Growth in B2B vs B2C 🥊

How to adapt your Growth strategy to your business model?

Apr 12, 2023

Hi, it’s Pierre-Jean from The Growth Mind 👋

In today’s article, we deep dive into the main differences between doing Growth in B2B vs B2C, and how you should adapt your Growth Strategy.

But first, let’s start with a big update + results of the survey I sent you 2 weeks ago.

1# The Growth Mind is switching from French to English

Starting today, the Growth Mind next articles will be in English only.

For the newcomers, you probably don’t know it, but The Growth Mind was before today a newsletter written in French 🇫🇷, my mother tongue. As I want to expand globally, I made the choice to start writing in English.

The previous articles will be progressively translated to English, so everyone will be able to enjoy them.

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10 days ago, I sent you a survey to better know who you are, what content you want to see in The Growth Mind, and which format you prefer.

In a nutshell, here are the results:

Thanks again to everyone who participated, that was really helpful! Let’s go for the article now.

Growth is a crucial aspect of any business, whether it’s B2B or B2C.

But the approaches for growth can differ significantly depending on your target audience, business model, and other factors. In this article, we will explore the main differences between growth in B2B and B2C companies.

Let’s first define what I call B2B and B2C in this article:

B2B: Companies having hundreds or thousands of Customers maximum. The company can sell either a product or service, but generally to a reduced target segment. In B2B we can include services companies (agencies, consulting businesses), high-ticket SaaS, and niche enterprise products. I exclude from the B2B definition here huge SaaS having hundreds of thousands of users or customers that are mostly PLG driven (Figma or Notion for example).

B2C: Companies directly selling to a large amount of customers (more than thousands). We can include here a lot of well known mobile apps, e-commerce or even SaaS products targeting a huge amount of users can be more considered as B2C than B2B in the way they approach Growth.

The right question to ask here is:

Do you have a strategy targeting a small number of customers, where you can spend a lot of time and effort to convert them? → If yes, you should have a B2B growth approach.
Or do you have a broader target where you seek volumes and low to zero human intervention? → Then you should have a B2C growth approach.

Let’s now look at the differences of doing Growth in B2B vs B2C, based on 7 criterias.

Growth Team Funnel Focus 🔎

The B2B sales funnel tends to be longer and more complex than the B2C funnel:

The emphasis of the Growth team is on lead generation, qualification, and nurturing before closing a deal.
Growth people's responsibilities are often related to feeding the top of the funnel for sales, or ops automation.
For Growth teams, it's important to focus on not only generating leads, but also on the quality of those leads, and making sure they align with the company's target customer persona.
The sales team plays a crucial role in the B2B funnel, and growth teams often work closely with sales to optimize the process.

The B2C sales funnel tends to be shorter and more transactional than the B2B funnel:

Growth team focuses on converting visitors to users and then customers.
Growth people's missions can be on user acquisition, activation, retention, and monetization. The way B2C teams approach Growth is more full funnel.
In B2C, it's important to focus on delivering a great user experience that drives engagement and retention.
The product team plays a crucial role in the B2C funnel, and growth teams often work closely with Product to optimize the user experience and metrics like activation or retention.

Favorite tactics and channels 🎯

B2B companies rely heavily on outbound channels to generate leads and acquire customers:

Outbound: directly contact your ideal customers by email, calls, or LinkedIn.
Account-Based Marketing (ABM): targeting specific accounts with personalized messages and content.
Sales enablement: providing sales teams with the right tools and resources to close deals.
Lead nurturing: developing relationships with leads over time through targeted content and communications.
SEA: search engine ads are often used to capture high-intent researches.
Content & SEO: content is more and more becoming an increasingly important channel to generate demand in B2B.
Events & Public speaking: can be effective for B2B companies to establish thought leadership and generate leads.

B2C companies, on the other hand, often rely on organic channels like referral and virality to grow their user base. They are mostly driven by the product (Product-Led Growth):

A/B testing: testing different variations of messaging, design, and product features to improve conversion rates and user engagement. It’s way easier to do it in B2C due to the higher volumes.
In-product communications: sending push notifications or inbox messages to engage with users and encourage them to take specific actions in your product.
Gamification: adding game-like elements to the user experience to increase engagement and retention.
Referral programs: incentivizing current customers to refer friends & family is a popular B2C tactic.
Social medias/ads: leveraging social media platforms to reach a wide audience and engage with customers and potential users.
Influencer marketing: partner with social media influencers to promote products or services to their followers.
SEO and SEA: ranking on search engines, both organically or with paid ads, help capturing users searching your product or to solve a particular job to be done.

Favorite metrics 📈

B2B metrics are mainly account-based, as the final goal is to close a deal with a company.

