Every business can be classified either as a B2B or a B2C business. You’re either selling to a business or directly to a person. Your target audience makes a world of difference in your marketing strategy.
B2B (business-to-business) and B2C (business-to-consumer) businesses differ greatly because of the number of decision-makers involved in the buying process, sales volumes, and the customer’s motivation to buy. This in turn dictates your marketing strategy as well as how much time and money you can invest in it.
For every astute marketer, it’s important to understand the basic difference between B2B and B2C business models. You’re a B2B business if you sell your products and services to other businesses, like selling raw materials to a textile manufacturer, or enterprise phone systems to a call center. B2C would be anything sold to a customer for personal use: your neighborhood convenience store, retailers, FMCG manufacturers, and eCommerce websites.
Ecommerce is actually a tricky one. Many eCommerce websites that sell SaaS software are B2B businesses. There could also be an overlap in the target audience. Say, you’re a seller of .au domain names as well as .com ones, your buyers could be businesses and individuals.
As a marketer, how you engage with your target audience, and craft strategies based on the level of emotion involved, differs profoundly depending on your business model. The only underlying similarity would be the need to have a high-performing marketing strategy that results in substantial revenue.
To understand B2B vs. B2C marketing, we’ll review the five key areas that need different approaches from marketers because individual customers have different attitudes and needs than business buyers.
Relationship building is paramount for B2B marketing and lead generation. You have to build personal relationships with your stakeholders to drive long-term business growth. This gives you a chance to build your brand and also gives you a competitive advantage. Personal relationships are also necessary because referrals are incredibly important for B2B businesses.
A winning marketing strategy for B2B marketers should concentrate on increasing the customer’s knowledge about your product.
Developing honest relationships that are meaningful will positively affect your bottom line and help with customer retention. B2B businesses need to keep a keen eye on customer experience KPIs because returning customers are always more profitable.
B2C relationships are transactional. Consumers prioritize quality, value, and price points. This also means that the entire customer experience needs to be flawless. Good relationship building for B2C consumers would include personalized email marketing, digital marketing on social media, excellent customer service, and blog posts.
There are many key decision-makers in your customer’s office. This makes the buying process longer and more complicated.
For example, if you sell enterprise communication solutions for businesses to make communications better both internally and externally you have to convince stakeholders from the following:
2. The IT department. They’ll implement the solution so they need to be convinced if it is compatible with their current IT infrastructure.
3. The customer service team will be one of the end-users of the new communication solutions.
4. The HR team, because the solution will be used for employees to communicate with each other.
5. Finance. It has to make commercial sense to buy your product or service.
Each of the above will have a say in the final purchase decision. You’ll have to explain “what is fixed VoIP” and “what is a CRM software” along with their benefits in your marketing content that will be targeted to all of the above. In fact, all your marketing efforts have to be done keeping all decision-makers in mind.
You’re selling directly to the consumer. Gone are door-to-door sales for FMCG (fast-moving consumer products), you’re now using mass communication methods to convey and send your message. Whether traditional media or digital media, your marketing campaign targets your consumer directly.
The decision-making process is simple and individual. You advertise your offering, put it across to your target audience, and evoke in them a need for your product or service. Or perhaps an answer to their needs. Unfortunately, B2C communications aren’t as open as B2B where you communicate directly with the client.
The B2B buying cycle is complicated by the number of decision-makers involved. As you move further down the conversion funnel it gets even more complicated and thus more time-consuming. The end-user who actually wants your product might not be the one paying for it. This calls for your marketing strategy to be revised and personalized for every stakeholder.
Imagine again that you’re a communication solutions provider, the HR team wants a private telephone network for use within the company (PBX), IT is ready to implement it and yet you have spent hours telling Finance “What is PBX” and if it’s worth the investment.
There are ways to accelerate the B2B sales cycle and one of those is to utilize sales automation tools like CRM (customer relationship management) software to identify high-quality leads, store customer information, and identify sales opportunities.
