is also relatively long and may include a large amount of interpersonal contact between sales staff and the point of contact person at a particular company.

This often comes as a surprise to new entrepreneurs, who often have more experience as a consumer than as a corporate buyer or seller.

B2C marketing and sales might feel personal, but it isn’t. Because B2C marketing is by nature a wide net, marketing is more about archetypes and personas. Marketing might feel personal to the consumer, but really they are just in a big bucket with others similar to them. In this case, effective marketing is not about getting to know the individual well but rather gaining an awareness of clusters of people — how to group and sort people so they can be targeted en masse.

Driving leads vs Driving Sales

In B2B marketing, the goal is to drive leads for a sales team. Due to the much longer sales cycle, it’s highly unlikely that marketing will lead to an instant sale in a B2B product offering, especially for higher-ticket items. Instead, the goal of marketing is to spark an initial relationship on positive terms that lines up the sales team for success.

In B2C marketing, the goal is to drive sales more directly. A customer sees a TV ad, or reads some content, and can be shunted directly to a point of sale where they can input their credit card and buy.

Business to Developers Sales

A completely new segment of marketing is business to developers. These are companies/products that don’t sell themselves as an end goal, but rather a tool to be leveraged as part of a new product. Amazon, Zapier, and other SaaS/IaaS companies are the exemplars of this push. As a business model, it is brilliant because your customer’s success is also your success. There is a natural symbiotic relationship here.

B2D marketing is also distinct in that the pricing for many B2D sales are at the consumer level and the purchasing is also more similar to B2C sales where the costs may be very affordable and the whole sales cycle can happen in a few minutes.

However, B2D marketing is also very much like B2B marketing: there are high expectations for product support and the purchase of these products is part of the customer’s overall business strategy.

Flipping again, B2D can be seen similar to B2C marketing where there is often a culture created around the brand and the use of a product could be part of an employee’s career arc.

Overall, B2D marketing sales should be considered its own animal, as the target customers and the forces driving their behavior are distinct from most traditional B2B and B2C differences.

A cohesive marketing view

I think this idea of B2B vs B2C marketing is somewhat outdated, as the emergency of B2D shows. Instead, it’s better to think about the ecosystem factors that involve your marketing:

  1. Ease of seeing value for cost: Is the cost something that can be afforded easily, or are you selling something that will be seen as a major, strategic purchase?
  2. Ease of purchase action: Is it easy to reach all the necessary parties to the sale in a single push? Or is purchasing spread out over many steps?

Instead of thinking about B2B or B2C, consider whether the revenue is fundamentally driven by sales, or driven by marketing through direct purchase.

B2B and B2C are really just aspects on a continuum. Most B2B sales involve long, complicated sales processes and are therefore sales personnel driven whereas consumer sales are more direct because it’s easy for a consumer to see value and easy for them to buy.

Plenty of small and medium businesses buy items all the time on the fast, executive decision making of a single person — especially smaller and easier purchases. These sales are much more like B2C sales than B2B.

In fact, realizing that this is a continuum can give you an advantage over your competitors. Moving from a difficult B2B hyper-personal (and thus expensive) marketing/sales process to a more B2C process aimed at businesses can drive tremendous marketing and sales efficiency.

Brief Case Study

A perfect case in point is Adobe and their digital creation tools. The main purchasers of photoshop and other tools are businesses but the cost of a subscription to their entire portfolio is as little as $60. Because it’s easy to get started and purchase, they can drive direct sales. As a subscription product with unique file formats, this sale becomes very sticky — possibly driving reliable revenue for years. Compare that to trying to sell the way they used to, where their suite might be a few thousand dollars. Such a purchase is far harder to justify, slower, and left Adobe servicing a large catalog of legacy versions of their software. Their sales process was more expenive, their support was more expensive, and their revenue was less predictable. They changed their model, changed their marketing, and sales has never been better. As of this writing, Adobe’s stock is near an all time high, near $270 from less than $100 a few years ago.

