Business to business transactions occur when one company sells products or services to the other in order to improve the performance or quality of the other. These transactions take place in all industries in various capacities. Learning about B2B may help you determine whether a career in this business model is right for you. This article defines business to business, its types, sales funnels, and essential skills, as well as popular jobs that require this function.
What Is Business To Business (B2B)?
A simple way to answer the question “What is business to business?” is that it refers to the transactions that occur between two companies. Organisations may develop products or services that benefit other businesses by helping them to perform their functions more efficiently. A B2B transaction often occurs between a manufacturer, wholesaler or retailer. All industries have companies that engage in B2B transactions. These transactions are essential to create and run the supply chain.
For example, the automobile manufacturing industry is one of the largest consumer-facing sectors. Every vehicle these companies manufacture are parts from different companies including, batteries, tyres and electronics. The automobile manufacturer purchases these products from various suppliers and assembles them to manufacture the vehicle. Similarly, a food and beverage wholesaler sources its products from suppliers from different cities and countries to conduct business.
Types Of Business-To-Business
A business-to-business transaction may occur between companies at varying levels. Here are the different types of transactions:
Horizontal B2B
Horizontal B2B is a transaction that occurs in intermediate trading marketing. It allows a company to sell their product or service to multiple companies from different industries. It expands business opportunities. A horizontal B2B occurs when a company buys products or services that improve their workplace and do not necessarily affect a product or service they sell. For example, a paper manufacturing company may sell it to different companies irrespective of their industry.
Vertical B2B
Vertical business-to-business is a transaction pattern that works upstream or downstream of the same industry. Companies sell products within the same industry. A company in a vertical B2B transaction may supply its goods or services to multiple companies within the same industry. For example, a tyre manufacturing company would offer its products to the automobile industry but supply to various companies.
The B2B Sales Funnel
Sales funnel is a marketing term for the journey of a potential buyer before they purchase from a company. Each stage displays varying characteristics of the buyer and helps companies plan their marketing activities and channels to maximise conversions. As a buyer moves from one phase to another, the metaphorical funnel narrows down to include only a few who purchase a product or service from the business. A business-to-business sales channel has five stages:
Awareness
In the awareness stage, the business-to-business customer is looking for a solution to their problem. They look for resources that explain the various possibilities to help address their issues. In this stage, the values of the potential business-to-business customer are low as they are currently only exploring their options. At this stage, a company provides informative content to get the buyer’s attention. If the company successfully impresses the buyer, they move to the next stage.
Interest
In this stage, the business-to-business customer wants to learn more about the product or service. They look for opportunities to test the product and ensure it meets standards. For example, many companies provide product demos to showcase their product features and quality.
Providing a hands-on product experience or more information about how the product may help resolve the buyer’s issues benefits the company.
Decision
A buyer collects product information from several companies before entering the consideration stage. In this stage, a business-to-business customer evaluates and compares the different products available in the market. They understand the pros, cons and costs involved in purchasing the product. A B2B customer also considers the company reputation, product reviews and post-sale benefits offered by various companies.
Action
After deliberation, the B2B customer decides on a company for the purchase. After negotiations, the buyer issues a purchase order and pays to confirm the order. The business-to-business seller then assists the buyer with the onboarding process and thoroughly explains the product to the buyer and their team.
Post-purchase engagement
This stage is crucial to building a long-term relationship with the buyer. The business-to-business seller may provide additional services, cross-sell products and collect feedback. When executed strategically, effective post-purchase engagement may help the seller gain referrals from the buyer to expand their business.
Tips For An Effective B2B Sales Funnel
Different companies and industries may modify sales funnel to suit their requirements. It is essential to analyse the sales funnel periodically and make necessary changes to enhance the customer experience. Following are some tips that may help you build an effective sales funnel to maximise conversions:
- Create a buyer persona to understand the companies or industries the product may benefit
- Design a strategy to track the progress of a buyer and to timely share all necessary information
- Create relevant content for each stage of the sales journey
- Customise the content to offer a personalised solution to buyers
- Ensure a follow up with potential buyers and answer their queries
- Set documentation and marketing material for the sales team to follow
Essential Client-Facing Skills Required In B2B Transactions
Completing a business-to-business transaction requires a strong business relationship between the two companies. The value of B2B transactions is usually high. Here are the top skills to become a successful B2B professional:
Communication skills
A B2B professional engages in verbal, non-verbal and written communication with clients and colleagues. To gain the trust and confidence of a potential buyer, a B2B professional articulates their thoughts and addresses the client’s needs. It may be in a one-on-one conversation or even by email. Clear and consistent communication promotes meaningful interactions that help increase sales and build long-term relationships.
Presentation skills
B2B professionals often engage in product demonstrations and presentations. It is essential to be confident, communicate well and provide the appropriate non-verbal cues to maintain the buyer interest. Strong public speaking and interpersonal skills may help improve presentation skills.
Negotiation skills
Negotiation skills are essential to a B2B professional to ensure effective collaboration without compromising the interest of both companies. A B2B professional formulates useful strategies to maintain business relationships throughout any negotiation process. They may use this skill to discuss payment terms, delivery timelines or establish terms of service.
Problem-solving
B2B professionals address the issues a business may face and provide solutions accordingly. A B2B professional may provide innovative and personalised solutions to the client. Additionally, this skill may also benefit the company to improve its product or service.
Subject expertise
It is essential to have comprehensive knowledge about the product or service. A B2B professional interacts with clients, and their knowledge helps address all client queries. Many organisations conduct training sessions for B2B professionals to ensure they have thorough knowledge about the product or service. Apart from understanding the product or service, it also benefits to learn about the industry.
Relationship management
Many organisations work with fixed suppliers for years together. Building and maintaining strong relationships with clients helps in improving sales. It is essential to conduct surveys to understand client sentiments and take appropriate measures to address them. As a B2B professional, it is crucial to engage with clients to encourage future business deals.
Jobs In B2B
B2B professionals work in various industries. Here are some popular roles:
1. Customer Support Representative
National average salary: ₹2,48,503 per year
Primary duties: Customer support representative answers customer queries through emails, chatbots or calls. They help customers troubleshoot products or answer service-related queries, provide additional information or direct them to the appropriate teams for quick and efficient resolution. Customer support works through pre-sale and post-sales channels in a company.
2. Sales Executive
National average salary: ₹2,53, 805 per year
Primary duties: The primary role of a sales executive is to sell the products or services to prospective clients. A sales executive trains to understand the product and approaches clients. They may interact with a customer through various media, including email, call and face-to-face. They work to meet sales targets to increase revenue for the company.
3. Digital Marketer
National average salary: ₹2,87,955 per year
Primary duties: A digital marketer works in marketing or advertising companies to help businesses build effective digital marketing campaigns. They track the progress of their campaigns and optimise it to maximise results. Many digital marketers write content for social media, paid online advertising, emails and may also work to improve search engine optimisation (SEO).
4. Supply Chain Manager
National average salary: ₹4,20,942 per year
Primary duties: A B2B supply chain manager tracks and ensures timely delivery of goods to and from clients, manages inventory and warehouse operations. They often work using logistical software to track the product from creation to delivery. Supply chain managers work in factories in manufacturing, construction and retail.
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