There are approximately 4.1 million companies in Japan, each of which conducts various businesses and transactions (commerce), and provides products and services. Recently, companies and organizations that are developing new business fields that are not limited to products and services have appeared, and until now, “industry” has been used as a standard for classifying such a wide variety of companies in the business field. There have been many different classification methods, such as “company size” and “company size.”
Among the many classification methods, one that has become established in recent years is the method of dividing business models by “the parties with whom they do business.” For example, everyone has probably heard of the term BtoB at least once. This is one of the names used when companies are divided according to their business partners. A company that conducts business or commercial transactions with a corporate corporation (Business) is a “BtoB (Business to Business)” company. model) itself is called BtoB. Depending on the media, “to” may be replaced with “two” and expressed as B2B, but the meaning is the same.
Also, in addition to BtoB, we often hear the term BtoC (BtoC), but this is BtoC (Business to Customer) because the business partners are individual consumers.
Furthermore, recently there has been an increase in business formats in which individuals conduct business transactions with individuals, and this is called CtoC (Customer to Customer). Business entities are not limited to companies or corporations; in other words, everything can be classified into several business models depending on the combination of “who the business entity is” and “who the business partner is”. It will be.
Among these, BtoB is the basic concept that companies must understand when building marketing and sales strategies.
Therefore, in this article, what is BtoB? We will explain this while comparing it with other transaction formats, and will explain how purchasing flows, processes, and decision-making methods change when the trading partner (target) changes, as well as examples of companies that have succeeded in BtoB. By introducing the above, I would like to deepen your understanding of BtoB.
What is BtoB? Basics and other business models
Business models other than BtoB, including the aforementioned BtoC and CtoC, include the following. Before we explain BtoB in detail, let’s briefly review it as a peripheral concept.
business model who to whom
BtoB (Business to Business) A company becomes a company
BtoC (Business to Consumer) companies become consumers
BtoG (Business to Government) Companies to government and public institutions, etc.
BtoE (Business to Employee) A company that deals with its own employees
CtoC (Business to Consumer) Individual to individual
GtoC (Government to Consumer= Citizen) Government to general consumers (citizens)
DtoC (Direct to Consumer) Manufacturers directly to consumers
BtoBtoC (Business to Business to Consumer) companies connect businesses and individuals
BtoB
BtoB is a business model in which businesses provide products and services to other businesses.
Although they are not directly purchased by general consumers, in many cases they are an indispensable element behind the scenes of products and services.
For example, various products and services such as automobile parts, computer CPUs, corporate website construction services, and product packages are supported by BtoB transaction formats.
BtoC
BtoC is a business model in which businesses provide products and services to general consumers. Compared to BtoB, the unit price per order is often low (of course there are exceptions such as houses and luxury cars), and the key to the business model is how to increase sales by distributing a large number of products and services.
For example, almost everything that individuals use or purchase on a daily basis can be considered BtoC, from convenience stores, supermarkets, electronics stores, drug stores, etc. to transportation services such as taxis and trains, and accommodation.
BtoG
BtoG is a business model in which businesses provide products and services to government agencies.
General consumers are not usually aware of it, but public works projects such as road maintenance, railway construction, and construction of government buildings are easy to imagine as concrete examples. In addition, IT-related cases such as building network infrastructure within ministries and agencies and operating sites are also increasing.
BtoE
BtoE is a business model in which businesses provide products and services to their employees.
For example, companies that sell their own products to employees, cafeterias, and in-house convenience stores come to mind. Up until now, these have been more of a welfare benefit than a business, but in recent years, employees have been treated as consumers, and by getting them to become fans of their products, they have been spreading high praise on SNS. There are many companies that are putting effort into getting their customers to use their products.
C2C
CtoC is a business model in which individual consumers provide products and services to other individuals. With the spread of the Internet, smartphones, and apps, this business has expanded rapidly in recent years as an easy-to-enter business.
For example, transactions between individuals on sites such as Mercari and Yahoo! Auctions fall under this category. With the spread of platforms such as Mercari and Yahoo! Auctions, an environment has been created where consumers can buy and sell directly to each other without having to involve a vendor. Of course, even though it is a direct transaction, the company operating the platform operates a B2C business by collecting fees from users.
