The New Paradigm – B2B and B2C learning from each other

I’ve read a number of articles lately where the author has been proposing that the distinctions between companies having a commercial focus on B2B (Business-to-Business) or a focus on B2C (Business to Consumer) are blurring.

While in general I believe this to be true, I see it as more of a shift in paradigm in how companies engage with their customers and scale their business. I believe its occurring because customer requirements for engagement are changing. I also think that the blurring occurs differently in the various layers of the engagement, such as marketing, sales, procurement and customer service. Rather than a blending of styles, I believe that the traditional forms of business are learning from each other. I will expand on these ideas in future related posts.

First a note of what I consider the broad definitions of B2B and B2C, as well as how I see these changing.

B2B companies sell a product or service to another business. This can either be a something the company uses to enable its internal business processes; or it can be something a company uses to support its own B2C or B2B offering. Traditionally B2B companies sell to specialized market segments, provide a highly customizable professional offering. Customer teams include experts that evaluate and demand quality in the product. Companies build an ongoing engagement with the customer, focusing on opportunities to resell and upsell. Sales cycles can be long and involve specific requirements to engage with the customer’s procurement processes.

On the other hand B2C companies sell products and services that are for personal use to a large number of individuals, the general public at large. The buying decision can sometimes be spontaneous or emotional. Marketing efforts focus on brand awareness and loyalty. The product or service is generally not customizable (unless a niche market). Support services tend to be very lean and at a low or no cost.

Under the new paradigm, we are seeing some of these basic assumptions change.

The distinction between business user and consumer itself is blending. For example, with the advent of smart phones and tablets as well as the practice of BYOD, products and services now exist where the consumer decides whether it’s used for business or personal use, and floats between the two.

Consumers have become smarter. The proliferation and availability of expert information has become widespread. Consumers are demanding expert information on products. If a company doesn’t provide it, they will get it somewhere else. If a B2C company wants to control what this information is, they need to provide forums or channels to distribute it. A great example of this is McDonald’s Our Food Your Questions site.

SaaS and Clouds have turned business services into consumables. Businesses providing these services have an opportunity and need to scale their offerings. They can truly provide their services to any business, anywhere, at any time and on any device. A perfect example of this is Salesforce.com. They need to learn how to do this efficiently with professional grade quality while controlling costs.

Please provide comments if you agree with these ideas and how you see it impacting your business.