You may already know that a B2B business model is one where companies sell to other companies and that a B2C business sells its products and services to customers directly. But where does B2B2C come in?
At its core, the term B2B2C works to create a better customer experience for the end consumer, with a business playing an intermediary role to increase the customer’s overall satisfaction in the buying journey. B2B2C is a business model that prioritizes consumer experience. When done right, it can be transformative for all businesses involved.
How does the B2B2C model work?
In the transition to a B2B2C process, the intermediary business gains data or customers that they can sell to or whose shopping experience they can improve.
For example, a B2B business may offer a meal delivery service to its employees through a corporate wellness program. As a B2C pastry shop, you could approach the B2B company about adding your desserts to their meal-offering, and agree to share the costs of the digital e-commerce platform where the corporate menu and your regular pastry menu are housed. In this way, your B2C company is helping add value to consumers by offering a greater product range, and you are benefitting from reduced overhead costs.
As consumers use your products through the original corporate meal program, they may grow into loyal customers and place orders in addition to their participation in the corporate program. They may also keep using your services even after their employment with the original B2C company has ceased.
Why is the B2B2C model successful?
Businesses that have capitalized on the B2B2C model include OpenTable for restaurant bookings or Instacart for Groceries. When you think about these types of businesses, the role of the intermediary business is integral to the overall satisfaction of the customer.
As we live in an age of Amazon, where convenience and user experience is paramount, consumers are increasingly expecting seamless digital shopping experiences. Some studies even suggest that customer experience is the leading factor when it comes to sales, with product price coming second. With the help of B2B2C businesses, small businesses have a leg up to compete with larger services.
What are the benefits of a B2B2C model?
There are many benefits of a B2B2C model that businesses can benefit from. They include:
- Access to qualified leads
- Reduced overhead
- Benefit from big brand credibility
Access to qualified leads
In marketing, a qualified lead is a prospective customer that has the markings of a consumer who would benefit from your products. For example, a B2B business that offers corporate cleaning services may be open to giving a B2C landscaping business access to their mailing list to gauge interest in expanding their list of services to lawn maintenance. In the same way, entering a B2B2C model means you benefit from a robust customer list that another company has taken the time to compile and maintain.
Reduced overhead
As a B2B or a B2C business, working with other businesses to enter a B2B2C dynamic means that you will get to benefit from the stability of a larger business with its own logistics that you can tap into. For example, the B2B2C business Instacart doesn’t have to worry about stocking or storing consumer goods – all they do is transport them in their B2C role through their relationship with large grocery chains. Similarly, you can skirt the steep startup costs of the restaurant industry by taking on the role of customer experience optimization with a B2B2C integrated service for an established restaurant business.
Benefit from big brand credibility
As a business owner, one of the hardest things is to build up a brand name for yourself. This is the prerequisite to growing your customer base and your profits. The B2B2C business model allows you to take a shortcut and take on some “contact credibility” just by being associated with the larger, established business.
How B2C businesses can take advantage of B2B2C
B2C small business owners will tell you that one of the things they know best about their business is the product. On the flip side, the most common answer for an area they are least familiar with is the customers’ online shopping experience. This is because a lot of small businesses don’t have time or technical aptitude for maximizing this side of running a business. However, a smooth online shopping experience is key to happy and returning customers.
B2C businesses can tap into B2B customer experience solutions to ensure that their e-commerce experience is representative of the hard work they put into their products and services through optimization.
How B2B businesses can take advantage of B2B2C
When it comes to B2B businesses, entering a B2B2C model can be transformative because it can create new channels for making profits. A large portion of B2B business happens in a vacuum, and gaining access to new customer bases and efficiencies can exponentially increase their customer base.
Some strategies for making B2B2C work
If you think you have an idea or a business that can be leveraged as a B2B2C opportunity, it’s time to get to work.
Research the market to get to know the consumer need
The first step to finding the next golden B2B2C opportunity is to thoroughly research the industry you want to enter and where the friction points for consumers exist. After you’ve pinpointed a company that has a need for B2B2C integration, it’s a good idea to conduct a small brand audit to help ensure its target audience, and yours overlap.
Reverse-engineering
Another way to discover opportunities for B2B2C integration is through reverse-engineering by looking at barriers in the buying journey for a specific company – and come out the hero as you propose to solve it for them through the partnership. Customer support forums and subreddits are ripe with this type of information on a wide selection of brands. For example, if an electronics store consumer forum shows a high degree of customer dissatisfaction with customer service response rates, this may be a ripe opportunity for a developer who specializes in creating responsive chatbots.
Challenges and things to consider
While the trend of businesses capitalizing on the B2B2C business model shows no signs of slowing down, there are important things to consider before entering into this type of business partnership. They include:
- Brand credibility
- IT compatibility
- Legal agreements
Brand credibility
Working with an established brand means that you inherit its credibility as well as its mistakes. Before entering in a formal business relationship, it’s always good to conduct some background research to ensure you’re associating yourself with an organization that has a bigger plan for improving customer experience, and how you can help play a role.
IT compatibility
Because the outcome of the B2B2C business model is customer experience optimization, entering into this industry requires intimate knowledge of various web and sales platforms that your offering will be plugged into.
Legal agreements
When two businesses partner in a B2B2C partnership, it entails an exchange of private company information that should only be done with the assistance of a legal representative to ensure the rights of both companies are protected.
It’s not difficult to see why B2B2C business models are starting to become more common. In a way, this new business model is a way to help smaller, agile businesses help more established ones find ways to better serve their customers. How will your B2B or B2C business be part of the solution?
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.