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Market research in the B2B segment - How to avoid the trap of copying the B2C approach?2018-07-04
The analysis of our client`s inqueries and our experience in projects conducted for various companies indicates that people who work in the B2B sector to buy and conduct research often use an approach taken directly from B2C markets. Is such analogy justified? In order to adress this question, this article has key information about research in B2B markets.
What is the difference between B2B and B2C markets?
B2B and B2C are the two types of market relationships in which agreements between parties are concluded. In case of the B2B model, both sides of the relationship are business entities, while in B2C, the relationships are between a company and a consumer.
The B2B sector significantly differs from the B2C sector in key areas. However, differences result not only from the products or services that are the subject of the transaction. They are also related to the way in which the exchange is conducted and to the relationships between entities cooperating in a given market.
The key features of the B2B sector include:
- A complex, formalised and often long-lasting decision process in which several organisational units of a company are usually involved.
- Products and services purchased meet business needs and are used for business purposes in which both sides of the transaction are professionals.
- Smaller number of clients compared to B2C markets, but with a higher unit value of transactions.
- High importance of relationships and personal contacts between company representatives and clients, despite the general trend of using modern technologies and transferring sales processes to the Internet.
Should the business model (B2B or B2C) determine the approach to market research?
Definitely yes. The differences between B2B and B2C segments are so significant that they require a different way of conducting market research projects. What should be kept in mind when preparing for a research study on B2B markets?
Research skills: Research studies in the B2B area require different skills than in the case of B2C markets. These skills should be used on all levels of responsibility for a research project: project managers, analysts, and interviewers. The people involved in the project need to demonstrate an in-depth understanding of the business context and acquire a significant amount of knowledge and information about a narrow and specialised industry. Only with that information and expertise, they can operate freely in the client's business world. Obtaining and analysing detailed and specialised information requires that all the people understand the area in which they conduct the research project. In addition, an open approach to the research project on the client's and the research agency's end is extremely important not to fall in the trap of their own experiences and not to copy their well-known and standard schemes.
Size of the research sample: In many situations, the size of the research sample in B2B research studies is smaller than in consumer projects. This is because the size of the population, and it has a significant impact on the research process approach. Working on a relatively small number of contacts requires treating them with the utmost care. In addition, researchers cannot succumb to the “magic of large numbers” and they have to remember that “many” does not mean “good”. In the area of B2B research, the sample size is not as important as its proper selection. Often, by conducting several or a dozen interviews with deliberately selected respondents and experts, one can get more information about the market than when interviewing several hundred randomly selected companies.
Selection of the research sample: Identifying the right respondents for B2B research is often the first and the most important challenge that research teams have to face. What does the area covered by the study look like within a given organisation? Who is responsible for this area? Who will be able to provide reliable information? These and even more similar questions should be answered while planning a B2B research project. As we mentioned at the beginning of the article, the complexity of the decision-making process is one of the key characteristics of B2B markets. Therefore, during B2B research more decision-makers should be reached within one organisation. The correct selection of respondents is the key to obtaining a full picture of the examined issue, even with a small size of the research sample.
Research techniques applied: The complexity of B2B markets means that projects involving several different and mutually complementary research techniques are more common than in consumer research. This approach requires project teams with relevant competencies to apply a variety of research methods and to develop an optimal research approach – in order to respond to a specific business problem. It is also worth emphasising that innovative research techniques, although valuable, are less important than understanding the business context and adopting comprehensive approach to the research subject.
Experts: Expert knowledge is much more often used in B2B research studies than in consumer research projects. Expert interviews with specialists in a given industry or opinion leaders (for example university professors, directors of scientific institutions, representatives of industry associations or journalists specialising in specific sectors of the economy) make it possible to look at the analysed issue from a broader perspective. Experts, more often than representatives of companies operating in a given sector, can look at the market as a whole, which is an added value of a research project. Therefore, it is worth using expert knowledge in such areas as researching trends, forecasting changes, launching new products on the market and assessing their potential.
As seen from the above analysis, there are significant differences between the research studies conducted on the B2B and B2C markets. Hence, it is not appropriate to extrapolate solutions commonly used in consumer research for B2B sector. In B2B research, the key to success is a unique, tailor-made approach based on a deep understanding of the business context.