Marketing business-to-business (B2B) is different from marketing business-to-consumer (B2C). Although you still are selling a product to a person, experience shows that the difference between these two types of markets runs deep.
When you market to a B2B, you will realize that businesses work hard to streamline the buying process to save time and money. It often explains why a B2B purchase is based more on logic and why a consumer’s purchase often is based more on emotion.
It is true that the cost of a sale for the B2B market can be more expensive than the B2C market. The easiest way to explain this is that a B2B transaction often takes more consideration, involves more people, and requires more decision-makers. B2B clients often need to prove a return-on-investment for their purchase.
Depending on the different industries among B2B and B2C companies, the type of differences may vary, although there are three main differences between B2B payment and B2C payments. While there are additional considerations when processing payments between B2B and B2C, these three are common and applicable to most industries.
- Payment Size
Payment size refers to the average price of each transaction. Let’s consider a comparison between a B2B and B2C company. for example, a B2B company such as a law firm that specializes in patent litigation versus a B2C company such as a local cafe serving brunch. The amount of money the law firm charges per client is significantly higher than the amount of money the cafe charge per cup of coffee. Most B2B transactions are more substantial compared to B2C transactions.
- Payment Frequency
Although, the frequency of these transactions is also much different. A B2C cafe will sell significantly more orders per day, week, or year than the number of clients a patent law firm will work with during that time. Therefore, the number of transactions is typically much higher among B2C businesses compared to B2B businesses.
- Payment Terms
The last comparable difference is how the terms and decisions behind the sale are made. For the law firm, the relationship between the lawyer and the business owner plays an important part if the business owner will choose that firm to work with. Oftentimes, both businesses work with their leadership team before making any decisions or purchasing a service/product. The overall process of conducting B2B business often takes more time, therefore the payment process can be very complex and ongoing.
