B2B and B2C are two separate forms of marketing models whose ultimate goal is to make sales. B2B and B2C marketing campaigns typically share the same set of processes but several major differences separate the two. While B2B is an acronym for business-to-business and as the name implies is a model for selling goods and services to other businesses. B2C, on the other hand, stands for business-to-customer; this entails a business selling its products and services directly to the consumer.
B2B transactions usually take place through the relationship between Supplier and Manufacturer, Manufacturer-Wholesaler or Wholesaler-Retailer. In B2B, there is more emphasis placed on the development of strong, lasting relationships between the two involved businesses to ensure repeat business.
B2C focuses more on the product or service than on the relationship between the consumer and the business as the target market is much larger with millions of prospective consumers available. The relationship between the consumer and the business is usually short-lived.
To yield positive results both B2B and B2C campaigns need to be targeted at the decision-maker but this is not particularly easy for B2B businesses to pull off. A B2C campaign can reach any potential consumer who might be interested in purchasing their product. At times, this person may not end up being the actual buyer. If a woman sees a dinner dress she likes on a website, she might forward the link to her significant other who then goes on to make the purchase. B2C does not always have to appeal to the actual decision-maker to get results.
In the case of B2B businesses, the marketing campaign must appeal to the decision-maker(s) – usually a specific person or a group of persons in the business. An organization’s hundred employees may want new computers but the actual decision to purchase these new computers lies with the Manager or some other top-level employees. These specific people are the ones who need to see your ad.
B2B customers are more likely to conduct more research into your products or services, check more about your brand before purchasing. They will want to consider the benefits, read reviews, and check out products from competitors. After all, they are purchasing for their business and must be meticulous about it. B2C consumers are less likely to take as much time researching the product. They are only concerned with reviews and social proof.
Consequently, B2C customers may purchase your product immediately after seeing an advert while B2B customers will take their time. This is because people are more likely to make spur-of-the-moment decisions when it comes to personal purchases than with business ones.
Relevant metrics for measuring B2B performance.
B2B marketing teams face unique challenges when it comes to tracking metrics. Business-to-business sales are vastly different from direct sales to the customer. The stakes are much higher in B2B sales and it takes some effort to ensure that deals are closed. Your marketing team should consistently track and take action to improve metrics for better productivity.
Let’s review some relevant metrics a B2B Company should be tracking.
Sales Key Performance Indicators (KPIs):
It is important to know how your marketing efforts directly impact your organization’s performance. Tracking sales KPIs is a good way to go about this. Keep an eye on Total sales (often calculated monthly), Sales for each product, and Net Profit margin to mention but a few.
You need to measure how productive your marketing team is when it comes to reaching revenue targets. The faster they can reach their sales targets, the greater the sales for your business. Understanding these metrics can help you make your sales processes more efficient. Productivity metrics include; Percentage of time spent engaging prospects, time spent demonstrating products, time spent on data entry, and percentage of closed deals.
Sales Pipeline Speed:
This measures how much time it takes for prospective customers to move through the entire sales process. The longer it takes from the first contact to sale, the more likely you are to lose customers along the way. To calculate the sales pipeline speed use this equation:
Pipeline Speed = (no of Prospects x Deal Value x Win Rate) / Length of Sales Process.
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A CRM can help you track all these metrics in real-time and in one place but the work doesn’t stop there. You must be able to implement changes based on the data gathered to drive sales for your B2B Company.
Important Marketing Metrics for B2C Companies.
While B2B and B2C marketing have similar objectives, their audiences differ greatly. Both groups face different challenges and have to use different tactics. What this means is that the metrics B2C Companies use to review their marketing campaign performance are different from the B2B metrics.
Here are some important B2C marketing metrics that you should prioritize:
Social Media Engagement:
Social engagement indicators such as the number of followers, Facebook likes and comments, shares on Instagram and Twitter retweets play a vital role in shaping the customer’s perception of your business and influencing their decision to buy.
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A recent Deloitte digital media consumption survey shows that friends and family are the most significant influences on customer buying decisions and that most of these friends and family recommend products and services to their loved ones via social media. This implies that your business should be ready to monitor and interact with customers via social media platforms.
A conversion means making a sale; turning a visitor into a customer. Any growth-oriented B2C must keep constant tabs on its conversion rate. This KPI is calculated by dividing the number of sales by the number of visitors to your website. Let’s say you have 1000 visitors to your landing page, and 90 of those visitors go on to make a purchase, your conversion rate is 90/1000. 9%.
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Another important metric to keep an eye on is revenue. You must be able to tie your marketing efforts to revenue. Revenue is the ultimate metric for rating success. It is advisable to track revenue year over year. This way you can quickly put a finger on the problem when sales are low and implement necessary changes.
Unlike B2B companies who often enjoy long contracts, B2Cs have a shorter relationship with customers. They have to actively cultivate these relationships to retain customers. This is where the Net Promoter Score (NPS) becomes important. The NPS measures how willing a customer is to recommend your product or service to another person. It is usually measured on a scale of 1 to 10.
Measuring how much impact your marketing efforts have on your business is essential to understanding your marketing effectiveness. However, the metrics listed for both B2B and B2c businesses are never one-size-fits-all. Each business is unique and you will have to find out which KPIs help you measure progress for your specific goals.
Why you need to use Marketing Metrics
89% of leading marketers use strategic metrics, like gross revenue, market share, or CLV, to measure the effectiveness of their campaigns. The first step towards improvement is measurement. To understand something, you need to measure it. If you can’t understand it, you can’t control it. And without control, there is no improvement. When done correctly, measuring marketing metrics paves the way for a high return on investment.
Marketers waste an estimated 26% of their budget annually because they have no idea what is effective. Making use of metrics helps you understand how, where, and when to put your money to good use. The numbers never lie. They bring clarity to what works and what doesn’t.
Sooner or later, B2B and B2C business owners will face the glaring reality that pinpointing the right KPI and taking out time to measure marketing metrics is never enough. It is easy to fall into the trap of measuring too many metrics or too few of them. You must be able to find the right balance that provides enough data for you to make smart decisions without overwhelming you and your team. It should be noted also, that the importance of any given metric depends on the individual business and it is essential to measure the ones that matter most to your business.