matt higgins

In marketing, audience is everything. I’m a strong proponent of persona-based targeting, but before you pick up the fine brush for the details, you need to take on the broad strokes. That’s where your business model comes in. B2C, B2B, DTC are, at their core, really just a way of identifying your audience.

B2C (Business To Consumer): this is the common retail model. The retail juggernaut Walmart is a retail business that sells to consumers. B2C can be brick-and-mortar retailers or online shops or both. In this model there are manufacturers, distributors, and retailers. In the B2C model, your customer might be a distributor, but the marketing hardly stops there. A brand should never count on someone else to actually sell their product. You still need to market to the consumer, and you need to arm the retailer for success with point-of-sale merchandising and the proper information they need to sell your product.

B2B (Business To Business): a current popular example of the B2B model is SaaS (Software as a Service) industry. Here a business is selling a software product in the form of a service to another business. Salesforce is an example of a SaaS B2B. Aramark, an international food service company, sells its services to businesses such as Ford. It’s worth noting that in much of B2B, the key decision makers (i.e., the purchaser) are almost never the actual end users. This reality impacts marketing messaging as what’s important to the decision maker is different than the employee using the software, product, or service.

DTC (Direct To Consumer): in this model, a business is selling its product directly to consumers. Distributors and retailers are removed and margins are increased. A pure DTC model can increase revenue per unit due to better margins, but other costs increase, so profits might not always meet expectations. It’s important that brands recognize that using a DTC model is more than having a website, and while increased margins might be the lure, the real value is the direct relationship with the consumer in terms of relationship and data.

Hybrid

Some businesses engage in all three models simultaneously. Horizon Hobby, for example, manufactures its own proprietary products and also distributes other competing brands. As a wholesaler, it sells and distributes these products to retailers, but Horizon also has its own retail websites where it sells directly to consumers. The key takeaway is it’s important to recognize the needs and messaging are different because the audience is different. Selling a product to a local retailer requires much different marketing than selling directly to the consumer.