GtoC
GtoC is a form in which governments such as municipalities provide products and services to citizens (consumers).
Examples include electronic application for resident card, online tax declaration using e-Tax, and electronic reservations for public facilities. Basically, there are many services aimed at reducing the burden on citizens, such as by simplifying necessary procedures or allowing them to be completed without having to go to a counter.
DtoC
DtoC is a business model in which manufacturers provide products directly to consumers.
It has always been common practice for manufacturers to cut out intermediaries such as trading companies and sales subsidiaries and provide products directly to consumers themselves. However, this method was limited to catalog sales and mail-order sales through direct mail, and it did not become very popular.
However, in recent years, with the spread of smartphones and the ability to directly appeal to many consumers on SNS, an increasing number of manufacturers are building their own e-commerce sites to provide products and services. .
This is a business model that is expected to become more and more popular in the future, as there are no stores and almost no sales personnel are required.
BtoBtoC
BtoBtoC is a business model that generates profits by connecting companies and individual consumers. It may be a little difficult to understand, but a typical example of BtoBtoC is when a platform such as Amazon purchases products from manufacturers and sells them to consumers.
This is also one of the business models that is expected to expand the market as network infrastructure becomes more widespread.
Differences between BtoB and other business models
Up to this point, we have comprehensively looked at BtoB and other business models, but the crucial difference between BtoB and other business models is that the person providing the product or service is the one receiving the product or service. The problem lies in the fact that we cannot experience it. More specifically, the person providing it cannot directly “try” it.
In the example mentioned above, the “PC CPU” is supplied by BtoB, and of course it is possible to measure numbers and performance such as processing speed and durability. However, since it is actually sold by being built into a computer manufacturer’s product, its performance is interdependent with the other performance of that computer. The actual performance of the CPU becomes difficult to see due to various factors such as memory capacity, platform performance, and storage device format.
On the other hand, in the case of BtoC, products and services such as food and beverages that are often commercialized after being tested by the product development department of the manufacturer themselves, and clothing that can be tested until they are completely satisfied with their comfort. Developers and marketers can use it themselves as consumers, and as consumers themselves, they can directly confirm its merits and demerits.
For this reason, it is said that planning marketing and sales strategies in BtoB is more difficult than in BtoC, and the real thrill is certainly in mastering this. Therefore, in the next section, we will look at BtoB
marketing strategies
while sorting out the characteristics of buyers in BtoB and the differences from BtoC.
How are things bought in BtoB? Purchasing flow and marketing needs
First, let’s look at the characteristics of BtoB purchasing behavior.
Companies and corporations view products and services from a different perspective than consumers.
・For corporate personnel, corporate profits are the top priority.Corporate
personnel select products and services from the perspective of being a member of a company that pursues profits. Therefore, the most important consideration is whether or not the product or service brings benefits to the company.
For example, always consider the benefits of your company, such as whether using the product or service will increase profits, improve labor productivity, or improve the image from a corporate brand perspective. Make a choice. In addition, in order to continue the company’s business, companies also make choices from the perspective of whether the product or service will continue to be provided forever.
For example, when a transportation company purchases a delivery vehicle, it considers not only the installation cost and fuel efficiency of the vehicle itself, but also its quietness, environmental performance, and whether the shape of the vehicle leaves a favorable impression when driving around town. Consideration was given from many perspectives, such as whether it would be easy to get on and off the vehicle and efficiently shorten delivery time, whether the desired number of vehicles would be available, and whether stable maintenance and inspection services would be available over a long period of time. The focus will be on one product.
On the other hand, when consumers choose their own car, they basically choose based on their personal taste and brand. Of course, we place emphasis on cost, but that is just one of the criteria: something that meets your needs as much as possible within your budget. For this reason, in order to choose from your favorite design, color, brand, etc., you will ultimately have to make a selection based on a wide range of criteria.
-Purchasing decisions are made by organizations, not individuals.Another
characteristic is that purchasing decisions are made through organizations, not individuals, unless the company is very top-down. When trying to incorporate a single product or service, if it is inexpensive and does not have much of an impact on company operations, the person in charge and the section manager can approve it, but the importance of the product or service and the As the purchase price increases, the number of people involved in decision-making will increase, including business managers, general managers, and presidents.
