CRM in B2B and B2C Context

Companies that do not have repeat business from customers will not gain much from CRM. Then who benefits? The more the channels to access customers and more the number of touch points with customers, greater is the need for CRM installation. Compa­nies benefiting from implementing CRM lie in the domains of banking, finance, insurance, airlines and hotels, telecommunications and health care.

A whole discipline of Business-to-Business (B2B) customer relationship management exists that is somewhat different from traditional consumer relationship management, Business-to-Consumer (B2C) CRM. The truth is that B2B CRM is probably older and more established than the consumer or B2C CRM, primarily because even before computers made it possible, sales representatives would keep records of individual contacts, because it was worth it to do so. There are seven basic differences between CRM in the B2C world and CRM in the B2B world.

First, in the B2B world, there are relationships within relationships. This is what is referred to when the contact is the actual person. There is a four-step methodology for building and managing relationships: identify customers; differentiate customers; interact with custom­ers; and customize for customers. This is the “IDIC” model. In the B2B space, the “identify” task concerns itself a great deal with identifying the actual people within the business that have responsibilities for the decision. Those people might be decision makers themselves or they could be reviewers or approvers or influencers.

The second difference between relationship management within the B2C space and within in the B2B space is that in B2B you have just a few large customers, big organizations. This means that the statistical tools that are useful in B2C CRM are largely not relevant in B2B CRM.

The third difference is account development selling. Since organizations are complex, it is much more beneficial to think of a B2B company becoming a customer gradually. Efforts must be put in to develop the account and to make more contacts within the business- to-business organization.

The fourth difference is channel complexity. In the B2B world, the channel distribution process can be extremely complex.

The fifth difference is knowledge-based selling. Since the products and services sold in a B2B context are often highly complex, it is advantageous to base the sales process on educating and training the customers, much more so in B2B than in B2C CRM.

The sixth difference is infrequent purchases. In the B2B CRM world, purchases are likely to be more infrequent and farther between. This characterizes a lot of business to business operations. In many B2B companies, a large amount of effort is allocated in the CRM space to create a continuous service stream that surrounds the occasional sale of products, so that there are opportunities to maintain relationships with customers.

The final difference is that in the B2B space, it makes a great deal of sense to help clients manage themselves. If you’re selling to a business, one of the principal issues that any busi­ness is always wrestling with is, “How do I better manage my business?” If the customer relationship initiatives can be fashioned in such a manner that it enables the business to manage itself, it will lead to high value.

Source: Poornima M. Charantimath (2017), Total Quality Management, Pearson; 3rd edition.