The Differences Between B2B and B2C Market Research Explained
November 2, 2022 Edwin Kooistra
Market research is the central part of every SaaS product marketing strategy since this is how businesses identify target customers, market segments, the industry, and their competitors. Market research is conducted to understand the needs and pain points of target audiences so as to ensure your product solves them.
One of the essential phases of your go-to-market strategy is to distinguish between B2B and B2C market research. Professionals discuss that although the aim of both types of market research (B2B & B2C) is to convert leads to customers, however, research has already proven that these two marketing relationships massively differ.
Our article explores some of the major differences between B2B and B2C market research, and the benefits of both, and we study some great examples of each. Let’s begin by understanding what business-to-customer market research is.
What is B2C Market Research?
Business-to-customer, or, B2C market research is the process SaaS businesses follow to identify their target markets and customers, who are end users of their products and services.
Adobe mentions in a blog that B2C market research identifies individual audience members as customers rather than organizations.
B2C market research can also be termed consumer research since it is conducted by businesses through direct interviews, focus groups, surveys, questionnaires, etc.
Businesses conduct this research primarily to collect data regarding their products and services, including how they help customers solve their pain points.
What is B2B Market Research?
Business-to-business or B2B market research follows almost the same pattern as B2C, except that it targets businesses for research. B2B market research generally involves organizations and not individuals, hence they respond to market research in a completely different manner.
This type of market research is conducted to determine very significant factors including product development ideas, customer support gaps, identifying new segments to cater and understanding business buying behaviors.
Main Differences Between B2C and B2B Market Research
Although they may sound interchangeable, there is a vast difference between B2C and B2B market research processes. Here are five major differences between the two that professionals identify:
1 – Research methodologies
Research methodologies mean the framework or design of the market research to be conducted. This design is developed to ensure the right audience is being targeted while enhancing the reliability of the research.
B2B market research tends to focus on businesses and collects data related to organizations through more formal channels with smaller sample sizes. B2C data is individually based and has different data collection tools, channels, and sample sizes.
2 – Research tools
B2B and B2C market research employ highly varying tools to collect data. B2C uses mass research tools like customer focus groups, questionnaires, online surveys, social media surveys, etc. B2B tools are more formal and include phone interviews, direct meetings, and email surveys.
3 – Sample sizes
Generally, the sample size for B2C market research is larger compared to B2B market research.
Not Sure Which Market Research Is Good for Your Product’s Objectives?
Do you have a brilliant product but don’t know which market research method to go for?
At Chasm, we are here to assist your team builds the ideal product marketing strategy that identifies your ideal customers, direct competitors, pricing strategies, demand generation channels, and appealing content.
Our team examines your products and audiences to determine the most relevant marketing channels, go-to-market strategies, and research methods to deliver actionable marketing consultancy. Get in touch with our team now to discuss a strategic market research plan for your tech product.
Next, let’s look at some of the crucial benefits of conducting business-to-consumer market research.
Benefits of B2C Market Research
B2C market research can be invaluable for businesses that want to learn more about brand recognition and reach, the effectiveness of their marketing campaigns, competitors, different customer segments, consumer behavior, product development opportunities, and product pilot testing. Here are some known benefits of business-to-consumer market research.
Develops a consistent customer-focused approach
Market research focuses on business strategy and decision-making led by the needs and pain points of customers. B2C market research identifies critical buyer behaviors in addition to the solutions that they demand from businesses. Deloitte has previously identified that businesses that focus on customer needs and challenges tend to have 60% higher profitability.
Professional researchers discuss that using the segmentation, targeting, and positioning model is the most effective way to conduct customer-focused market research. This model identifies all the possible customer segments that will buy your product, the most profitable segments of the market, and how to position your brand against the competition.
Connects businesses to consumers more effectively
The modern customer demands more personalization and value from the brands that they purchase from. B2C market research identifies the right channels and content that different buyer personas enjoy. Marketing teams identify the tones, design, content types, brand messaging, and channels to market content through end-user market research.
This enables businesses to connect more effectively over the right channels while presenting a more personalized and appealing marketing message to audiences.
Identifies new growth opportunities
Regular market research can be extremely beneficial to identify new growth opportunities, especially for businesses that operate within niches. Market research is a very effective means to identify segments that are still unreached and haven’t had brand exposure. These can be audiences that can benefit from your product, or, provide an opportunity to innovate your product while adding a new segment of the market.
Market research can be highly lucrative to find partnerships with other brands and complementary products. These partner organizations can be both businesses and influencers who are already connected to potential customers of your products. Market research can also identify areas of innovation like new features, upsells, etc. that will enable adding new customers.
