[3-Minute Read] What Is B2B Sales? Explaining the Two Essential Elements for Success and the Differences from B2C Sales

What Is B2B Sales?

B2B (Business-to-Business) sales refers to the sale of products or services and transactions between companies. Specifically, in B2B sales, one company provides products or services to another, and the transaction occurs between legal entities. Key characteristics include complex decision-making processes and a requirement for higher professional expertise. It is generally contrasted with B2C (Business-to-Consumer) sales, and there are many differences in sales styles. This article will explain the details.

Differences Between B2B Sales and B2C Sales

Different Decision Makers

In B2C transactions, the general consumer and the decision maker are the same person. In contrast, in B2B transactions, the person being sold to and the decision maker are different.
In B2B transactions, the authority to approve a purchase lies with the company's CEO or executives. When multiple people are involved in a purchase, the internal approval process can lead to a longer sales cycle.

Different Persona Settings

A persona is a specific representation of a target customer who might purchase your product, including details such as gender, age, and interests. This differs between B2B and B2C. In B2C, persona settings involve collecting information directly related to general consumers, such as age, gender, family structure, and place of residence.

In B2B, since an organization uses the product or service, it is necessary to collect information about the company, the organization, and the individual in charge. On the other hand, B2B persona settings tend to be more complex than B2C because the person in charge may resign or the department with decision-making authority may differ.

Characteristics of B2B Sales

Prevalence of Route Sales

B2B sales are characterized by a high frequency of route sales, where existing customers are visited regularly. Unlike B2C transactions, which may end after the sale, follow-ups are essential. It is necessary to improve skills in listening to existing customers and proposing solutions to perform cross-selling and up-selling, thereby increasing the average customer value.

Purchasing Decisions Are Organizational Judgments

As mentioned, multiple people are involved in B2B purchasing. For example, a sales representative might propose a product to the sales department of a client company and gain their interest. However, the manufacturing department might want different features, leading to conflicting opinions.

In B2B transactions, each stakeholder's opinion is consolidated to make a comprehensive judgment on product selection. Consequently, the time until a contract is signed is typically long.

Long-Term Problem Solving

The goal of B2B sales is to solve corporate challenges. In many cases, service implementation is not the end of the problem-solving process, but rather the beginning. Sales representatives who actively share information and work toward problem-solving even after implementation are highly valued by customers. This increases trust and enables stable, long-term transactions, which in turn allows for fundamental problem solving.

Utilizing SFA (Sales Force Automation)

SFA is a digital tool for managing schedules and analyzing sales. By utilizing SFA, you can identify issues in the sales process.
In B2B sales, simply increasing the number of contacts without a clear target is meaningless. By using SFA to accumulate small improvements and strengthen the sales process, you can lead to successful closures.

Reference Article: What Is SFA (Sales Force Automation)? Explaining Basic Functions, Implementation Methods, and Keys to Adoption! ▶

Characteristics of B2C Sales

Frequent New Customer Acquisition

Compared to B2B sales, B2C sales are characterized by more frequent new customer acquisition. Since many products are inexpensive and purchases can be completed solely via the web, costs are generally lower than in B2B.

Purchasing Decisions Based on Emotion

While B2B transactions are based on comprehensive judgment, B2C transactions tend to be decided by emotion. Therefore, in B2C sales, it is important to connect the product's benefits to the individual customer's emotions. Another characteristic of B2C sales is that products are sometimes purchased based solely on the charm of the sales representative.

However, a disadvantage is that if the sales representative is transferred or resigns, the likelihood of contract cancellation increases, as the customer may have become a fan of the representative rather than the product or the company. Efforts are needed to ensure customers become interested in the product and the company as a whole.

Direct Access to Customer Feedback

In B2C sales, since the general consumer and the decision maker are the same, you can hear more direct opinions. While there are many opportunities to receive direct complaints, there are also many opportunities to receive gratitude, which can boost the motivation of sales representatives.

Why Is B2B Sales Difficult?