That’s the power of different business and marketing models.

However, sometimes the opposite strategy can work, especially for a product offering that’s more convulted and big-ticket. In those cases, it might be helpful to RAISE prices and use the extra costs to drive a sales team. It’s all about understanding your value proposition in the eyes of the customer.

The Unique Value Proposition

It’s critical to understand the compelling reason to buy that exists in the minds of your customers. In order to do this, it’s important to understand your customer segments. Customer segments are distinct groups with particular needs, working in particular contexts, and therefore will have distinct responses to offers and advertising.

If you get your segments right, everything afterwards is much easier. Get it wrong, and your marketing efforts are in for a world of pain.

Segments can be discovered by looking at a variety of factors. Here’s what I’ve found to be the top 6 items, in order of criticality

  1. What is their “identity”? How do they wish to be perceived?
  2. What are their pains, challenges, and needs?
  3. What are their hopes and dreams for the near-term future?
  4. What people/products do they already trust?
  5. What role would the product play in their life/business?
  6. Customer age.

Once you have a good idea of all 6 of these aspects for existing or possible customers, you will usually see some natural overlap. Heavy overlap suggests a segment that can be pursued.

Note that “Identity” is the top of the list. A lot of times we think about this as sociological information like race or conservative/liberal but that’s only a piece of it. Identity should be understood as “how they want others to perceive them”. Even in a traditional B2B situation, there was the saying “nobody got fired for buying IBM”. That’s because buying IBM could always be seen as safe and responsible — a critical perception for people worried about being fired.

Whether consumers or business people, the vast majority of customers are trying to impress someone or at least not look bad. Understanding that aspect of their world is the MOST important part of successfully marketing to them.

Segmented Marketing

Once you have your segments, you can begin to refine your segmented marketing strategy. Using the segment data you should have gathered, answer the following 4 questions for each primary segment

  • Who are we trying to reach?
  • Where can we reach them?
  • What are we trying to accomplish?
  • What do we need to say to them?

Again, understanding their identity, pain, hopes, and life experience will be very helpful. The end result of these exercises should be a set of marketing personas and targeted marketing plans based on those personas.

Costing Your Marketing Plans

Across your segments and plans, you should now be able to get some idea of what it takes to reach each of your possible customer groups. It’s critical to look at how much it costs to reach those customers and and assign a value.

For instance, if you don’t have any existing marketing/sales data, you might assume that for every 100 people you reach, only 1 eventually buys. If you have 10 segments, in one segment it might cost $1000 to reach 100 people and in another it might cost $10. However, your product costs the same, and if the profit margin is less than $1000, it’s not worth marketing to the more expensive segment.

Trial Runs

It’s important to validate any assumptions. Does only 1/100 people buy? Things look really different if it’s 1/500 or fewer. Or perhaps one segment is much more responsive. Once you have some test data you can calculate a critical business metric: the CAC, or Customer Acquisition Cost. Add your marketing costs for the segment along with the cost of the sales team, if any, associated with that segment.

The Equation That Determines Your Business

The reason it’s so critical to know CAC is that if you know your CAC and you know the overall amount a customer typically buys (called average lifetime value, or LTV), you can see the state of your business with a single equation:

CAC>LTV = you are going out of business

LTV> CAC = your business is functional.

The goal is to have the LTV far above your CAC, because that gives you the capital to thrive and grow. This equation holds no matter what sort of business or marketing/sales strategy you have.

Conclusion

This is enough to get started with creating a marketing plan, and I’ve seen plenty of marketing consultants who can’t do this properly. Take the time to think this through and you’ll be well ahead of the game.

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Brenn

Written by

Brenn

World traveling entrepreneur, engineer, artist, and writer. Dedicated to helping people live their best life. Buy me a coffee: https://ko-fi.com/G2G1MT7K

The Startup

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