Allows low-risk testing of new products & services
Market research is an excellent way to test new products and concepts with real customers with minimal risk of loss or failure. Market research is the most important process that identifies if a product will be successful and profitable. Market research determines if a new product has potential among target audiences and if it will solve a customer pain point.
Data-driven & informed decision making
Strategic B2C market research can provide vast data sets that can enable organizations to make more informed decisions. A SaaS business cannot simply create a product and market it to everyone, hence reliable customer and market insights play a critical role in creating product marketing strategies.
Market research is detrimental to gaining a competitive edge by understanding your customers better and communicating with them more effectively. Consumer research can identify critical buying behaviors and areas of dissatisfaction of customers, which can help you to solve their needs better than the competition.
Keeps businesses updated on new or emerging trends
In a quickly evolving industry, SaaS businesses must keep up with emerging trends to keep engagement and communication consistent with target customers. Market research can discover new opportunities and uncover challenges before they become a problem.
While taking inspiration from your competitors is not a bad idea, it is crucial for businesses to conduct market research to understand changing buying behaviors, identify popular marketing channels, create appealing content, etc.
Example of B2C Market Research
A great example comes from Pepsi Co. when the company launched Pepsi Next in the US. Although Pepsi Co. had wealth of market and customer data to analyze, it conducted real-time customer testing and surveys in selected cities to determine if the product will resonate with new audiences.
This B2C market research allowed Pepsi Co. to determine if they will be able to attract a new audience, if their new product will be profitable, and to ensure that Pepsi Next will not tarnish sales of the original Pepsi.
Benefits of B2B Market Research
Business-to-business research can be momentous for a SaaS business, especially if they are in the startup stage. Here are some benefits professionals identify for B2B market research:
Enhance ROI growth
B2B market research is simply essential to enhance the ROI of your business through the latest customer insights, enhanced brand positioning, risk-free new product testing, and effective communication with your audiences. Critical insights about decision-making hierarchies, industry dynamics, competitor campaigns, real-time product tests, and improved content all contribute towards sustainable business growth.
Latest insights about business buying behaviors
Knowing the relevant decision-making process and buying behaviors of businesses allows B2B businesses to create more engaging marketing collateral, in addition to creating more convincing content for business customers. B2B sellers can improve and even completely rework their buyer journey to make it simpler and more informative.
Access to relevant target audiences
B2B market research can be extremely helpful for startups to reach their ideal customer profiles. Understanding audiences and determining which ones will be interested in purchasing your products is a prerequisite of the B2B product marketing strategy. Marketing teams can then determine the right tone, design, content, product use cases, and branding tactics that resonate better with these target audiences.
Market research remains an excellent technique to gauge the effectiveness of your existing marketing campaigns. Your team can evaluate the effectiveness of content, sales teams, and the product itself. B2B sellers can then use these valuable insights to give their product marketing campaigns a 360-degree optimization.
Gain competitive advantage
Understanding target audiences better and identifying opportunities quicker than the competition is a simple, competitive advantage. Actionable data through market research allows you to create valuable content, reach target customers over the right channels, and create more appealing brand messaging.
Identify new B2B market opportunities
Market research is the most effective means to identify new markets, new market opportunities, and challenges within the industry. Your teams can discover new buyer personas, use cases, areas to upgrade, opportunities for new product features, and develop new partnerships. Your team can identify audiences closely related to your customers, and identify a completely new product idea based on niche audience pain points.
Example of B2B Market Research
VISA, the global digital payment processor, is an excellent example of B2B market research. Persona profiling and buyer journey research were conducted by the global payment giant to gain deep insights into commercial bank decision-makers, which would later aid Visa’s go-to-market strategy and communication of new solutions.
VISA was faced with multiple market challenges including new competing payment solutions, customer demands for faster payments, and demand for more seamless payment solutions. The company already offered VISA Connect and VISA B2B Connect products that are assisting businesses make payments both locally and abroad.
To better understand how to communicate their B2B product to commercial banks, qualitative market research was conducted to discover new insights about the commercial bank audience. Visa identified unique buyer personas while mapping the buyer journey for their Visa Connect and Visa B2B Connect products.
Objectives of the research study included:
- The decision-making unit
- Key steps in the buyer journey and touchpoints/information sources used
- Desired outcomes (e.g., value drivers) at both the organizational and individual level
- Pain points faced across the organization and by each individual persona
- Perceptions of the Visa payment solutions tested
- Communication preferences
We hope our article could offer you a better understanding of the major differences between B2B and B2C market research. Depending on the industry that tech companies operate in, it is critical to identify if your product resonates better with businesses or with individual audiences.
Understanding the right buyer personas, the content they like, the solutions they need, the competition, and purchase behaviors are very crucial to develop a strategic product marketing strategy while keeping your business goals in check.