・The process to make a purchase decision is long
As mentioned in the previous section, decision-making moves through the organization in stages, so in BtoB there are many processes to make a purchase decision, and it takes a long time. This is because decisions are not made impulsively like in BtoC, but are controlled by internal rules to ensure decisions are made rationally and objectively.
In addition to the large number of people involved in decision-making, there are many criteria for making decisions, including comparisons and considerations with other companies in the same industry, functions, after-sales follow-up, cost-effectiveness, and in some cases, the business status and credit information of the provider company. Because of the large number of customers, the process leading up to a purchasing decision tends to be long.
・Once a transaction begins, it often becomes a long-term business relationship.Products
and services that have been repeatedly considered and purchased over a long period of time often become long-term business relationships. This is because changing a transaction that has been decided upon after careful consideration carries great risks, such as the loss of time, effort, and expense in searching for a new business partner. Therefore, a major feature of BtoB is that once a transaction begins, the business relationship continues for a long time unless there is a major failure or a major change in the situation.
In addition, the perspectives of corporations and individuals can be summarized as follows.
Why is BtoB marketing necessary?
BtoB marketing that has not been emphasized in Japan
Marketing is about understanding the characteristics of buyers and then building “strategies, mechanisms, and processes that create the value that customers want.”
Peter Drucker
said, “The ideal of marketing is The purpose of this is to create a situation in which customers naturally want to buy without having to carry out sales activities.
In recent years, in response to changes in the global economic situation, an increasing number of companies have begun conducting full-scale marketing in Japan. However, most of these efforts were aimed at B2C, and less emphasis was placed on marketing that could clearly be considered B2B.
I believe that this is because a sales pattern has been established in BtoB, as exemplified by so-called “route sales.” . For example, a telephone appointmentter makes an appointment over the phone, and a salesperson visits. Results were obtained by conducting walk-in sales without an appointment and using the sales skills of salespeople to win contracts, and by establishing sales offices in various locations and making connections with local companies.
Approach new channels with BtoB marketing
However, from now on, marketing activities will become essential even in BtoB. There are various factors contributing to this, but the biggest one is probably the fact that customer companies have started gathering information on the Internet.
Until about the first few years of the 21st century, activities including participation in exhibitions, advertising in trade magazines, tele-appointments, walk-in sales, and other sales activities were still effective as marketing channels, but since then, the Internet has become increasingly popular. As marketing has expanded, it has become commonplace for BtoB businesses to use websites as a source of information on products and services.
In such a situation, the method of salespeople visiting purchasing staff and cleverly slipping in useful information during small talk to seal a contract is no longer effective. Moreover, due to the current coronavirus pandemic, sudden visits without an appointment are out of the question, and even normal business negotiations are not allowed in person and must be conducted over a network.
This is a big reason why BtoB companies should also implement marketing.
Know the difference between BtoB marketing and BtoC marketing
Let’s understand what BtoB marketing is and how it differs from BtoC.
Differences between BtoB and BtoC
- Impulse buying is impossible in BtoB.
In the marketing activities of BtoC companies, if they can directly approach the emotions of general consumers, even if it is temporary through image strategies, it is possible to convert them into purchases. It is quite conceivable that the use of highly sensitive talents in TV commercials and appeals through conspicuous in-store POPs will motivate people to make purchases.
On the other hand, in BtoB, such impulsive purchasing behavior is impossible.
As mentioned above, companies consider purchased products rationally and objectively. Therefore, companies trying to sell their products and services need to conclude commercial transactions by logically appealing to customers about the superiority of their products and work. This is because the person in charge in front of you does not have the authority to make decisions, and even if you make a good impression on the person in charge, that does not mean that a deal will be concluded. This is because it is unavoidable to convince multiple decision makers within the company who are standing behind them.
BtoB marketing requires a theoretical and objective approach that emphasizes evidence.
- Awareness of corporate brand
For BtoC companies, brand power has considerable meaning and power. This is because brand image makes a product more attractive and leads to general consumers’ desire to purchase it.
