In today’s fast-paced business environment, companies of all sizes need to rely on each other to succeed. Whether you’re the CEO of a small startup or a multinational corporation, you’re likely to require goods and services from other businesses to operate and grow. That’s where the business-to-business (B2B) model comes in.
B2B companies specialise in producing and selling products or services to other businesses instead of consumers. From software as a service (SaaS) to marketing agencies and industrial manufacturers, it plays a crucial role in the global economy. Today we’ll explore the fundamentals of B2B and the different types of models, as well as explain what is B2B marketing is and why it is essential for your business.
What is Business-to-Business (B2B)?
B2B is a business model where companies produce goods and services for other companies and organisations. In other words, B2B businesses sell their products or services to other businesses, rather than directly to consumers.
Types of B2B models
There are three main types of B2B models: product-based, service-based, and software-based. Let’s take a closer look at each of them:
1. Product-based model
In a product-based B2B model, companies sell physical products to other businesses. This can include raw materials, components, finished goods, and anything else that one business might need to purchase from another business to produce its own goods or services.
2. Service-based model
In a service-based B2B model, companies sell services to other businesses. This can include anything from consulting services to marketing services, logistics services, and more.
3. Software-based model
In a software-based B2B model, companies sell software products or services to other businesses. There are two main types of software-based B2B models: product-focused and service-focused.
“Product-focused” software-based B2B model
In a product-focused, software-based B2B model, companies sell software products to other businesses. This can include anything from productivity software to project management software, customer relationship management (CRM) software, and more.
“Service-focused” software-based B2B model (SAAS model)
Businesses provide software services in a service-focused, software-based B2B model. The Software as a Service (SaaS) model sells cloud-hosted software applications rather than the program itself. Email marketing, project management, CRM, and more are examples.
E-commerce has revolutionised B2B sales and purchases. Frost & Sullivan predicts $20.9 trillion in B2B e-commerce by 2027. However, the method depends on who leads the deal. Here are three common models:
1. Supplier-Centric model
In this model, the supplier leads the e-commerce transaction, pushing the customer to follow its methods and systems. Buyers may explore, order, and monitor shipments on the supplier’s online site. This model streamlines sales and cuts expenses for providers with a vast client base and a wide product variety.
2. Buyer-Centric model
The buyer-centric model puts the buyer in charge of e-commerce transactions. The buyer builds an online marketplace or platform where suppliers may promote their items. This model empowers purchasers to negotiate better pricing and terms. Building and maintaining the platform demands major technical and resource investments.
3. Intermediary-Centric model
Finally, the intermediary-centric model links buyers and suppliers through a third-party platform or marketplace. The middleman facilitates secure, efficient transactions. Companies that wish to reach new markets without investing in e-commerce infrastructure could use this model. Intermediaries may impose fees or commissions, increasing transaction costs.
Advantages of the B2B Model
With a B2B model, your customers are other companies. Compared to selling to individual consumers, this means that demand for your goods or services is more likely to be consistent and predictable. Because of this consistency, you’ll be able to make more informed choices about your company’s future.
Here are some advantages of the B2B model that make it a preferred choice for many businesses:
- A predictable and stable market
This means your product or service demand is more constant and predictable than if you sold it to individual consumers. Stability may help you plan and anticipate income, improving company decisions.
- Better customer loyalty
Dealing with other businesses helps you establish better, longer-lasting client connections. Businesses persist with trusted suppliers, unlike individual customers, who can swap brands at any moment. Loyalty can lead to repeat business and word-of-mouth referrals.
- A trillion-dollar industry
Experts estimate its global value at several trillion dollars. This suggests a vast customer base and lots of growth potential. Strategically approaching the B2B model might be advantageous for your firm.
Disadvantages of the B2B model
While the B2B model has several advantages, it also has its share of drawbacks. Here are some of the key disadvantages of the B2B model:
- Smaller customer pool
B2B businesses, at most, only serve other businesses, limiting their consumer base. To reach their target demographic, these organisations must be more strategic in their marketing and sales.
- Marketing challenges
These business models must also deal with the complexities of the sales process. Sales cycles are longer and harder when there are several decision-makers. The sales process is also harder because the items and services are more expensive.
What are some common B2B examples?
B2B companies come in many different shapes and sizes, but some common examples include:
- B2B wholesalers
These companies sell a wide array of commercial products to other businesses. They typically buy products in bulk from manufacturers and sell them to retailers, who then sell them to consumers.
- B2B suppliers
They may provide raw materials or components that are used in the production of other products, or they may provide services like transportation or logistics. An example of these are logging companies that sell wood to furniture manufacturers.
- B2B service providers
B2B service providers are companies that provide services to other businesses. This could include accounting services, legal services, consulting services, or B2B marketing services, among others.
“Finding your audience is the first step in B2B lead creation. Understand your ideal customer’s industry, organisation size, job title, and pain areas. After knowing your target customer, you can adjust your messaging and sales strategy to their pain points and demands.”
