B2C Vs. B2B SaaS: Understanding the Difference

Software as a Service (SaaS) is a software distribution model in which applications are maintained by third-party vendors and provided to customers over the Internet. SaaS customers are mostly companies and sometimes end-users of applications. Therein lies the difference between B2B and B2C SaaS companies. 

A common example of a B2C SaaS provider is Google. We use Google Docs and Google Driver every day. And almost all companies track results with Google Analytics. These applications are SaaS products.

With B2B SaaS, enterprise customers don’t need to download or install the app on their desktop. Instead, they can access your copy of the application anytime, anywhere from your computer or mobile phone through an Internet connection.

 The application’s source code is the same for all users and will be updated for all customers as new features become available. For storage, depending on the level of the service contract, customer information for each module can be stored locally, in the cloud, or both.

Let’s take a closer look at B2B and B2C SaaS.

What Does B2B SaaS Mean?

By understanding the term “SaaS Product”, you fully understand the meaning of B2B SaaS. B2B refers to a company that sells products/services to other companies. So, it is clear that B2B SaaS refers to a company that provides software (applications, add-ons, add-ons) to other companies as a service. 

Their products are designed to help businesses operate more efficiently with highly automated technology. Its main purpose is to reduce the cost of human resources. Because of this value, many businesses use this SaaS software to optimize sales, marketing, and customer service to improve store performance and increase revenue.

In terms of customer success, it seems to be a key part of a successful business. By realizing this, e-commerce companies are now actively investing in customer service. If the first customer wins, you will be a regular customer. In recent years, several major B2B SaaS companies are offering successful customer applications to enterprise customers.

What Does B2C SaaS Mean?

The term business consumer (B2C) refers to the process of selling products and services directly between a company and an end-user of a product or service. Most companies that sell directly to consumers can be classified as B2C companies.

B2C saas companies offer their software as a service. Their target customers are individual consumers who want to buy what they offer for personal use. To drive sales on the B2C saas platform, B2C marketers focus all their marketing efforts on the aspirations, needs, and challenges faced by the average consumer of their products.

Differences Between B2C and B2B

Both acronyms indicate two distinct business models, but in more respects than just the name B2B and B2C differs in terms of designing products to meet the preferred target audiences.

You will have to decide whether your SaaS business is B2B, B2C, or anything else if you want to successfully market your business. 

Find out the key differences between B2B and B2C businesses to help you decide the right approach to market your company and products to the right people.

Are there any differences between selling B2B SaaS and B2C SaaS? In terms of churn and customer marketing, the answer is yes.

B2B Vs B2C- Churn Rates

Higher bounce rates reduce the likelihood of success in SaaS, so metric codes are getting a lot of attention. To understand churn correctly, it’s important to understand your target audience.

B2C saas has a higher churn rate than B2B churn. But Why? B2C customers are usually people who receive less attention than companies. Because many products aimed at individuals are sold for entertainment, consumers can get bored and get away from the product. B2C sales generally do not require participation, resulting in lower CAC (customer acquisition costs). However, low engagement rates lead to shallow relationships and lower customer loyalty. Also, B2C customers have a lot of trouble leaving their credit cards (e.g. they can no longer pay, their billing information is out of date and inaccurate, etc.).

B2B has a low bounce rate, so boredom doesn’t matter because companies usually buy products to solve the problem. As long as the product continues to make life easier for our customers, we will continue to use it. In B2B, customers often sign contracts to continue using their products for an extended period. More customer-focused sales skills develop personal relationships and increase customer loyalty. Payment information is out of date and payment is independent of personal finances.

B2B churn occurs when the product is no longer available. For example, the product does not solve the problem or is too expensive or not easy to use for the product it offers. If the customer is a small or start-up business, there is a slight churn due to a business failure. For large customers, evacuation may be due to a lack of customer service or products that are not integrated with existing systems. Also, company sales can increase churn rates when customers lose someone they enjoyed working with.

For more information, including churn reduction ideas, check out the blogs over at Profitwell.

B2B vs B2C Saas- Marketing

Marketing takes place at multiple customer levels, including the level of experience, social media use, motivation to buy, and the sales cycle. B2B and B2C marketing differ in the following dimensions:

B2B

  • Your customers are more likely to be experienced and professional. They probably want a more detailed and professional presentation.
  • B2B marketers prefer Twitter and LinkedIn.
  • Buyers are driven by the need for logic and problem-solving.
  • The sales cycle is long. Many people are involved in making purchasing decisions, often with long-term contracts and large amounts of money.

B2C

  • Customers are usually inexperienced and different. The language should be simple, avoid jargon and grab the attention of a broad audience.
  • B2C marketers prefer Facebook, Twitter, Pinterest, or Instagram.
  • Shoppers are emotional. Buy “what you want, not what you need”.
  • The sales cycle is short. Buyers are usually the ones who have the right to buy. The dollar is low.

B2B vs B2C Saas-social media

Yes, they are all on social media. But that doesn’t mean that everyone uses it the same way. According to MarketingProfs, 81% of B2B tech marketers use LinkedIn, and 71% use Twitter to market their new products.

At the same time, research by AgoraPulse shows that B2C companies are more likely to search for customers on “entertainment” networks such as Facebook, Twitter, or Instagram.

That doesn’t mean that SaaS marketing on social media should be limited to specific networks based on the type of customer you serve. The statistics above show that most B2B SaaS find customers on LinkedIn, while B2C partners attract more people from other networks.

However, all of the above networks should have both types of SaaS companies. The biggest difference is where they focus most on effort and budget.

B2B vs B2C Saas-sales cycle

You can hardly see B2B buyers buying impulsively. At best, you can sign up for a free SaaS trial. But they wouldn’t buy that way.

In B2B SaaS (and generally B2B sales), purchases go through a very long list of approvals. Everyone from group leaders to senior management and investment departments has an opinion on this issue. So, the entire buyer journey can take a year or more.

For B2C SaaS, the cycle is much shorter. People can buy these services on impulse. Yes, you can cancel your subscription later, especially if it is not suitable for the product you are selling, but impulse purchases are still possible.

B2B communicators can focus on the product resolution capabilities of SaaS solutions, while B2C communicators can focus more on emotions. Also, the latter should write shorter and effective posts, while the former should carefully research and focus on the content used.

B2B vs B2C SaaS – relationship management

B2B companies need to nurture their client relationships often if they want to retain customers long-term. Essentially, the close integration with the customer’s business requires these companies to improv the customer experience. Everything from the interactions with the support team to product usage will affect these experiences. B2C companies hardly need to work on close relationships, because the product itself leads from the front when it comes to retaining the users. As long as the product is delivering what the user expects, they would continue using it without fail. 

Conclusion

In a nutshell, B2B SaaS involves dealing with a much smaller market and traffic, but there’s a large budget to spend. However, the smaller pool also means there is a small margin for error. The space to recover is a bit more in the B2C space, although B2B SaaS companies try their best to not upset their users. Social proof and user testimonials still play an essential role here. And to make sure they are all positive, it’s crucial to provide value to your target audience at every touchpoint. Doing so will also help you bring down the churn rate.