What is the B2B2C Business Model and How It Is Transforming Businesses

60% of millennials are loyal to firms that provide a unique shopping experience. They have the power to spend $1.4 trillion (accounting for 30% of all retail sales in 2020). The B2B2C model helps to take control of the customer’s shopping experience.

 

70% of business buyers look for a user experience, like Amazon, when they buy goods. 74% of business buyers want a personalized shopping experience.

 

For example, take ratings and reviews. When Amazon started rolling out reviews, many retailers wanted the same functionality. The customers turned to PowerReviews or BazaarVoice.

 

A “white label” solution of PowerReviews or BazaarVoice does not show its brand. Instead, it does the backend software and hosts customer reviews and customer accounts. This is a standard B2B software.

 

There may be another solution. Reviewers on Sears.com know they are creating a BazaarVoice account. The account is for a review that shows up on Sears.

 

They can use that account to leave reviews on other retailers as well. They can browse reviews across all retailers on BazaarVoice.com.

 

This would be B2B2C. It is assumed that BazaarVoice seeks to profit by building an extensive consumer network.

 

An example of a B2B2C healthcare eCommerce website is Insightec. It addresses its technology through patient testimony, doctor’s insight, and operational efficiency. 

 

The B2B2C model can work in several different industries, and it does not look the same for each business.

 

That being said, B2B2C is by no means some panacea.

 

It is hard to build a product that enterprises or consumers love. But building one that is loved by both is more than twice as difficult.

 

However, you may keep the incentives of your B and the second B perfectly aligned. Then you are onto something big.

 

So, let us dive into the corners of B2B2C and look at what it is, the benefits and its challenges, and how it can succeed.

 

How does the B2B2C model work? 

 

 

In the transition to a B2B2C process, the intermediary gains data or customers. They also gain customers whose shopping experience they can improve. 

 

• Company B is the focus

Company B wants to offer a service that would enhance its value proposition. But it does not want to develop the internal capabilities to offer the service. 

 

E.g., Casper using Affirm. Affirm gets users as if customers buy and want to spread the cost.

 

• Company A is the focus

Company A wants to develop brand awareness and get customers by using partners. E.g., Opentable. Opentable acquires customers each time people sign up and book a restaurant reservation.

 

The critical thing is that both Company A and Company B want the same customers.

 

A B2B firm may offer a meal delivery service to its employees. This is done through a corporate wellness program.

 

You could approach the B2B company as a B2C pastry shop. You could ask them to add your desserts to their meal offering.

 

So, you could agree to share the digital e-commerce platform’s costs. Your regular pastry menu and the corporate menu are housed.

 

In this way, your B2C company helps add value to consumers by offering a more excellent product range. You are benefitting from reduced overhead costs.

 

People use your products through the original corporate meal program. They may grow into loyal customers.

 

They may place in addition to their participation in the corporate program. Hence, they may use your services without the original B2C company.

 

Why is the B2B2C model successful?

Businesses with a B2B2C model include OpenTable for restaurant bookings or Instacart for Groceries. The intermediary business’s role is integral to the satisfaction of the customer. 

 

We live in an age of Amazon, where convenience and user experience are paramount. Consumers are increasingly expecting seamless digital shopping experiences.

 

Some studies suggest that customer experience is the leading factor in sales. Product price comes in second.

 

Small businesses have a leg up to compete with more extensive services. This is with the help of B2B2C businesses.

What are the benefits and pros of a B2B2C model?

There are many benefits of a B2B2C model. They include:

 

• Access to qualified leads

 

• Reduced overhead

 

• Enjoy big-brand credibility

 

Access to qualified leads

A qualified lead is a prospective customer with the markings of a consumer. They would benefit from your products.

 

E.g., a B2B firm offers corporate cleaning services. It may be open to giving a B2C landscaping business access to their mailing list.

 

This will help to gauge interest in expanding their list of services to lawn maintenance. 

 

In the same way, entering a B2B2C model means you enjoy a robust customer list. The list that another company has taken the time to compile and maintain.

 

Reduced overhead

Entering into a B2B2C dynamic helps you benefit from a larger business’s stability. You can tap into its logistics.

 

Instacart does not have to worry about stocking or storing consumer goods. They transport them in their B2C role. This is done through their relationship with large grocery chains. 

 

Similarly, you can skirt the restaurant industry’s steep startup costs. There can be customer experience optimization with a B2B2C integrated service. The service can be for an established restaurant business.

