B2B (Business to Business) – What Is It?

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B2B stands for business-to-business and refers to sales and business between companies. It is one of the most common forms of sales. But even though B2B deals are common, the sales process tends to be complex and requires some specific knowledge. To make it easier to understand the big picture of trade between companies, we have put together a short introduction that explains what B2B is and what is generally typical for this form of sales from other forms.

What does B2B mean?

B2B, or business-to-business, in short, means that companies do business with other companies. For example, companies that sell products to retailers and distributors or businesses that offer services to other companies.

Since B2B is a concept that includes all types of business-to-business businesses, there are many different variants and processes. It simply depends on the industry in which the companies operate, the type of companies that do business with each other, and what service or product is offered.

What makes B2B different from B2C?

When talking about what B2B means, it is not uncommon for B2C to come up. As mentioned earlier, B2B stands for business-to-business, while B2C stands for business-to-consumer. What distinguishes the two concepts is primarily which customer group you sell to.

It is common for business-to-business transactions to follow a more complex process compared to business-to-consumer. In general, B2C often targets a larger amount of potential customers. Since this type of sale is aimed directly at consumers, the order value is usually smaller and the deals are faster. Sales in B2B, on the other hand, are often aimed at fewer customers but with a greater order value.

What is specific to B2B?

To better understand what B2B is, let’s take a closer look at some examples that are generally specific to business-to-business trade.

Business in B2B often has specific conditions

Careful calculations are often required for companies to ensure that they are doing a good and profitable business. Factors such as budget, technical requirements, market conditions, and legal aspects come into play when companies are to decide on new investments and business. In addition to this, the decisions may also need to be considered by several decision-makers in the long run.

To find a solution that works with all specific conditions, sales in B2B business can often last for a long time and follow a complex process with a lot of negotiations between the business partners involved.

Long-term relationships in B2B are common

In business-to-business it is common for companies to strive to build long-term relationships because it can open a multitude of opportunities.

Since B2B business is often complex, the parties have a good understanding of each other’s operations, challenges, and needs. With this understanding, companies can propose customized products, services, or solutions with the potential to become a well-integrated part of the business. This in turn can, for example, contribute to higher CLV (customer lifetime value), as it increases the likelihood of long-term and recurring business.

Another reason is the opportunity to create a wide network of trustworthy partners who can recommend each other to new customers. In this way, not only does the deal itself create value, but the relationship itself can contribute to both parties bringing in potential customers.

B2B agreements often benefit both parties

Companies are in many cases dependent on each other to run their businesses. Let’s say a company makes a product that consists of parts they cannot produce. In such situations, the company often negotiates a favorable exchange with a supplier.

For example, it could be a company that sells computers. To assemble the computers, the company is dependent on a supplier who manufactures the necessary components. The company can then negotiate a good price for the components, in exchange for agreeing on recurring orders with the supplier. In this way, the supplier can in turn secure a stable and regular customer who buys their products.

In the long run, this can increase the efficiency and profitability of both companies, which is one of the reasons why mutually beneficial agreements are often drawn up.

How to become a good B2B salesperson?

To become a good B2B seller, you need to have a good strategy that is adapted to the market and a good understanding of the product you are selling. You also need to have expertise in how to handle complex B2B sales from start to finish and an ability to build long-term relationships.

1.   Gain a solid understanding of the market

A profitable B2B sale is the result of a well-thought-out process that requires a great understanding of how organizations in your industry are structured. With a solid understanding as a foundation, it is easier to develop a strategy that is in line with the market you operate in.

2.   Learn EVERYTHING about your product

To offer organizations complex solutions, you need to have a good understanding of what you are selling and how it can help your potential customer.

By learning everything you can about your product or service, it’s easier to paint a clear picture for potential customers of how your product could meet their needs.

3.   Make sure you have the right skills to handle B2B business

One of the most important parts when it comes to working with B2B is to keep up to date and make sure you have the right skills to handle the entire sales process. Given that decisions are made at several levels within the organization, you benefit from having a broad set of tools to be able to drive the business forward regardless of how the process looks.

If you feel that there is a step in the process that feels difficult, consider whether it might be worth developing your skills. For example, it may be a feeling that set goals feel difficult to reach or steps where you do not feel that you have the motivation you want. In such cases, it can help to develop your skills to navigate difficult situations and find new inspiring methods that will help you close more deals.

4.   Always build trust and confidence when selling

Trust and confidence are the keys to a successful B2B business. Therefore, it is important to establish good relationships that last in the long run. B2B is not just about selling and closing a deal. t is about actively maintaining and building long-term and flexible relationships to be able to handle changes over time.

For those of you who sell, it is in many cases required that the business partners get to know your customer properly. It can mean an in-depth understanding of the customer’s business, business model, needs, and wishes. In addition to a good understanding, it is also important to find a balance in how you treat the customer in the sales process. A study from 2020 shows that trust in a salesperson comes from, among other things, social characteristics and an ability not to be too opinionated.

Once a relationship has been established, it is also important to continue working on it and have regular dialogue about new needs or conditions that may arise over time. This means, for example, that you make sure to always provide good customer service and regularly follow up to see that your solution works as the customer wants.

Please read our post with tips on how to become a good seller for more inspiration!

Learn more about practical skills for a successful B2B business

Business-to-business can be theorized and read about endlessly. But, for you to succeed with this type of sale, you need to put the theory into practice. We at Salesonomics have extensive experience in how you can apply methods for successful B2B sales in practice. Read more about our Sales Acceleration Program here.

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Simon Blanche