What is the difference between B2B & B2C marketing research?

Before we look at the differences between business-to-business (B2B) and business-to-consumer (B2C) markets, we need to first consider what they have in common.

First, B2C and B2B marketers ultimately have the same job, which is to create and maintain demand. Therefore, there is a lot of overlap in the types of marketing research projects that are conducted in B2C and B2B. For example, businesses need to test new product ideas, whether they will sell it to businesses or consumers.

Second, when a purchase is made in B2B markets, the final payment may come from a company bank account, but the decision to make the purchase is still made by a person (or a group of people).

These decision-makers are also consumers, and their needs and attitudes do not entirely disappear when they are at work. For example, a report by Adobe/Forrester identified three behaviors that are shared by business decision-makers and consumers: “The desire to remain anonymous. The tendency to seek input and opinions from other users before making a purchase. The amount of emotions involved in the decision making.”

While similarities do exist, there are many differences between B2C and B2B markets, which can be grouped into three areas:

• Who is being sold to (target audience)
• What is being sold, and where (product + distribution channel)
• How the purchase is made (buying process + decision criteria)

This article explores each difference in detail and outlines their implications for B2B marketing researchers.

 

1. Who is being sold to – fewer customers, larger decision-making units, full of hard-to-engage individuals

There are far fewer customers to sell to in B2B.

In 2017, the U.S. government reported approximately 6m active U.S. businesses. In 2019, they stated there are about 255m consumers over the age of 18.

That means there are roughly 42 times more consumers than businesses in the U.S. This is a very crude measure, but it illustrates a critical point.

The implication for B2B researchers: you need to be comfortable with smaller sample sizes. In B2C studies, there may be several thousand responses to a quantitative survey.

In B2B studies, the target audience for a product may be less than a hundred. So prepare for the fact that recommendations may be based on a relatively small number of interviews.

The gap between the highest spending and lowest spending customers tends to be much higher in B2B markets.

Many people are already familiar with the Pareto Principle, which is the idea that 80% of revenue comes from only 20% of customers.

The Pareto Principle is a lot more common in B2B markets than consumer markets, although it is not exclusive to B2B. For example, academic research has found that the Internet gambling industry follows the Pareto Principle.

The implication for B2B researchers: studies should account for these large accounts. One solution is to bias the research towards larger accounts.

Large accounts may represent 20% of customers, but if they represent 80% of revenue/profit, more than 20% of interviews should be with large accounts.

You can achieve this by sampling during the research, or by weighting the results once you complete the study.

While there are fewer B2B customers in general, the decision-making unit of a B2B customer is substantial.

In a household, the ‘decision-making unit’ (DMU) is quite simple. Generally, an individual makes a purchase by, or for, themselves.

Sometimes things are more complicated. For example, a parent purchases a product for their child. Or a family member may purchase for themselves, but have been influenced by another family member.

In B2B organizations, the DMU is much larger. The final decision-maker may be influenced by, or have to justify themselves to, multiple other stakeholders. Let’s take the example of a Marketing Director purchasing some software to add to their ‘Martech stack.’

While the Marketing Director may be the person who is nominally leading the process, there are likely to be several other key stakeholders:

• Many stages may be conducted by a member of the Marketing team who reports into the Marketing Director. For example, the individual who’d be using the product day-to-day might be asked to compile an initial short-list of options, or to test the different options
• Other members of the Marketing team may share their own opinions based on past experiences with the different brands
• The Marketing Director may have to inform his manager about the purchase to get final approval
• The I.T., finance, and procurement departments are also likely to play a vital role, often as ‘gatekeepers.’ These departments are unlikely to have an opinion on which SaaS solution is best for the marketing team, but they can approve or reject a solution. Procurement departments may reject an option as too expensive, I.T. departments may reject a solution as being too challenging to integrate into existing systems
• Other departments may also provide some input to decisions, especially if the software impacts or benefits them

The implication for B2B researchers: when deciding who to speak to in interviews, you should pick personas who influence or make decisions, rather than individuals who are on the fringes.