The purchasing decision for a B2C customer is a matter of minutes. Personal decisions are more likely to be impulsive and B2C marketing needs to be able to capture attention in a limited amount of time. Usually, it is an individual making a decision for themselves or family, but even if it is influenced by others and they venture out to seek recommendations, the buying cycle is considerably shorter than B2B.
You have to make a logical case for your product or service – and to every stakeholder differently. Since B2B relationships are also long-term, you have to make sure you can demonstrate the long-term value of your product. B2B buyers are motivated by the features of the product or service – there’s no emotion involved. The purchase is highly planned. B2B brands have to be focused on ROI and convince customers they’re worth the investment.
You need to play to the emotions of your intended customer. Your marketing strategy should be focused on appealing to people’s emotions to inspire them to buy your product. Your ads don’t need to focus on the features of your product, rather they need to show how it could improve their lives.
Advertising and Communication
For B2B brands, relationship development is their first priority. Communication is mostly direct with the customer but for lead generation and brand recognition, many advertising tools can be used. Product videos and content marketing through emails or high-quality written content on blogs have been known to be excellent lead generators.
Social media platforms like LinkedIn can also be used for content marketing to establish yourself as a thought leader in your niche. Paid ads on search engines or LinkedIn also have a good reach.
B2C customers are the ideal target for digital and content marketing. B2C brands need to build brand awareness through their advertising strategy. You have to deliver a message that inspires a purchase and also creates loyalty. B2C branding needs to confirm credibility while creating an emotional connection.
Content for B2C customers has to resonate with them. You need to speak their language and to do so you can use the range of multimedia tools available, like SEO, social media marketing, influencer marketing, and Google ads. This is of course apart from traditional media like print, radio, and TV ad campaigns, which are still very relevant.
B2B vs. B2C: Not All That different
While the lines between B2B and B2C become more pronounced because of the target audience, there are also numerous similarities. While it is harder, more expensive, and more time-consuming to convert a B2B consumer as compared to a B2C customer, B2B marketing is just as much about customer experience as B2C.
B2B customers want rational content and B2C would prefer it if it was entertaining and emotional, but the fact remains despite the different motivations you’re still selling to people. You can’t nurture a relationship with your B2B clients by simply focusing on their logical business needs, just as you can’t make an emotional plea by ignoring your B2C customer’s budget.
Customers are at the heart of every business, and brands need to focus on making their marketing strategy customer-centric ensuring a flawless customer experience. Understanding your audience and their needs are mandatory to be able to target your marketing efforts at them, and this holds true for both B2B and B2C.
Retail Search is the New PPC
“Amazon Ads, why?”. It all started for me back in 2018 when I interviewed some of the world’s leading PPC experts and surveyed award-winning paid search agencies. They were all doing Google Shopping campaigns but what about Amazon Ads? Very few of them invested there.
Since then, Amazon Ads has caught up on both Meta and Google. The advertising revenue of Amazon represents 7% of its business. But those 7% already correspond to almost 20% of Google Ads. It’s on fire.
But it is not all about Amazon. When you dive deeper into the online retail marketing space, you quickly find out that retail search is not the only advertising lever there, and that Amazon is not the only player. Beneath the surface, you will find a a whole new world of what we call “Retail Media”: advertising during the consumer journey in retail sites, marketplaces and even beyond. It is both the digital version of trade marketing, it is the “paid search” of product search, and it is a challenger to programmatic advertising. And whereas Amazon is popularising it, there are plenty of other players in the market. Especially in Europe.
(Source: “State of Retail Media in 2022: Europe”, Innovell 2022)
State of retail media in Europe
We researched the retail media market for the newest Innovell report: “State of Retail Media in 2022: Europe” and uncovered an extremely dynamic business sector with phenomenal growth rates and new entrants every few months. There were 6 main reasons for the massive growth of retail media as we shall see below.
