As a business owner, you may think about entering the world of SaaS by developing your own product or reselling an existing one.
You might have even started building your website or landing page in anticipation of launching your service. However, before you invest time and resources into this venture, it’s important that you understand how marketing strategies differ depending on whether you are targeting businesses or direct consumers. This blog post aims to highlight the key differences between B2B and B2C SaaS Marketing and what you should keep in mind for each.
What does B2B Saas mean?
Business-to-business software, or sometimes shortened to B2B, is marketed and sold to other businesses. The intention behind the purchase of your product could be resale for profit or internal use.
B2B software is delivered both online and on-site. It can comprise business applications that provide a wide range of functions, such as sales force automation (SFA), customer relationship management (CRM), enterprise resource planning (ERP).
What does B2C Saas mean?
B-to-C or B2C means Business to Consumer. It describes a business that sells products or services directly to consumers. Large-scale retailers like Walmart and Target are good examples of B2C business. In SaaS industry Microsoft Office Home, Online Gaming Subscriptions, Personal Antivirus, etc. are good examples of B2B software.
The target customers for B2C SaaS companies are consumers who want to buy their software for personal use. B2C SaaS marketers focus their efforts on aspirations, needs, and challenges faced by the average consumer of their products.
Key differences between B2B and B2C Saas marketing
Churn rates :
B2C companies are bound to have higher churn rates than B2B. With B2C when a customer decides they don’t like what you do, it’s easier for them just to leave and find something else; this is not the case with B2B businesses.
Retaining an enterprise account requires greater levels of commitment on both parties because there is always the potential for mutually beneficial outcomes in the future that may outweigh any current dissatisfaction. This results in lower churn rates among enterprises when compared to consumer businesses.
There are simply more individuals than businesses in this world. There is an enormous difference in the market size between direct consumers and enterprises. Consumer markets consist mainly of one user type example – millennials, geeks, tech-savvy, creatives, etc. Enterprise markets are more complex, as they comprise multiple user types, such as individuals, partners, and vendors.
High-level enterprise marketing professionals rarely have the time to do keyword research or SEO, unlike B2C SaaS marketers who can leverage this strategy in a much better way. Since the B2B audience is comparatively smaller, the associated search volume is less and competition is cut-throat. This means it takes longer for B2B SaaS businesses to achieve visibility online through organic traffic sources.
For B2C marketers, it’s easier to generate buzz because the acquisition cost is much lower. This stems from cheaper advertising rates on channels like Facebook and YouTube as the marketer uses broad targeting. For enterprise marketing managers, this same strategy would be disastrous. The cost of a product is much higher and broad targeting will yield no results. Hence, the marketers are often burdened with high budgets, which require a higher return on investment (ROI) to justify continuing spending heavily into future periods.
Enterprise SaaS markets have far fewer competitors than consumer software markets – think about how many CRM providers there are versus web hosting companies. This means that you can get away with lazy marketing tactics like blasting email campaigns without having to worry about the potential lost revenue from failing to drive conversions.
Service vs. product:
It’s also worth noting that enterprise software companies sell services that come with higher up-front costs than consumer products, so it makes more sense for them to have a longer sales cycle and use inbound marketing strategies such as nurturing leads before they initiate meetings and sales calls. B2C marketers can affordably acquire new customers through paid advertising channels like Facebook without any significant investment of time or money upfront.
Marketing channel options:
Enterprise marketers often rely on multiple marketing channels as compared to consumer marketers because their budgets allow them greater flexibility in how they spend their resources. The most common channels used by B2B businesses include LinkedIn ads, content marketing, social media advertising, and affiliate marketing. Marketing channels for B2C mostly include Facebook, Google AdWords, and Twitter. B2C marketers can afford to spend less on acquiring new customers since their product also costs less.