I first saw this view in a Harvard Business Review blog where analyst R ‘Ray’ Wang commented that
The emergence of extremely viral people-to-people (P2P) networks has changed the notion of the customer and employee forever. Social media, social networks, and mobility also herald the death of B2B and B2C as we know them.
This was repeated by a marketer who wrote ‘There Is No More B2B Or B2C: It’s Human To Human, H2H.’
I have not been convinced of this view. There are valid reasons why marketers separate B2B and B2C (as mentioned in the Wikipedia entry).
- Transaction volume and type. A business can have many B2B transactions in its supply chain processes involving different suppliers, materials and components, but only one B2C transaction.
- Buying decision. For an individual there is (usually) one person making the buying decision, whereas in a business there will be many people involved in coming to the buying decision.
- Buying process. A business usually has many criteria to weigh up in determining what to buy, and a lengthy and sometimes complex process before finalising the decision. An individual has fewer criteria and a fairly simple decision process.
- Brand image. People often buy something because of its brand image. Businesses may be influenced by certain industry brands, but other (often technical) issues can have a major influence as well.
- Risk. For a business buying a product (software, machinery), the benefit of the product has to be considered against the risk of going with that product, especially with high-value purchases (e.g., machinery, enterprise software). For an individual, risk is not issue, even for a purchase like a house.
An article by venture capitalist and technology strategist, Geoffrey Moore, writing about an updated edition of one of his seminal books ‘Crossing the Chasm’ points out the difference between B2B and B2C by discussing what makes a successful business product as opposed to a consumer one. There are two different models involved:
- For businesses, the model of the Technology Adoption Life Cycle defines the characteristics and behaviours of different types of business buyers.
- For consumers, Moore identifies a separate model, the Four Gears, a framework upon which to build a consumer-oriented business.
Those are enough reasons why B2B and B2C are different, and cannot be pulled together. Are there any more? If you disagree with my view, what are your arguments?
Update: I can across these two related blogs, which give a different perspective to the B2C vs B2B debate.