Studies should often include multiple personas to ensure that you’re getting a complete view of decisions. Not only that, consider interviewing more than one person from the same company, as this can help to develop richer insights.

Not only that, the decision-making unit can be volatile.

Business professionals continuously move roles and companies. The decision-maker for one purchase can suddenly disappear. While the relationship with the company remains, the relationship with the individuals within the company must start anew.

It is different in consumer markets. For example, let’s say you are selling life insurance to a long-term customer. While their life situation can change – for example, maybe they suddenly win the lottery – the individual does not suddenly disappear. The relationship that you built is still there.

The implications for B2B researchers: building and managing research panels can be challenging, as it takes time and money to ensure panelists’ information is up-to-date and accurate.

These business decision-makers are typically harder to locate and engage.

Business decision-makers are time-poor, and focused on their role, not on consuming marketing materials or taking part in research. So it is challenging to recruit them, and incentives are sometimes required.

Not only that, but some professionals also have gatekeepers such as P.A.s or secretaries. Reaching the decision-maker requires convincing such gatekeepers that you are worth their boss’ times.

Implications for B2B research: given the target audience is so small and hard-to-reach, each potential interviewee needs to be treated with care by experienced practitioners.

Getting past gatekeepers is an art, and someone who has done it many times before is likely to be more successful.

And once a decision-maker has agreed to take part in research, it’s vital not to waste the opportunity. Skilled interviewers are essential to ensure that interviewees remain engaged and ‘open up.’

To do so, B2B interviewers need a detailed knowledge of the topic and industry, besides all of the usual interviewing skills.

Decision-makers’ inaccessibility also means that face-to-face methodologies are often impractical. Business professionals are often reluctant to travel to a separate location for a focus group.

Similarly, many are uncomfortable inviting researchers to come to their workplace for an interview. For example, some companies’ security measures mean that it would be time-consuming to obtain permission for a researcher to visit.

Finally, the information that you need to gather about customers is different.

In B2C markets, you should focus on demographic information that tells you who the buyer is as a person. That means their age, gender, income, hobbies, etc.

In B2B markets, these demographics are often irrelevant. A 30-year-old Marketing Director and a 60-year-old Marketing Director may have different attitudes or preferences, but the constraints put on them by the organization may lead them to make the same decisions. Age is less important than the type of organization to which they belong.

Implications for B2B research: there should be more focus on ‘firmographic’ factors such as company sector, company size, job title, seniority.

Job-related factors are particularly important given the size of decision-making units, as you need to adapt your approach and messaging to each buyer type.

2. What is being sold, and where – more complex, expensive products, distributed through more channels

Spend on products tends to be higher in B2B markets than B2C markets.

While most B2B organizations sell to fewer customers, those customers may, on average, spend more. For example, a company buying enterprise software may buy the same product multiple times – one for each employee.

Not only that, the cost of each product is often higher in B2B markets. For example, an enterprise firewall can cost as much as $250,000. Very few consumer products come to that value.

Products are more customized and complex.

Most consumer products have historically been standardized.

The rise of 3D printing, automation, and ‘near-shoring’ may lead to more customization of some consumer products, e.g., running shoes. But the nature of B2B markets means that it is always going to have more customization, and therefore more complexity.

B2B organizations tend to have precise requirements to ensure that a product is the ‘right fit.’ Requirements can differ significantly by industry, geography, distribution, and spend.

Because B2B buyers tend to spend more on products, vendors have more of an incentive to provide the customization that they’re requesting.

In consumer markets, it may not make financial sense to provide all of the customization that consumers require.

Implications for B2B researcher: first, qualitative research is often essential when you are exploring attitudes to products and services. That is because in-depth conversations are the only way to explore the complexity properly.

These qualitative discussions need to be led by expert researchers who can grasp the specifics of the product and the industry.

When recruiting decision-makers to participate in research, giving them the opportunity to feed into the future design of a product can often be enough to incentivize them to take part.