Meetings booked: in B2B, meetings with potential customers are often the first step in the sales process, and measuring the number of meetings booked can help track the success of lead generation efforts.
Closed deals: closed deals is a metric directly related to the revenue which corresponds to the end of the sales funnel.
Average revenue per account: by multiplying this metric by the number of closed deals, you have your new revenue generated. Trying to increase the revenue per account is a smart way to generate more revenue without increasing the number of deals closed.
Churn rate: how you retain your existing customers is a major metric to monitor to understand if accounts stick with your product or service.

B2C metrics are user-based, as the final goal is to convert a user into a customer:

Sign-ups: number of users who have signed up for your product. It's an important metric to track as it reflects the effectiveness of your marketing and acquisition efforts.
Activated users: users who have taken a specific action within your product that indicates they are engaged and likely to continue using it. This metric shows how many users are actually finding value in your product.
Users reaching aha moment: the moment when a user experience the core value of your product and becomes more likely to continue using it. This metric is important because it can help you identify what features or experiences are most valuable to your users.
DAU/WAU/MAU: how many users are using your product on a daily, weekly, or monthly basis. They can help you understand how engaged your user base is and how often they are using your product. You should define the period of analysis depending on your product usage frequency.
ARPU (Average revenue per user): the average amount of revenue generated by each user over a given period of time. Increasing this metric can lead to significant revenue growth.

Some metrics like CAC(Customer acquisition cost) or website visits are universal and monitored by every business, no matter your business model.

Data usage 📊

B2B companies usually have fewer data compared to B2C companies:

Growth people rely more on qualitative data than quantitative data.
User interviews and directly discussing with your customers are key to gathering qualitative data.
The analytics tool stack is less developed and complex than in B2C.
You generally do not have more than 2/3 customer segments.

B2C companies, on the other hand, have a massive amount of data to work with:

Growth people rely on a mix of mainly quantitative data, backed by qualitative data.
Analysis and interpretation of data are essential to building growth strategies.
Quantitative data is everywhere if you have good tracking.
Discussing with users/customers is still super important to collect qualitative data.
Multiple tools and more complex data needs.
Having a huge amount of data helps you to create more user segments based on behavioral or demographical data.

Monetization 💰

B2B companies typically have higher margins and tickets than B2C companies.

Their pricing is account-based.
Subscriptions based on usage or company size are common business models. One-shot selling is also a popular model.

B2C companies have lower margins and tickets than B2B companies.

Their pricing is user based.
Freemium apps, paid subscriptions, marketplaces with a commission-based model, or E-commerce directly selling products are popular business models in B2C.

Growth Team interactions 🤝

In B2B, Growth folks work a lot with salespeople and with Marketing. They can potentially work with Engineers who support growth initiatives where tech skills are needed, like automation.

In B2C, Growth people are working hand-in-hand with Marketing, Product, and Engineering. They are more product-oriented than sales oriented as they work a lot on activation & retention.

Experiments & testing 🧪

Due to the longer sales cycle, B2B growth teams may have fewer opportunities to run experiments, but they still need to be agile and willing to pivot if necessary.

A/B testing and experimentation can be used for feeding the top of the funnel, in areas such as website optimization, email campaigns, and ad copy, but are generally less representative than in B2C due to a smaller amount of data.
Experimenting with big bets could be necessary to produce a drastic improvement in a metric.

B2C growth teams typically have more opportunities to run experiments because they have more volumes.

They can use a variety of testing methods, such as A/B testing, multivariate testing, and user testing.
Experimentation can be used to test on many funnel stages, from product features and pricing to website design and marketing campaigns.
A variety of small winning experiments can lead to a huge metric increase.
However, small wins can’t replace the impact of big bets, so as in B2B, B2C growth teams should never forget big bet experiments.

Wrap-up: how to adapt your Growth Strategy to your business model? 📝

The main differences in doing Growth depending on your business model can be on funnel focus, channels and tactics, metrics, data, business models, team interactions, and experiment and testing culture.

B2B companies, with longer and more complex sales funnels, rely heavily on outbound channels and account-based marketing, whereas B2C companies tend to have shorter and more transactional funnels, and focus more on organic channels and virality.
B2B metrics are mainly account-based, while B2C metrics are user-based, and their data needs are also different.
B2B companies have higher margins and ticket prices, while B2C companies rely more on individual users with lower margins.
B2B growth teams work more with sales, while B2C teams work more with product and engineering.
B2B companies may have a more measured approach to experimentation and testing, while B2C companies may be more willing to take risks and try new things.

Regardless of your Business model, growth remains a crucial aspect of your business, and having a deep understanding of your target audience and their needs is key to building the right long-term strategies.

That’s all for today! 👋 Thanks for reading this article of The Growth Mind and see you in 2 weeks for the next article.

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