Tips for making successful B2B sales
One effective way to improve your B2B sales strategy is to study successful B2B marketing examples. By analysing what other companies have done well, you can gain insight into what strategies may work for your own business. Some effective marketing strategies you can do include:
1. Find your audience
A crucial step in B2B sales is identifying your target audience. You need to know who your potential customers are, their pain points, and what they are looking for. Once you have identified your target audience, you can tailor your sales approach to their specific needs and interests.
Finding your audience is the first step in B2B lead creation. Understand your ideal customer’s industry, organisation size, job title, and pain areas. After knowing your target customer, you can adjust your messaging and sales strategy to their pain points and demands.
2. Produce relevant content
B2B content marketing plays a significant role in attracting and engaging potential customers. Your content should focus on solving your target audience’s problems, answering their questions, and educating them about your product or service. By producing relevant content, you establish yourself as an authority in your field and build trust with your audience.
Your content should also be engaging and visually appealing. Use images, videos, and infographics to break up the text and make it more engaging. You should also ensure that your content is optimised for search engines by using relevant keywords and meta descriptions.
3. Deliver quality and value
Providing high-quality products or services is not enough in the highly competitive B2B market. You must go beyond meeting the expectations of your customers by providing real value. This means understanding the unique needs and pain points of your target audience and creating tailored solutions that solve their problems effectively.
When it comes to B2B sales, quality and value are crucial. You need to offer products or services that are high-quality and provide real value to your customers. Your offerings should solve their problems and meet their needs effectively.
4. Use social media
Marketing to B2B will require a good social media presence. Social media is an excellent tool for B2B sales, as it allows you to connect with potential customers and build relationships with them. You can use social media platforms such as LinkedIn, Twitter, and Facebook to engage with your audience, share content, and promote your products or services.
Want good B2B marketing tips? Use social media effectively and strategically. Social media can be a powerful tool for reaching potential customers and building relationships. You can use social media platforms such as LinkedIn, Twitter, and Facebook to share relevant content, engage with your audience, and build your brand.
Optimising your sales process is essential for successful B2B sales. You need to continually monitor and refine your sales approach, including your sales pitch, follow-up process, and closing techniques. This will help you improve your sales performance and drive more revenue.
B2B Companies Examples
Here are some examples of successful B2B companies:
Asana is a software company that provides a collaborative work management platform for teams. Their platform enables teams to track their work, manage projects, and collaborate in real-time.
Asana is a good example of a B2B SaaS company that excels at marketing its software. Their B2B SaaS marketing strategy is centred around providing value to their audience through informative content, social media engagement, and a focus on the user experience.
Microsoft is a multinational technology company that develops and sells software, hardware, and services. Their products and services are used by businesses of all sizes to improve productivity, enhance communication, and drive growth.
In terms of B2B tech marketing, Microsoft is a good example of a company that understands the importance of catering to the needs of its customers. They offer a variety of products and services that are specifically designed to help businesses increase their productivity and efficiency.
Zendesk is a customer service software company that provides a platform for customer support, sales, and engagement. Their software allows businesses to build better customer relationships by providing support across multiple channels.
Their B2B software marketing emphasises customer service and how their platform can help businesses accomplish it. Webinars, manuals, and case studies help firms understand customer service and how to use their platform.
IBM is a multinational technology company that provides hardware, software, and services for businesses. Their products and services include artificial intelligence, blockchain technology, cloud computing, and more.
In the next section, we’ll discuss what is B2B marketing and why it is important for the B2B model.
What is B2B marketing?
B2B involves complicated decision-making processes with more stakeholders, longer sales cycles, and a greater need for customization. B2B marketing is also important for B2B lead generation and expanding your customer base.
Using specialised channels like trade exhibitions, events, and networking events, B2B marketing focuses on establishing long-lasting connections and trust with other businesses. Mass media platforms, including radio, television, and social media are widely used both in B2C and B2B marketing. While both fields share certain parallels, B2B marketing has its own distinctive characteristics that must be understood in order to succeed in this competitive industry.
B2B marketing is important because it connects you with your target audience through a small customer base. Finding the right clients can be daunting, but there are services that can help you connect with the right people.
Identify and connect with your potential customers in a B2B market with The Ortus Club
The Ortus Club is a platform that connects executives from different industries to share insights and network. We provide a range of services to help companies identify and connect with potential customers in the B2B market. By working with us, your company can gain valuable insights into its target audience and build meaningful relationships with potential customers.
We specialise in creating and delivering high-quality events that bring together executives and decision-makers from a wide range of industries. We host virtual or in-person events, such as roundtable discussions and masterclasses, that foster important interactions and collaborations.
By working with The Ortus Club for your B2B marketing needs, you will have access to our vast network of business decision-makers and industry experts, receive insightful knowledge of your target market, and establish your brand as a valued and dependable resource. To find out more about how we can help you connect with new business clients, get in touch with us right now.