Customers are the heartbeat of any business. It’s critical to manage that relationship if you want to see long-term success. However, that doesn’t mean all CRM software is a good option. Why? Because B2B CRM software and B2C CRM software aren’t created equal.
As a CRM buyer, you need to distinguish between the capabilities of the two. They’re very different and do different things for an enterprise.
Selling to a company of people over a lengthy, complex sales cycle is vastly different than selling to an individual in the fast-paced consumer world. As such, the tools that power a B2B solution won’t be identical to those aimed at B2C companies.
However, in practice, many systems will offer the functionality of both B2C and B2B customer relationship management. Especially those on an enterprise scale that come with all the bells and whistles.
Confusing, I know. That’s why we’re dedicated to helping make the software selection process easier for you.
In this article, we’ll explore the differences between B2B vs B2C CRM. We’ll also go over some examples of capabilities you’re more likely to find — or need — in each.
What Do B2B, B2C and CRM Mean?
Before we jump in, let’s quickly talk about what some of these terms mean.
- B2B: Business-to-Business describes companies that sell products and services to other companies. Marketing agencies, vendors that sell HR software and manufacturers are examples of B2B organizations.
- B2C: Business-to-Consumer describes companies that sell straight to end customers. This includes hotels, retailers, banks, car dealerships and airlines.
- Customer relationship management: The actions and strategies companies use to manage their interactions with customers. The term can be misleading since this actually starts at the prospect stage before people convert to paying customers.
- CRM: This term can refer to the definition listed above, but more often, it refers to the actual software used to accomplish those goals.
B2B vs B2C CRM: What Are the Differences?
Now let’s see how CRM systems are different based on the end audience. On the surface, they may look pretty similar. After all, marketing and selling — and the tools to accomplish them — are the same, no matter who the target customer is. Right?
Not so fast.
Mark Twain once said, “The difference between the almost right word and the right word is really a large matter — ’tis the difference between the lightning-bug and the lightning.”
The same goes for CRM software. “Almost right” for your company won’t cut it. You need a system that fits your company’s unique needs based on your selling environment.
B2B and B2C solutions will have overlapping features and capabilities, but their differences are great enough that you need to distinguish between the two types. That’s why it’s valuable to thoroughly research the products on the market and build your list of CRM requirements ahead of time so you can more easily weed out the products built for a different sales process.
To help you understand the distinction between B2B CRM and B2C CRM, we put together a short list of the major differences:
B2B systems require more complexity because the B2B sales process is much more involved.
First, there’s channel complexity. A B2B company often works with vendor partners, resellers or affiliate companies, selling to other businesses through multiple channels.
B2B CRM systems need to account for these diverse pipelines that target various products across a range of channels and markets. Pipeliner CRM, for example, lets users create multiple pipelines that make it possible to track different buyer journeys. This is helpful if you need to separate your sales process into segments based on things like outbound versus inbound sales, partnerships and other situations unique to your business.
However, a much more important and distinctive feature of B2B CRM software is a process that focuses on developing individual contacts within the larger company.
Because B2B buying isn’t based on a single person’s needs, it’s not as simple as someone deciding they want ribs and heading to Outback Steakhouse. The process is more like trying to pick a restaurant during a family reunion.
Gartner research suggests that B2B buying groups are anywhere from six to 10 people. On top of that, they each gather information from several sources that need to be merged into a unified plan before a decision happens.
Many of the best B2B CRM tools have specific functions related to identifying “gatekeepers” or influential people within a business. Customized fields track the progress of a deal based on whom your salespeople are talking to. Getting through to the right person or people is paramount in B2B sales, and B2B CRM software reflects that.
B2C selling, by contrast, is straightforward. Think about the last time you bought a pair of shoes or went out for dinner. You maybe looked at some reviews and checked prices, but it wasn’t an extensive process.
Because the demand of customer-facing sales is much less complex, B2C CRM software doesn’t require the same level of functionality in terms of managing channel complexity. But B2C businesses face their own challenges and need a CRM that has its own range of tools aimed at getting the individual customer to make a choice.
2. Sales Cycle Length
The B2B sales cycle is more like a marathon, while B2C decisions are similar to the 100-yard dash. The length of a sales cycle in the B2B world varies and depends on a number of factors, but it can last anywhere from a few months to upwards of a year.
B2C purchases can happen in as little as a few minutes. If you include the various marketing messages people are exposed to before they buy, that pushes it out to days, weeks or months in some cases. That’s still significantly shorter and requires software with features that cater to the shorter time period.
3. Deal Sizes and Number of Leads
B2B purchases will almost always cost more. Sometimes significantly more. B2C products and services cost far less, apart from some exceptions like down payments for a house or car. That impacts how a CRM is designed.
In the consumer world, B2C companies focus on repeat purchases since they don’t get nearly the ROI from a single purchase as B2B companies do. This creates a need for deep data analysis. These insights can show B2C businesses how customers interact during each purchase, revealing trends and showing where users can cross-sell and upsell products.
On the flip side, B2C generates significantly more leads than B2B does, which translates to a much higher number of customers. This means that the database in a B2C CRM needs to support a greater volume of leads and have deep functionality for handling data for thousands or millions of individuals.