Complex Sales Processes

The purpose of B2C sales is to improve satisfaction when using the product, and needs are limited to those related to the product. On the other hand, B2B sales are expected to generate profit for the client company. Since this includes consultative proposals beyond the product itself, such as "store shelf layout" or "labor saving," continuous information gathering is essential. Although the B2B sales process is complex, once a service is understood and adopted, it is difficult to switch to other services, making it easier to secure stable revenue.

Increasing Clients to Avoid Customer Dependency

The number of customers in B2B sales tends to be smaller than in B2C. As mentioned, because B2B transaction amounts are large, there is a tendency to be overly dependent on a single company. If external factors like the COVID-19 pandemic cause a client company's management to falter and a rare transaction ends, the loss to your own company can be immeasurable. It is important to strive for continuous new customer acquisition while also ensuring transactions are diversified.

The Existence of Customer Psychology That Avoids Sales Contact

Many customers believe it is more convenient to purchase via a website before having contact with a sales representative. This is one of the most difficult aspects of B2B sales because customers have a psychological desire to purchase a company's products at a time of their own choosing. However, because some products are specialized and complex, the intervention of a sales representative is indispensable. Therefore, to engage in B2B sales, it is important to build a sales process that makes customers want to purchase from you even before you have direct contact with them.

B2B Sales Methods

New Customer Acquisition

When you hear "new customer acquisition," many may imagine cold calling, but other methods such as phone or email approaches and direct mail are also effective. Handwritten direct mail, in particular, is highly effective in B2B sales as it is more likely to elicit a response from decision makers such as executives. There are various other new customer acquisition methods, including web-based approaches.

In B2B sales, large amounts of money often move in a single transaction, and a large percentage of sales is often generated by a few high-value customers. In B2B new customer acquisition, quantity is important, but quality is equally important.

Reference Article: Explaining the Basics of New Customer Acquisition and 20 Sales Methods in Detail. ▶

Follow-Up

According to "60 Important Statistics to Help Improve Sales Activities" by HubSpot Japan, "60% of customers reject a proposal four times before closing, yet 48% of sales representatives never make a single follow-up attempt." As mentioned above, for B2B companies, a few high-value companies are more important than anything else. Ideal follow-up content includes announcements of event appearances or new service releases that pique the interest of the client's contact person. Be sure to perform individual follow-ups for important prospective customers in conjunction with press releases and ad distribution.

Referral Sales

According to the aforementioned HubSpot Japan survey, "Consumers referred by friends are four times more likely to purchase, and prospects referred by other customers have a 37% higher retention rate." It goes without saying that people are more likely to trust a referral from a well-known friend or industry peer than words from an unknown salesperson. Efforts to improve usability, such as new feature releases and feedback sessions, lead directly to sales results. Additionally, a more controllable B2B measure is to list your products on comparison sites. Listing on highly reliable sites has the same effect as a referral from an acquaintance. By utilizing reviews in your sales activities, you can appeal to users through authentic voices that are usually difficult to obtain in B2B sales.

Two Essential Elements for Successful B2B Sales

Identify the Key Decision Maker

B2B products are often expensive, and many stakeholders are involved in purchasing decisions.
Since it is unrealistic to persuade all stakeholders by yourself, the success of the sale depends on whether you can create a key person on the client side who will push for the introduction of your product.
It is important to actively seek contact with internal key persons, such as project managers or department heads with decision-making authority.

Capture BANT

BANT is a B2B sales framework consisting of four English words: Budget, Authority, Needs, and Timeframe. By conducting sales with BANT in mind, you can efficiently promote the introduction of your products.

◯ Budget = Available budget limit
◯ Authority = Decision-making authority for purchase approval
◯ Needs = Requirements and requests for the service
◯ Timeframe = Service implementation timeline

Recommended Article: Tips for Efficient Negotiation Progress | Sales Strategy Planning Guide ▶

Summary

In this article, we have explained the differences and challenges between B2B and B2C sales. While both require building long-term relationships with customers, B2B sales specifically require delivering messages to decision-makers to ensure continued business. In this context, identifying and solving the challenges of the client company as a shared objective is essential for success in B2B business.