 

Enjoy big-brand credibility

One of the hardest things for a business owner is building up a brand name for yourself. This is required to grow your profits and customer base.

 

You can take on some “contact credibility” with the B2B2C business model.

 

This can be done by being associated with the larger, established business.

 

How B2C businesses can take advantage of B2B2C

B2C success stories usually ride a massive wave. Nobody can predict this. 

 

A prime example of this is Uber. It became a killer app for the mobile world. This factor was combined with the mobile phone boom. It resulted in unbelievable success for Uber.

 

One thing B2C small business owners know best about their business is the product. On the flip side, they are least familiar with customers’ online shopping experience.

 

This is as small businesses do not have time or technical aptitude for maximizing this side. But, a smooth online shopping experience is key to happy and returning customers. 

 

B2C businesses can tap B2B customer experience solutions. This ensures that their e-commerce experience represents its product and service optimizations.

 

B2B and B2B2C

A white label solution doing the backend software is standard B2B software.

 

But a solution where consumers create an account with the first B would be B2B2C.

 

Why is this important? Eventually, customers become untethered from the middle B. Consumers recognize that YOU (the first B!) are the product they use.

 

Think Affirm in consumer lending and Instacart for grocery delivery.

 

Well-structured business deals led to lots of downstream consumers. There is no per-customer acquisition cost in each case.

 

Entering a B2B2C model can be transformative for B2B businesses. This is because it can create new channels for making profits.

 

A large part of B2B business happens in a vacuum.

 

Access to new efficiencies and customer bases can exponentially increase their customer base.

 

Some strategies for doing B2B2C work

You may have an idea or a business that can be leveraged as a B2B2C opportunity. Then it is time to get to work. 

 

Research the market and consumer need

To find the next golden B2B2C opportunity, research the industry you want to enter. 

 

Find out where the friction points for consumers exist. You may have pinpointed a company that needs B2B2C integration.

 

It is good to conduct a small brand audit to help ensure its target audience, and yours overlap.

 

Reverse-engineering

Another way to discover B2B2C integration opportunities is through reverse-engineering. This is done by looking at barriers in a specific company’s buying journey. 

 

You will come out the hero as you propose to solve it for them through the partnership. 

 

Forums are ripe with this type of information on a wide selection of brands.

 

An electronics store forum may show dissatisfaction with customer service response rates. This may be a ripe opportunity for a developer to create responsive chatbots.

 

Challenges, cons, and things to consider

The trend of capitalizing on the B2B2C business model shows no signs of slowing down. But there are considerations before entering into such a partnership. They include:

 

• Brand credibility

 

• IT compatibility

 

• Legal agreements

 

Brand credibility

Working with an established brand means that you inherit its credibility and mistakes. 

 

Before entering a business relationship, it is always good to conduct some background research.

 

The firm should have a bigger plan for improving customer experience. You will understand and how you can help play a role.

 

IT compatibility

Customer experience optimization is the outcome of the B2B2C business model.

 

This industry requires detailed knowledge of web and sales platforms.

 

Your offering will be plugged into these platforms.

 

Legal agreements

Two businesses may partner in a B2B2C partnership. It entails an exchange of private company information.

 

It should only be done with the help of a legal representative.

 

This will ensure that both companies’ rights are protected.

 

B2B2C Case Study: Did you know Google was a B2B2C?

Google’s deal with AOL helped it to become a tech giant. AOL was a tech giant. Google was still in its infancy.

 

The search engine from Mountain View was snowballing. But it still missed the first-scaler advantage. It would have given it the search industry’s dominance.

 

Google was already a consumer product. But, it needed to pass first through a set of bottlenecks to gain access to consumers. Also, the more data Google gained over time, the more it got better.

 

More and more consumers got to know about it. So, Google’s reliance on distribution channels like AOL decreased. But Google did not take advantage of AOL.

 

Quite the opposite. Google offered AOL a minimum guaranteed revenue. It bought a stake in the company.

 

Conclusion

You may want a predictable growth trajectory and high odds to build a sizable business. Then go for B2B.

 

If you are aiming for the groundswell, B2C is your ocean. But know that statistics indicate a likely belly-flop!.

 

You may accomplish the incredibly challenging task of building a 10x better product. This is both from a business and end-consumer’s perspective.

 

Then the reward is that B2B2C lets you have the best of both models.

 

Evaluate how your B2B or B2C business be part of the solution. Ensure appropriate funding to integrate the business processes tightly.

 

The B2B2C business model is here to stay. Ensure your business stays on the top. Take the benefits of this model now!