Understand what is B2B, the business to business model – WAU

B2B is a business model in which the end customer is another company and not an individual (B2C). The model is also known as “Business to business” or “Company to company”.

Understanding the concept of B2B and its dynamics is fundamental to any enterprise. After all, even if the company initially acts only with final consumers, one of its aspects for more promising expansions is to focus on the corporate market, isn’t it?

For this reason, we made a strategic compact of everything you need to know about this business model, like who are your players, market variables and more. Check out!

What is B2B?

B2B is a business model in which the end customer is another company and not an individual (B2C). The model is also known as “Business to business” or “Company to company”.

The main advantages of the “Company to company” model are: greater customer retention, high number of transactions and recurring revenues.

It is a type of enterprise that has always existed, but which gradually created specific demands and strategies for optimizing sales from one company to another.

What kind of product is negotiated in the B2B market?

Anyone who thinks that B2B sales are only related to raw materials, commodities or inputs for the manufacture of a final product is wrong.

Since this is a sale between two legal entities, everything the buyer needs from the supplier is considered a viable product or service for B2B negotiation.

In this way, IT support, office supplies, equipment, vehicles, various consultancies, inputs, data storage, furniture and many others can be the subject of B2B negotiation.

What is the profile of the ideal B2B customer?

Imagine a sale made without much convincing efforts. Incredible, isn’t it? In cases like these, the characteristics and formulation of the offer of the product or service would be perfect for the buyer, that is, they would meet their needs within the conditions that they deemed fair to pay.

We can say that this is the ideal buyer, since, strategically, has needs to be met by the product and demographic and economic characteristics aligned with the offer.

It is a different concept of “persona”, which, in this case, would also take into account behavioral aspects that would influence your purchase, such as consumption habits, personal values ​​and social customs.

The persona is a more tactical tool, used for marketing campaigns and improvements to company processes. The ideal buyer can influence pricing, positioning and business strategies.

So, if ideal client and persona are different concepts, how to identify them in the B2B market?

It is possible to use your customer base as a reference to profile the B2B customer. Thus, some essential questions need to be answered, such as:

  • Which customer brings the most revenue to the business?
  • What is the acquisition cost necessary to convert it?
  • How long did the sale process take?
  • How satisfied is he?

With these questions, it is possible to identify those customers who generate more revenue and lower costs for the business, who are compatible with the business processes and are satisfied with the company.

Other strategic issues can also be taken into account, such as the location of their businesses, the area in which they operate, their economic moment, among others.

With such data, the your B2B customer profile can be traced and used as a reference for the qualification process of potential buyers and personalization of commercial strategies, including relationship.

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What are the advantages of operating in this market?

B2B customers have bigger and more complex demands, which requires longer and more personalized business processes. However, at the end of all this effort, there are some fundamental benefits.

Pricing strategy

At B2B purchases involve more significant volumes of products or services. A company will probably not buy just one or two pens, but boxes of them to keep in its stock.

Computers and even more robust elements, such as factory machinery and cars, can also be traded in larger quantities. Thus, they guarantee a better price negotiation, both for customers and companies.

B2B sellers, therefore, have a greater margin to negotiate their products. After all, they know that they will also win by the volume of sales, and not only in the profit of each product.

Customer retention through relationship strategies

As the sales process is long and requires some investments, relationship marketing, CRM tools and other strategies for extending relationships allow diluting initial expenses and offsetting funding costs.

That is, in addition to making gains with more substantial purchases, B2B also allows its funding costs to be offset over time.

Besides that, relationship strategies also ensure new business opportunities, as the company follows the evolution of the customer and manages to anticipate new needs, and can also be indicated to other partners and companies in the trade.

Recurring revenue

The extended relationship, therefore, allows the company to have recurring revenues, either through service contracts, or to identify regular purchases.

When managing B2B customers in a CRM system, the regularity of their purchases allows the company to offer proposals in line with their consumption needs. This is a way to increase the bond, guarantee satisfaction and generate business.

What are the best strategies to conquer the B2B market?

It is important to remember that, in addition to the B2B customer profile, it is also necessary to consider an important point in the negotiation: the professional buyer.

In addition to the possibility of surveying the characteristics and needs of the B2B customer, it must be borne in mind that the acquisition of the buyer or negotiator must also be in focus.

A buyer who is under pressure in his position, for example, can conduct a more tense and detailed negotiation to ensure that nothing goes wrong. If he is the owner of the company himself, he may also have a different perception of the arguments.

Here are some good practices.

Optimize sales processes

Although the negotiation is complex, the processes must be agile to prevent bureaucracies from impeding sales. Providing alternative contact channels and an efficient workflow is essential.

Focus on quality of care

The relationship is crucial for B2B commerce. Whether with the buyer or with the company’s employees who effectively use its products and services, it is necessary to guarantee satisfaction with the good relationship.

Invest in Digital Marketing

Digital Marketing strategies can help generate more sales opportunities in B2B. In addition to being more efficient and economical, they meet the process of convincing and nurturing the customer’s knowledge.

As you can see in the course of this content, B2B commerce offers advantages such as a high volume of transactions and recurrence in revenues. But it is clear that success does not happen by chance. Therefore, it is important to invest in strategies such as good relationships with customers and a good Digital Marketing strategy.

In fact, it is interesting to note that 35.9% of participating companies of the 2018 E-commerce Trends survey focus on B2B and B2C transactions, while only 5.5% focus exclusively on business-to-business.

These business modalities, of course, also require specific strategies for your audience. Read more about them, understand how they work and see the differences between B2B and B2C e-commerce.