Obviously, the hypergrowth that ecommerce is experiencing makes the “media” itself grow, because that media is ecommerce activity. The more time consumers spend on retail platforms and marketplaces, the larger the ad inventory of retail media becomes. And as marketers, we know it quite well: users are spending a heck of an amount of time before they purchase something online, aren’t they? These online window shoppers are being monetized via retail media.
And ecommerce platforms are pushing for it. Many retail sites are expanding from brand-centered ecommerce platforms to category-focused marketplaces. This has given unicorn start-ups such as Mirakl an amazing playground to develop in, as it provides the technical platform for that endeavour.
Along with marketplace investments come a desire to monetize, and retailers are looking to Amazon’s 5% of GMV (Gross Merchandise Value) revenue from advertising for inspiration. Another 5% of margin could make a huge difference in the retail business, where low margins and high volumes have long been the norm.
But brands are pushing retail media too. They were used to investing in trade marketing to stimulate retail sales, and the new digital version of digital advertising during the consumer journey has proven to be a sales activator too.
From an organisational perspective, it is much easier to justify retail media investments with measurable impact than trade marketing budgets that are being poured into periodical retail negotiation to theoretically boost sales.
And finally, users are changing their behaviour too. We frequently hear of new surveys showing how users no longer start their product search journeys on Google but have shifted to Amazon. Users, of course, have erratic behavior and will start their journey in all sorts of places and even search simultaneously in several channels. One thing is certain though, product search is convenient and easy on Amazon and if you are a Prime member, your purchases will be delivered tomorrow. Retail search is on the rise for sure.
Show me the money
Easy, you take budget from your Google Ads and Facebook campaigns and put them into Amazon, right? Well, not really. We found hardly any evidence of that happening. Those budget streams are rarely connected directly.
The quarterly reports of the other ad platforms are not showing signs of budget transfer either. During the past few years of Amazon Ads booming, Google Ads has been increasing its own growth too. And the recent difficulties for Meta were caused by something entirely different, namely Apple’s cookie gate. A recent study from McKinsey confirms this. It estimates that 80% of retail media budgets are likely to be “net new” rather than transfers from existing advertising budgets. (Source: https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/busted-five-myths-about-retail-media)
Retail media is trade marketing digitally transformed
One of the sources for retail media funding is the shift from trade marketing. Trade marketing has existed almost since the outset of retail itself.
But where trade marketing is something that is often discussed in quarterly or annual distribution negotiations as a compensation form, retail media can be invested and optimized in real-time. And more importantly, its impact is measurable and can be put in relation to incremental value it generates.
(Purchase) data is the new oil
Retail media has product search as its engine and purchase data as its fuel. We hear often enough that “data is the new oil”, but perhaps it is in reality purchase data, a refined form of data, which could show the real value of data, as it allows advertisers to perform high quality targeting.
Most of the experts we interviewed for our report insisted on the quality and actionability of the data issued from retail. Both data from online ad platforms on marketplaces and offline from retail outlets capable of understanding the purchasing patterns via behavioural data.
Retail media is a challenger to programmatic advertising
Retail search is already a new PPC contender growing faster than most of its competitors. But on top of that, the promise of audience targeting on the basis of purchasing data from the same retail media platforms is a potential contender to win the programmatic space. Remains to be seen whether the data really is that good. If indeed it is, the epicenter of programmatic advertising could well shift towards retail-data-driven platforms in the future.
On 19 July on Hero Conf London, we will dive deeper into retail media and explore the many local pureplayers, vertical marketplaces and hybrid on- and offline grocery chains occupying the retail media space together with Amazon in Europe.
We will also propose a five-step approach to winning on retail media for brands. It applies both to those who have not started their journey and those who are already active in retail media on one or more marketplaces.
In this session you will learn:
– What the drivers of “retail media” are
– What Amazon and other marketplaces have in stock for marketers in 2022
– If and how you should position retail media in your PPC strategy
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