“Business-to-business” (B2B) describes relationships from a company directed to another company. This includes business relationships between manufacturer, retailer, craftsmen, and service providers. Acquired products are mostly used to produce other products or services and are not ‘consumed’. This differentiates business-to-business from the “business-to-consumer” (B2C), which describes the relationship of a company directed to the end consumer of a product.
Characteristics of the B2B Buying Process
In general terms, the reason for companies to buy something is mostly due to coping with a specific problem. For example, to manage a customer base (solution: CRM software) or to send customized promotional e-mails (solution: newsletter services). Therefore, the buying process is mostly a problem-solving process. Therefore, the demanded product needs to generate an increase in efficiency and effectiveness.
B2B markets are often smaller than B2C markets, but the transactions in B2B markets include a high sales volume and a high implementation time. This results in high risks for the customer, given that if the acquired product does not hold what it promised, a lot of money and a lot of time is wasted. Because of the high risk, the buying process is usually long and involves different people who gather and analyze data around potential products.
The number of involved people depends on the size, the organizational structure and on how new and complex the approached problem is. The group of all involved persons is described as the “buying center”. Due to the complex buying process, trust is very important in business-to-business transactions. Therefore, establishing a relationship between the buyer and the seller is a necessary step.
The B2B Operating Process
The operating process describes the sales funnel out of the company’s perspective. It can be broken down into the marketing, sales, and service-process. These processes themselves are divided into campaign, lead, opportunity, contract, feedback, and support management.
In the campaign management step of the marketing process, the goal is to generate leads. A lead is the expression of interest in the company or the product by a potential- or current customer. Therefore, relevant information and offers regarding the product need to be distributed to prospective customers.
In the lead management, the generated leads will then be qualified and prioritized. This is necessary to ensure, that the following activities are directed to prospective customers with a high potential to convert into actual customers. The prospective customers are called prospects.
Those steps are often conducted by the marketing department. After the qualification of the leads, the marketing department is handing them over to the sales department. The sales representatives will evaluate usable opportunities (opportunity-management). In this step, the organization a prospect belongs to will be analyzed to predict the potential sales volume. Finally, the sales department will then create offers and contracts and prepare the actual sale (contract-management).
In the service-process, complaints, praise and suggestions (feedback) as well as questions, and issues during the usage of the sold product (support) are management.
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