Along those lines, B2C CRM systems also need more robust tools to handle marketing and customer retention in massive quantities. Another main difference is that B2C solutions include contact management elements to help sales and marketing teams keep track of everyone in the system. Software for B2B efforts more often turns to tools for account management.
4. Marketing Touchpoints
In today’s information-soaked environment, the traditional, esteemed marketing funnel is a bit of a misnomer. The decision process is complex and more often mirrors the wandering journey Sam and Frodo had to Mordor than a neatly linear path.
That aside, for our purposes, the how — marketing funnel vs flywheel vs consumer decision journey — isn’t as important as the what. Namely, the different ways your company interacts with prospects, leads and customers.
This goes back to complexity. If a company is going to drop $150,000 on a new ERP system, they’ll need more convincing than a college student buying a refurbished MacBook Air. Therefore, the tools used to handle and track these touchpoints are different based on your audience.
B2B CRM Examples
Suppose an organization sells BI tools to other businesses. It’s CRM will likely have features for building profiles of the companies in its target audience and picking out key individuals in those companies. Sales reps and managers can follow the progression with company representatives through every stage to nurture each lead and take advantage of upsell and cross-sell opportunities.
If you’re on the search for a CRM for B2B, here are a few specific capabilities you should be on the lookout for:
- Automation: Because leads are more valuable, losing even one or two can deal a major blow. Automated workflows help sales reps manage their workloads to keep track of contact information so nothing important slips through the cracks.
- Forecasting: Sales cycles are more predictable in B2B, making it easier to forecast growth based on historical performance. The goal is to accurately predict customer behavior and project financial outcomes.
- Enhanced tracking: B2B sales processes cover more stages than B2C. To that end, B2B CRM solutions provide greater visibility into exactly what stage a prospect or lead is at.
- CPQ applications: These modules or integrations allow B2B companies (and some B2C businesses) more effectively sell complex, highly configurable products, such as industrial equipment. They’re especially useful for organizations in a supply chain.
- Quote management: Generating quotes is an essential part of the B2B sales process. Before a sale is finalized, the customer will want a breakdown of what their money is buying. Quote management software allows users to create a document that lays out the details and can help prevent order mistakes for complex purchases.
B2C CRM Examples
CRMs for B2C focus on audience targeting for quick and easy sales at a massive scale. An online retailer, for example, would need the ability to collect and aggregate behavior data documenting each customer’s preferences and past history with the company across thousands or millions of customers. It would also need dashboards that show how groups of customers react to campaigns based on behavioral analytics.
Another feature is performance metrics for specific marketing campaigns. These tools provide numbers on specific transactions so you know whether groups of customers are individually responding to a campaign or not.
B2C CRMs also often show the data collected through customer loyalty programs. This pulls insights from individuals with custom emails, direct mailings, the use of a store loyalty card or other personalized marketing techniques. Furthermore, the types of loyalty programs built into B2C engines are fundamentally different and geared toward making lots of smaller deals every day.
Above all, a B2C CRM should be able to target mass groups and individuals. It may have all sorts of demographic or mass-marketing designs, but it should still cater to each individual person you’re trying to sell to.
B2C CRM solutions help companies create personal, relatable interactions. They may even put a face to the name, storing an image of a customer to help salespeople know who they’re dealing with.
The below capabilities may appear in B2B CRMs, but they’re more important for software used for selling directly to consumers:
- Real-Time Functionality: One of the hallmarks of the B2C environment is its fast pace. Decisions happen in months, days or even minutes. Because of this quick turnaround time — whether selling to customers or handling a service issue — B2C CRM systems need real-time capabilities. This can include up-to-date data, customer service notifications and more.
- Robust email marketing: Communicating with a handful of leads and customers is hard enough. Add several zeroes to that number and you can see why B2C CRM needs a strong email tool. The features help companies send out blasts to large lists while maintaining a personal touch, and automated workflows support marketing to a massive database of contacts.
- Call center support: Large teams are more likely found in B2C companies, so the supporting CRM needs to integrate with a call center tool.
- Social media integration: Monitoring social engagement is key, as it allows you to offer incentives to disengaged customers and promote other buying choices for engaged customers. You can also track the customer journey and how individuals interact with your brand.
- Automation: Like a B2B CRM, B2C systems also need automation. The purpose here, however, is to help marketing, sales and service teams manage the significant volume of contacts and keep up with the demand.
- Customer service: Customer service capabilities are a universal need, but the demand is greater in B2C systems. The software needs to handle more requests and integrate with a ticketing platform and support chat tools that can manage the higher volume.
Don’t take the above features as the golden standard for B2C and nothing else. B2B companies still need email marketing, call center support and so on. However, the emphasis is different and the way the software helps users execute tasks may vary as well.
Whether you’re practicing B2B or B2C customer relationship management, you need a solution that will play a critical role in growing your business. However, CRM vendors may not always draw a clear line that tells you if their product is better suited for B2B or B2C. You need to understand how the systems differ and whether a particular solution will fill your specific requirements.
To help you get a clearer understanding of the market, we put together a free CRM comparison report. You’ll be able to sort through vendors and get key info like pricing and reviews, along with requirements criteria that ensure you don’t end up looking at software designed for the wrong type of processes.
Did we miss any B2B vs B2C CRM differences? Let us know in the comments!