Benefits - Detriments of Business to Business (B2B) Relationships - Explained
Why are B2B Relationships Beneficial?
Written by J. Mance Gordon
Updated at April 17th, 2024
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What are the benefits of B2B Relationships?
A key feature of business to business marketing is the relationships that we have with our customers. There are fewer customers if we are targeting other businesses (especially if we have an industrial type product). There are numerous notable benefits to these relationships, including:
- Increased Efficiency - If we know each other as a buyer and a seller, we can work very smoothly together. We don't have to spend a lot of time learning about the other person as if we were going out and finding a new person to buy from or a new person to sell to.
- Shared Resources - We may be able to use each other's resources to do better or be more profitable. For example, that could involve collaboration in promotion, the transportation of goods, operational synergies, etc.
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Potential Cost Reduction - We don't have to spend as much money marketing ourselves when we have good relationships with our buyers. From the buyer's standpoint, you may get a better price on the product because you have a good relationship with the seller.
What are the Drawbacks of B2B Relationships?
There are numerous drawbacks associated with business relationships, including:
- Reduced Flexibility - We may be limited by the preferences of our customers. As a producer or as the the seller, we may want to move to a new material for our product or we may want to redesign our product. If that doesn't suit our biggest customer or any customer with which we have a relationship, it might not work for us to make that change.
- Lost Opportunity - You may not be able to take advantage of outside opportunities. Whichever side of the relationship you're on, it may mean that you can't really create other relationships without hurting the existing relationship. For example, we may not be able to sell to our biggest customers biggest competitor. That might harm the relationship that we have with the existing customer. So, that's a lost opportunity.
- Increased Costs - If we have to produce a product in a way that is very specific or requires higher quality than we would normally need for ourselves, that's a higher cost for us to produce it.
The key for us as marketers would be to maximize the positive impact and try to limit the negative impact of these aspects of those relationships that we have with our customers.
Related Topics
- Business to Business (B2B) Definition
- Business to Consumer (B2C) Definition
- Business to Government (B2G) Definition
- Business Customers are Different from Consumers
- What Drives Purchase Decisions?
- Types of Purchase Decisions
- Who Makes Purchase Decisions?
- Role of the Business Buying Center
- Identifying Options for Purchase
- Benefits/Detriments of B2B Relationships
- What is Included in a Business Relationship?
- What are Kickbacks a Bad Thing?