However, brand power is not very important for BtoB companies. Even if a company does not have a well-established brand image, if you can make people understand the merits of its products and services theoretically and objectively, a deal will be concluded. Since purchasing decisions are made through a rational process, the most important point is how to accurately communicate how beneficial a product or service will bring to the other company.
What is a typical BtoB marketing cycle?
8 processes of marketing cycle
Now, let’s take a look at a diagram that summarizes the typical BtoB marketing activities as a series of cycles to see what kind of activities are actually carried out in BtoB marketing.
This is a diagram that breaks down BtoB marketing activities into eight parts and diagrams the process. Let’s take a look at each one.
Citations/References:
What is BtoB marketing? 8 activities and 20 methods, the latest trends such as how to proceed and digital utilization
Reference source for the above diagram:
ALUHA Co., Ltd. What is BtoB Marketing? 8 activities and 20 methods, the latest trends such as how to proceed and digital utilization
1. Understand customer needs Analyze the various needs accumulated through customer satisfaction surveys and potential customer (lead) needs surveys, and determine what issues customers and prospective customers (leads) would like to solve even if they pay the cost. Is it? To know.
2. Development of products and services that sell We develop and improve products and services by leveraging our company’s strengths in response to “problems that we want to solve even if we pay the cost.” Or adding value to existing products and services. At this stage, differentiation, competitive advantage, and uniqueness in marketing will be strengthened.
3. Acquire potential customers Acquire potential customers (leads) for the developed products and services. There are various marketing methods such as exhibitions, seminars, telephone sales, and the use of your own website. In BtoB marketing, this is called lead generation. How efficiently can you approach potential customers (leads)? becomes important.
4. Nurturing potential customers Build contact with acquired potential customers (leads) over the medium to long term and build relationships of trust. In BtoB marketing, this is called lead nurturing. We investigate the problems that prospective customers (leads) want to solve (needs survey) and propose solutions (solution proposals). BtoB companies have long purchasing and consideration processes, so the importance and necessity of medium- to long-term lead nurturing is extremely high.
5. Converting into projects/negotiations From among the prospective customers (leads) that have been nurtured, extract and select high-probability prospects (leads) and turn them into projects/negotiations. In BtoB marketing, the process of extracting and selecting highly probable customers (leads) is called lead qualification.
6. Providing estimates, etc. to prospective customers (leads) that have been converted into orders and business negotiations, and actually obtaining orders. At this stage, the prospective customer (lead) becomes a new customer.
7.Customer Retention Retain new customers and turn them into good customers. To increase LTV and maximize profits and sales. We will develop measures to prevent customer loss and maximize sales from existing customers by increasing the number of purchases (acquiring new projects) and increasing the number of items purchased.
8.Customer Satisfaction Survey Surveying existing customers about their level of satisfaction with their products and services (good points and dissatisfied points) and clarifying the issues that their products have.
The steps up to this point are marketing activities based on the BtoB marketing cycle.
Citations/References:
What is BtoB marketing? 8 activities and 20 methods, the latest trends such as how to proceed and digital utilization
The reality of BtoB marketing and key points for success
Tips on how to start and proceed with BtoB marketing
So, what should you keep in mind when actually launching BtoB marketing? Let’s focus on five points.
5 points to keep in mind when starting up BtoB marketing
Point 1: Clarifying the responsibilities and roles of marketing personnel Point 2: Sharing information and data coordination between marketing personnel and other departments Point 3: Collaboration between online and offline Point 4: Ingenuity to reduce man-hours for calculating KPIs Point 5: Content Collaboration and strengthening of systems for manufacturing
Let us introduce the details of each point.
Point 1: Clarification of marketing responsibilities and roles
In the BtoB marketing cycle, it is extremely important to clarify the extent to which marketing personnel will be involved.
In most cases, the roles of departments are fixed in normal business operations, such as development is responsible for creating good products and services, sales is responsible for taking orders, and customer support is responsible for customer retention and satisfaction surveys. . In doing so, it is necessary to define the scope of the responsibilities and roles of the person in charge of marketing, and to clarify “from where to how far?” Furthermore, a major prerequisite for starting activities is to discuss the goals of BtoB marketing activities and to form a consensus throughout the company, including top management.
