Creating a B2C vs. B2B Value Proposition

by Sat Duggal

Value Based Pricing

B2B_or_B2C_DuotoneValue propositions are one of the most important contributions marketers make to the growth of their businesses. These critical promises compel customers to choose our offering over the offerings of our competitors. But how is creating a value proposition different for consumer vs. B2B businesses?

Strong value propositions are equally important in both types of business, but there are some important differences in complexity and application. Awareness of these differences can help both B2C and B2B marketers create more nuanced value propositions that move the needle on sales. While it is hard to generalize given variations across industries and products, here are some key differences.

Customer Definition

  • B2C. In most consumer businesses, the target consumer is an individual or a household. Whether marketing a bar of soap or a holiday destination, marketers deal with either the shopper or the individual/household user.
  • B2B. Business customers have multiple roles involved in the purchase and use of products and services. There are gatekeepers, influencers, decision-makers and approvers—none of which may be the actual users. The value proposition must be able to stretch and morph to appeal to this multi-headed buying unit.

Customer Value

  • B2C. The promise of value is typically a combination of a functional benefit (e.g., cleaning efficacy, time-saving) and emotional benefit (e.g., home pride, peace of mind). The emphasis is on uniquely delivering the emotional benefit through the functionality of the product/service.
  • B2B. Business value propositions generally place a stronger emphasis on the financial value of their offering. Appeal increases based on the strength and clarity of the offering’s case for uniquely helping a business reduce costs and/or grow revenues. Emotion still matters. Trust, peace of mind, ease of doing business are all relevant emotional drivers of business purchases, but the emphasis remains with the unique economic value of the offering.

Value Chain

  • B2C. Consumer businesses usually go to market through a relatively simple 1-2 step value chain.
  • B2B. B2B companies may have a far more complex value chain with multiple channel partners involved. B2B marketers have to create multi-step value propositions that appeal to the different entities in the value chain. For example, a new medical procedure needs to have a value proposition that appeals not just to patients but also to physicians, hospitals and payers.

It takes effort and skill to create compelling value propositions in any kind of business, and we believe B2C and B2B marketers have a lot to learn from each other. While consumer marketers can learn a lot from B2B marketers on how to address shoppers and influencers, B2B marketers can learn a lot about how to embed emotional appeal into their value propositions.

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Keywords: Value Based Pricing