B2B2C

“Ooooooh, that’s what we do…”

I said as I finished this article. Then I Slacked it to the team (which, let’s be real, is where articles go to confuse the rest of the team).

So, here’s the highlights (italics are quotes, rest is my commentary)

Most companies either sell to enterprises (B2B) or consumers (B2C), although …there’s a third model, though, which is commonly called B2B2C.

It’s where your company sells a product/service to a business, gaining customers and/or data from that business that you get to keep and use. And where, most importantly, that group of customers becomes untethered from the middle B — at some point, they recognize that YOU (the first B!) are the product they use. Think Instacart for grocery delivery or OpenTable for restaurant bookings.

It can be complex to differentiate between a “channel partnership” and a B2B2C arrangement, but I’ll try to define it this way:

Business A needs to solve a problem (not stock an additional “product”) for its consumers — often a “horizontal” service across its myriad products.

Business B offers a solution to Business A’s problem.

By virtue of solving this problem, Business B ends up clearly (co)owning the customer of Business A, albeit with a shifting power dynamic.

For clarity, mapping this to B2B2C as a sales strategy, (1) B is PelotonU, (2) selling a solution to local employers, yielding (3) new students.

Then they offer five key insights for B2B2C solutions, three stood out:

1. B2B2C is easiest to sell when Business A does NOT want to be in the business you are offering. Good news, this is us.
2. Don’t tickle the bear — optimize for early clients first, as keeping track of “what can I do with differently-acquired groups of customers” is unwieldy. We get stuck here, key insight is “serve your early customers”
3. A signed contract is just the beginning of the sale.

That one right there, number three, is particularly crucial for us right now.

One of the reasons for failure in the early stages of B2B2C is that Business A doesn’t sufficiently promote your product. A classic example of this is employee benefits. (Here’s where I got convicted) Signing a large employer is step 1, but is arguably the least important step. What happens next? Your Business B is reliant on Business A promoting this to all employees. Does it get promoted once? Every week? Do you have the right to contact employees who haven’t yet bought? This is arguably the most crucial reason why B2B2C partnerships often do not work — there are two layers of customer success, one for the Business A “client” and one for the end customers you hope to attract.

That —implementation after the contract — is where we’re learning fast and improving. And that’s what this accelerator (and a great team from McCombs who did some good research) is helping us do even better.