Point 2: Information sharing and data coordination between marketing staff and other departments This is related to point 1, but when implementing the BtoB marketing cycle, it is also essential that information sharing and data coordination with other related departments is smooth. It is a condition. For example, development requires the coordination of data such as customer needs and competitive information, and sales cannot carry out highly accurate activities unless information such as leads and details of business negotiations is shared. .
Data collaboration also requires analyzing KPIs and sharing information on project objectives and progress management to improve any areas that have not been achieved.
Point 3: Collaboration and utilization of online and offline
In the case of BtoB companies, resources (people, time, budget) tend to be concentrated on development and sales, which are directly linked to profits, and there are many cases where marketing staff has few or limited resources. In such cases, it is important to make use of digital technology and communication to link online and offline activities.
Especially in recent years, digital marketing technology has advanced, so utilizing online and digital technology in BtoB marketing is one solution. For example, by launching and utilizing owned media and SNS, it is possible to streamline marketing operations.
What needs to be noted here is that when utilizing online and digital, when acquiring and nurturing potential customers (leads) online, it is necessary to gradually link them to real (offline) from there. is. Where should we find the key points for collaboration and how should we collaborate? It is also important to make this concrete, including cooperation with other departments.
At first, you can connect all the potential customers (leads) acquired through owned media to sales, but as the number increases, you may find yourself unable to follow up or make appointments, which cannot be handled by sales alone. It becomes impossible to do it. For times like this, it is necessary to build a system that allows for flexible collaboration with other departments depending on the situation.
Point 4: Ideas to reduce the amount of time required to calculate KPIs
When developing a BtoB marketing cycle, it is extremely important to set appropriate KPIs, measure them regularly, and continually improve them. However, if you are too preoccupied with KPIs and have to collate and aggregate data stored in systems across the company in order to calculate them, you will not be able to implement PDCA in a timely manner. Therefore, it would be good to have a system that can calculate KPIs automatically to some extent if possible.
Point 5: Strengthen collaboration and system for content creation
In the BtoB marketing cycle, measures to “acquire and develop potential customers (leads)” are increasingly centered on digital marketing. In this case, marketing activities are carried out using digital content (web content, email content, etc.), and the creation of that digital content is a key point.
4 points for BtoB marketing success
Four keys to BtoB marketing success
Although BtoB marketing sounds like a new term, the essence of its activities is no different from sales activities.
In other words, it all boils down to first understanding why customers use your company’s products and services, and then using marketing techniques to meet their needs.
If you carry out marketing activities without understanding this, you may end up with no sales results and end up being a waste of effort.
It is said that there are four keys to successful BtoB marketing: These are “needs”, “timing”, “loyalty”, and “key people”.
Points to keep in mind in BtoB marketing
1. Prospective Customer Needs Needs refer to why the customer needs the product or service. Alternatively, marketing can reveal latent needs that even customers themselves are not aware of. If there is no need, customers will not consider purchasing your product or service, and you will not be able to receive orders.
2. Even if a need becomes clear to provide at the right time, orders will not be won unless the budget and purchasing environment are established, so it is important to assess the customer’s situation and timing.
3. Increasing loyalty Traditionally, loyalty has been cultivated by sales representatives visiting customers many times to strengthen relationships. However, by introducing BtoB marketing, it is possible to increase loyalty more effectively. If you can enter into a business negotiation with a high level of loyalty, you can proceed smoothly until you receive an order.
4. Keep the key people in check And finally, the most important point in BtoB marketing is the key people.
As mentioned above, in BtoB, there are many people involved in decision-making up to the point of purchase, so if you don’t identify the key people, your sales activities may end up being a waste of effort.
It is also important to note that keyman is not necessarily alone. For example, people who collect information on competitors are key people, and those who specifically promote products and services, and those who have budget rights and make final decisions are, of course. It is important to determine who to provide and what kind of information to provide by holding down these key players at the right time.
BtoB marketing failure example
If you flip the above success points, you will see points to be aware of not falling. A common failure example is:
- I can’t contact the keyman
For example, even if an exhibition is held, only young employees who do not have the authority to purchase products or services can reach the key player if they participate in collecting and studying information. As a long -term strategy, it is different if there is a certain proof that such participants can be developed into prospects, but it is still inefficient considering the operation costs of the exhibition and the resources that have been divided. You should devise a means of providing information that can work directly with the decisive determination.
