insights! episode #40: B2B and B2C Customer Experience - the power to do justice to your target audience

Joubin Rahimi: 

Great that you're tuning in to a new episode of insights! My name is Joubin Rahimi and today it's about purchasing processes in B2B vs. B2C. And what's changed there?

First of all, why do we compare B2B with B2C? They're different purchasing processes, and B2B isn't simply just B2B either, nor is B2C simply just B2C. There's needs-based purchasing in B2B, and there's also the purchase of an investment or of something I'm especially looking forward to. If I boil that down, there are a few criteria that differ. For one, in B2C the decision is often made by one person or two people, rarely more. The cycles can be longer, but are typically fairly short. Since I also have fewer questions to ask, the decision rests directly with one person, the investments aren't as large and the reach isn't as wide. There are exceptions of course, something like solar panels on the roof, where all sorts of people need a say and so on. Moving to B2B, the tendency is that the bigger the company naturally is, the more stakeholders, more decision-makers, more processes I have to take into account. And you can of course pull that quite far apart and say B2B is completely different from B2C. But ultimately, in both areas, things have changed that we all know from B2C. And using that example, I'll run through the B2C example step by step. And then we'll move towards B2B, what's changed there.

About 20 years ago, I'm a northern German lad, a Hamburg lad, or 25, 30 years ago I was at Brinkmann. That was essentially the Media Markt of Hamburg, back when Media Markt didn't even exist in that form yet. And when I wanted to buy myself a hi-fi system as a young lad, I ended up either opening the Otto catalogue, looking at what certain attributes meant and so on, or I went to Brinkmann. That's what I did. I went to the retailer. The retailer first had a filter function in terms of range, and an advisory function directly on site, or through the attributes accordingly in the catalogue. I went to the retailer. The retailer advised me. Sony is great, does this and that, Onkyo does this and that, Pioneer here, and your budget is there, and this fits quite well, you get more power for the money there. They advised me. Then I decided on one of these products, and I probably also decided to buy it from that retailer. And afterwards the retailer was also my point of contact. Did I have a warranty case? Was something faulty? Or I had another question. That was 20 years ago. If I wanted advice outside the retailer, I might have read a magazine, like Chip or Audio HiFi, I gathered my information that way. But I had to spend money, I had to read newspapers, magazines, to get up to speed on the topic.

Nowadays it's completely different. Buyers don't go to the retailer and say, tell me what I want and advise me, instead you research right at the moment you have those thoughts — on the sofa, in the car, in the passenger seat, on public transport. What's out there? What are the price structures? Which brands have which pricing situations or which features are there? What's trendy? What's a trend around it too? I gather my information and a great deal of feedback already from the internet. Over a very long time something already forms in my head. We see it really, really well with TVs and electronics. LG and Samsung do it extremely well. When I search for it, I keep finding LG and Samsung devices and information about them, so that more and more customers say: okay, I want a Samsung. I want an LG or I want an iPhone. I want. If I want an iPhone, I want an iPhone, then there's nothing else. Or I just take a Samsung smartphone. I've already made up my mind. I might go to the retailer, but where I procure it is a completely different matter. There I just need to look at price, price and availability, and trust that it'll arrive, that if there's a problem it can be sent back easily. So that's flipped. The retailer is no longer the one who accompanies me at the start, it's ultimately the internet with the information from the internet. And then I as the customer decide myself where I procure it. And that doesn't matter. I decide where I procure it. After the purchase, if I have problems, whether with a user group or even directly with a manufacturer, who increasingly offer this too, and where I as a user — statistics also say this — have more trust. And I might also have that trust with the retailer. But the retailer has effort involved with it. They've basically already made their deal. Now it all costs them margin, they're not really willing. A manufacturer says, I'll gladly take care of it, do you have your contact details, I can turn it into something good, and manufacturers have understood much better how to use that. That's how it's changed in B2C. Now we could say B2B hasn't changed at all. Yes it has. Trade fairs changed because of Covid, for a while trade fairs simply weren't there. For two years we all gathered our information beforehand much more intensively via the internet. What products are there? In which environments are they available, and where do I want to learn and find out what, so that I can make a good new purchasing decision? And not alone, but as a group with procurement and other stakeholders. In that respect the whole thing has changed there too, from — previously I had a trade fair, previously I had a wholesaler who advised me, who maybe even came to me with a field sales rep — to I actively consulted the internet. And studies confirm exactly that. Nowadays, when I have a new investment, more than 20% always go straight to the internet first. And there's no study on how many consult the internet overall, or none that we've found, but I'd bet it's definitely more than 80% in such purchasing decisions.

Meaning, things have changed there again too. How do you deal with that? You see the B2C and B2B process de facto positioned differently, of course, because the sales processes are different. But the most important thing is, when do you have contact with your customer? Only once they say I want to buy it, then you're in the Red Ocean. Then it's only about price, availability, or much earlier, and you could advise the customer as well as possible, give them great trust, and thereby already have service and a price that makes sense for all customers and for you, so you can still offer the follow-up demand for a process, for services, just as well. On the one hand, what I want to say is, B2B and B2C have different buying processes, but the fundamental mechanisms are changing right now for both areas. How do you experience that? Do you see changes like this? How are your field sales staff changing in combination with your system? We'd love comments and suggestions below in the comment and discussion fields. If you liked this, like it, click subscribe, turn on our newsletter, and you'll always get more information nuggets for your business.