B2B products are more likely to be sold through multiple distribution channels.

B2C and B2B products are often sold through multiple distribution channels.

For example, a company manufacturing a protein bar may sell its products:

• Directly to consumers from its website or its retail stores
• Indirectly through distributors, wholesalers, brokers or other retailers

Each channel can have different inventory, pricing, packaging, and even products. For example, some printer manufacturers offer exclusive units to channel partners.

B2B markets tend to have more complexity than B2C markets. In other words, B2B organizations are more likely to have multiple channels, and the channel structure is often more complicated.

Implications for B2B researchers: you need experts to understand the complex channel structure.

Additionally, studies should be set up so that they factor in every channel. For example, if you are trying to identify ways to improve a product, you shouldn’t just speak to end-users. Consider talking to the channel partners who sell to end-users, and may have a useful perspective.

3. How the purchase is made – longer buying journeys which lead to (slightly) more rational decisions

The buying journey is longer, as it has more stages and stakeholders.

B2B purchasing decisions are critical:

• B2B products tend to be more expensive than B2C products
• B2B customers often have limited ability to switch supplier due to the associated time/cost, or because of a lack of alternatives

To minimize the risk of making the wrong decision, organizations:

• Attempt to involve multiple people in purchasing decisions. For some purchases, committees are formed to research and evaluate options
• Undertake a multi-stage buying process. That may involve steps such as: writing an RFP to outline the requirements for the product; building a long-list through desk research and word of mouth; evaluating options to create a short-list; testing short-listed options to identify which solutions work best; obtaining internal approval to proceed with the preferred choice; getting client references from the selected vendor. Some B2B purchases can take several months, and a small number can take even longer

Implications for B2B researchers: qualitative research is often needed to understand long, complex buying journeys properly. For example, we need to understand the interpersonal dynamics that influenced the decision.

Studies should also try to include many of the individuals who were involved in the decision-making process, even if they weren’t the primary decision-maker. The goal should be to understand their objectives, as well as their impact on the decision.

B2B customers require more information throughout the buying process.

Throughout the buying journey, B2B buyers require a lot of detail about the product or service they are purchasing.

They expect content that is customized to their specific requirements. That sometimes means content that is tailored to their job title. In certain instances, they expect content that is customized to their company.

B2B purchases are (slightly) less emotionally driven.

All purchases have an element of emotion, particularly in consumer markets. For example, Coca Cola tries to create demand by reminding consumers of the feeling they had the first time they tasted the drink.

B2B decisions tend to be more rational for a few reasons:

• B2B decision-makers have to factor in business realities when they make a decision. For example, a buyer has to justify themselves to their colleagues. They cannot credibly purchase a product that is significantly more expensive than similar competitors, even if they are attached to the brand
• There are more decision-making criteria, and these criteria are often more detailed/sophisticated. That is especially true if the buyer uses an RFP process in which vendors are ‘scored’ for their performance in specific criteria. This more structured approach makes it more difficult for certain emotional factors to influence decisions
• B2B buyers also tend to look at the big picture more than consumers. For example, ‘lifetime cost’ is more of a consideration in B2B markets

But emotion is still a driver of B2B decision-making. To give just three examples:

• B2B markets are often defined by strong relationships between buyers and their Account Manager. These relationships can survive even if a competitor’s product becomes market-leading
• ‘Fear of the wrong decision’ drives behavior. As a result, brands that convey integrity and reliability often dominate B2B categories. Hence the saying ‘nobody gets fired for buying IBM’
• Change is expensive and time-consuming, and there can be a tendency to avoid it for an ‘easier life’

Implications for B2B researchers: the design of B2B market research should reflect the more structured and rationalized approach to decision-making. For example, qualitative techniques can be used to elicit specific decision-making criteria and metrics.

At the same time, research shouldn’t ignore the role of emotion in decisions. A variety of techniques should be employed to explore emotional drivers. For example:

• Projective techniques can be used in qualitative studies to identify underlying emotions
• Statistical techniques can be used in quantitative studies