When it comes to brand strategy, the basic principles and frameworks for branding are relatively similar between B2B and B2C. However, there are a few characteristics common to many B2B businesses that should be taken into consideration. These characteristics have implications for how brand strategy development needs to be different in B2B.
The remainder of this post will cover five “generalizations” about the nature of B2B businesses, each of which has implications for branding. While there is undoubtedly variability across B2B businesses, the following tenets hold true for many B2B organizations.
1) BUSINESS COMPLEXITY
In general, B2C products tend to be simple and more straightforward, like those in the consumer- packaged goods industry. Even relatively more sophisticated B2C products, like televisions and automobiles, still only require a manageable level of knowledge and research.
B2B products, on the other hand, tend to be more technical. Many require at least a base level of expertise to use effectively. Even when B2B products appear to be simple and straightforward, they are often components of more complex solutions. B2B products also frequently require customization to meet the needs of customers.
The decision-making process is also different. Individuals generally make B2C purchase decisions, but B2B purchase decisions are usually made by groups, committees, or procurement departments. Formal processes may also need to be included in a B2B environment, such as lengthy proposals and pitch presentations. While B2C brands need to be relevant to individuals, B2B brands must do the same for a broader group of people.
B2B purchases tend to be highly considered and not very straightforward. It’s harder to explain your product. Getting your message across typically takes a lot more thoughtfulness than for your typical consumer packaged goods item that shows up in a grocery store.
2) SALES CYCLE
Sales cycles also tend to differ between B2C and B2B. Many B2C categories have very short cycles, while B2B companies tend to have longer cycles. This is in part due to the number of participating stakeholders and the formal processes involved for B2B companies.
As a result, the role of branding in the B2B purchase decision process is slightly different. With B2C, purchases are often more impulsive and less involved. In the case of B2B, the longer sales cycle causes the objectives of branding to shift. The focus needs to be on building confidence and trust with customers over multiple phases of longer, more complex sales cycles. When the sale is over, it may still take additional months or years for a B2B customer to form a solid impression of the purchased product or service.
Sales cycles are long, and product use cycles are even longer. It can take a long time—even several long purchase or sales cycles—to establish credibility and build brand trust.
3) PURCHASE PRICE AND COMMITMENT TERMS
B2C purchase prices vary widely, but in general, they tend to be less expensive than B2B purchases and require far less of a commitment. Consumers are often motivated by low price points, deals, and discounts. Even so, outside of a few highly price-sensitive consumer segments, cost is rarely the sole driver of purchase in the case of B2C.
Conversely, B2B purchases tend to be higher dollar value, and many represent long-term investments. Binding contracts between the supplier and customer may be necessary. Even if those contracts don’t involve exclusivity, the hard and soft costs associated with switching are often limiting and prohibitive. These factors raise the stakes on getting it right the first time, placing elevated pressure on the brand to instill confidence and trust among its customers.
4) FEWER CUSTOMERS, FEWER SEGMENTS
Unlike in B2C, B2B companies tend to compete for business among a smaller set of prospective buyers. B2B companies with fewer than one hundred customers are not uncommon. Even a small handful of customers can account for the vast majority of a B2B company’s revenue and proportion of profits.
One outcome of having fewer customers and prospects is that B2B markets generally have fewer needs-based segments. A low number of segments can only be divided so finely before distinctions in the segmentation become meaningless. Additionally, B2B customers’ needs tend to differ to a smaller degree than the needs of buyers in consumer markets. Quality seekers, price-sensitives, best-in-class performance drivers, and collaboration seekers are some common B2B attitudinal and needs-based segments.
5) IMPORTANCE OF RELATIONSHIPS
Generally speaking, B2C tends to be more transactional than relational. The depth of customer relationships, even with digital marketing and other advances in activation, cannot compare to the personal face-to-face relationships found in many B2B businesses.
In fact, B2B branding is all about building customer relationships. The brand must stand for something greater than the product or service it sells. It must house an entire solution or offering, providing an experience that is desirable to customers and in line with the promise of its brand positioning. Many B2B customer-supplier relationships consequently carry high levels of loyalty and multiyear engagements.
Our brand strategy consultants have deep expertise across the full range of branding services, crossing both B2C and B2B brands. As a leading brand consulting firm, we help clients build strong brands and businesses. Contact us to learn more about our branding and marketing services.