- I am not able to grasp the industry -specific information collection route
Another common failure example is that the industry -specific information gathering route was not possible. For example, in the IT industry, it is commonplace to collect information using the web, but parts manufacturers in the manufacturing industry include collecting information from real worlds, such as sales staff, industry exhibitions, or industry magazines. It is still mainstream. Standing owned media to develop new customers in these industries cannot be expected to be effective. It is necessary to provide information in each industry. .
Successful marketing cases on BtoB
So far, we have explained Btob Marketing, but what is the success of BtoB marketing in the first place?
What is the definition of success in Btob Marketing activities?
The definition is very difficult, but the following two indicators will be a guide for success.
1. Is it possible to pioneering and nurturing new customers?
First, whether or not to develop new customers is the indicator of success. Acquisition of new customers in marketing is the easiest to understand. Furthermore, urgent development from “new customers” to “customer” also plays a role in marketing. It can be said that it would be a success if you could expand your customers as soon as possible in cooperation with other departments.
2. Did you detect the new needs of existing customers and provide the value corresponding to it?
New customers may be separated before building a trusting relationship, but existing customers are already reliable, so they are unlikely to leave. Therefore, it is also an important indicator to detect the new needs of existing customers and respond to this.
In addition, it is also questionable whether the distance to existing customers has been further reduced by scrutinizing the needs and presenting the value to respond to it.
If the existing customers somehow have the potential and new needs of “I want you to do more,” the marketing is successful if they can brush up their products and services further.
Success examples of Btob Marketing
Here are two examples of companies that succeeded in BtoB marketing.
- Company A case: PV increases dramatically by using owned media
<Metomenous> Company A, which is conducting M & A brokerage through the Internet, has been promoting promotional activities on its own website. However, thorough research in BtoB Marketing revealed that the posted information was not linked to sales and needed improvement.
When explaining the latest M & A -related news, M & A projects, M & A procedures, etc. to owned media, the PV increased dramatically and achieved 1 million PV per month.
<Points of success>
As a result of research and research by BtoB marketing, we maintained various content in owned media.
- Company B case: Expand market share by resetting persona
<Metomy> At Company B, a commercial home appliance manufacturer, the market share of air conditioners for corporate had a peak. Therefore, we make full use of BtoB Marketing to thoroughly redesign a fictional customer Persona image. A fictitious but specific company name and a business owner of the customer company were set as a persona, and a questionnaire was conducted to many companies. By accurately feeding the persona and designed more realistic personas, we succeeded in expanding market share.
<Points of success>
Based on the questionnaire, the personality of the persona was performed thoroughly.
BtoB marketing failure examples
Finally, let me introduce a failure example as a reference to prevent this from BtoB Marketing.
- Company X’s case: Withdrawal but withdrawal brands in the main market
<Metropolitan> Home appliances manufacturer X sells high -end brands using BtoB marketing methods in the market of major products that are being low. Utilizing his name recognition, he carried out sales activities with brand power, but as expected, sales did not increase and the market was withdrawn.
<Failure factor>
Low -cost competition is progressing throughout the market, the market as a whole, and this flow could not be changed just by launching new brands. It can be said that the unable to read the flow of the times caused failure.
summary
- He has introduced the points of successful BtoB marketing and examples, but companies that are basically thoroughly researching the market and marketing activities have been successful. And there are many cases where BtoB marketing has failed, and there are many cases where research is lacking, and the times have not been accurately read. It can be said that research is very important in marketing activities.
- BtoB is an important key not only from the marketing approach, but also from a business strategy. Both begin with understanding why customers use their products and services. It is important to work without removing the basics of this BtoB without sticking to the word marketing or sales.
- So far, we have explained the basics of BTOB and business models surrounding it, but it can be said that the concept of B2B in Japan and marketing are just on the beginning. There is no typical problem in the tasks to be solved or the settings of KPI, and the key to finding a method that fits your company. While understanding the points to success through this article, I would like you to find an approach to BtoB that seems to be in -house.