(Understand in 3 Minutes) What Is B2B Sales? Explaining the Two Essential Elements for Success and the Differences from B2C Sales!

What Is B2B Sales?

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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. We will explain the details in this article.

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Differences Between B2B and B2C Sales

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Different Decision Makers

In B2C transactions, the general consumer and the decision maker are the same person. On the other hand, 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 lead time for the purchase increases due to internal approval processes.

Different Persona Settings

A persona is a concrete representation of a prospective customer, including gender, age, and personal preferences, who would purchase your company's products. 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 contact person. On the other hand, in B2B, persona settings tend to be more complex than in B2C because contact persons may resign or the department with decision-making authority may differ.

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Characteristics of B2B Sales

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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-up is essential after closing. 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.

Purchase Decisions Are Comprehensive Organizational Judgments

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

In B2B transactions, each stakeholder consolidates their opinions to make a comprehensive judgment on product selection. For this reason, 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 goal of problem-solving, but rather the beginning. Sales representatives who actively share information and work on problem-solving even after implementation are highly valued by customers. This increases reliability and allows for stable, long-term transactions, which in turn enables fundamental problem-solving.

Utilizing SFA (Sales Force Automation)

SFA is a digital tool for schedule management and sales analysis. By utilizing SFA, you can identify issues in the sales process.
In B2B sales, increasing the number of contacts without clearly defining the target is meaningless. By utilizing 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! ▶

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Characteristics of B2C Sales

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Prevalence of New Customer Acquisition

Compared to B2B sales, B2C sales are characterized by a higher frequency of 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 we noted that B2B transactions involve comprehensive judgments, B2C transactions tend to be decided based on emotion. Therefore, in B2C sales, it is important to connect the benefits of the product to the emotions of the individual customer. Furthermore, it is a characteristic of B2C sales that products are sometimes purchased solely due to 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. This is because customers may become fans of the sales representative rather than the product. Efforts are needed to ensure customers are 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 from customers, there are also many opportunities to receive gratitude, which leads to increased motivation for sales representatives.

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Why Is B2B Sales Difficult?

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Complex Sales Processes

The goal 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, the expectation for B2B sales is 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 understood and adopted, it is difficult for the client to switch to other services, making it easier to obtain stable revenue.

Increasing Clients and Avoiding Customer Dependency

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

Customer Psychology of Avoiding Sales Interactions

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. This is because customers have a psychological desire to purchase a company's products at a time of their own choosing.

However, since 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.

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B2B Sales Methods

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New Customer Acquisition

When you hear "new customer acquisition," you might imagine cold calling, but other methods such as telephone or email approaches and direct mail are also effective. In particular, handwritten direct mail 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, it is reported that "60% of customers say no four times before saying yes, but 48% of sales representatives never make a single follow-up attempt." As mentioned above, in 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 capture the interest of the contact person. Be sure to perform individual follow-ups for important prospective customers in conjunction with press releases and advertising campaigns.

Referral Sales

According to the aforementioned HubSpot Japan survey, "Consumers referred by friends are 4 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 interviews, lead directly to sales results. Additionally, a more controllable B2B measure is to list your company's products on comparison sites. Listing on highly reliable sites has the same effect as a referral from an acquaintance. By utilizing reviews in sales activities, it is possible to appeal to the raw voices of users, which are usually difficult to obtain in B2B sales.

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Two Essential Elements for Successful B2B Sales

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Identify Key Decision Makers

B2B products are often expensive, and many stakeholders are involved in the purchasing decision.
Since it is unrealistic to persuade all stakeholders by yourself, the success or failure 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 key persons within the company, 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 company's products.

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

Recommended article: Tips for Efficient Business Negotiations | Sales Strategy Planning Guide ▶

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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, it is essential for B2B businesses to identify the challenges faced by the client company and work together to resolve them as a shared objective.