From B2C to B2B

Technology Assessment International

From B2C to B2B

Why B2C Companies Should Consider Entering B2B Markets


Why B2B Markets?

So Many B2C Opportunities !!!


Consumer Sales

IMITATION

Consumer Margin

The more successful the company is, the faster it will generate competition that will cap its margin and sales growth.


Let me look for it online…I bet Big Brand has something like this.

The company could invest in brand building only to be preempted by competitors with existing brands and deep pockets.

I saw this really cool product on TV. I can’t remember the brand name.


6.98 billion potential competitors for your consumer product

The large consumer market exposes the product to billions of individuals, virtually guarantying multiple imitators.


The competitor with the best brand building

and distribution wins!

Will it be your company or a stronger competitor?

Big Brand only needs something that approximates your “Cool Product “


The setup for success in B2B markets:

Value to Customer

Price

Margin

High margin is derived from delivering far more value to the customer than he is being charged for. Simple, but not easy.


May I see the head of Maintenance (Selling to end user) ?

Mr. Maintenance, our company sells products that reduce wear and eliminate dynamic seals (benefit selling). Do you have bearings or couplings

that generate more down time than you would like?

Of course I do! Show me what you’ve got.

If you show them to me in your plant, I will be better able to help you. How much down time do you get from those? This equipment must

cost at least $5000 / hr to run.

Closer to $8000 and they take 12 hours to repair every 3 months.

Good that is a 5 year saving of $384,000 for a $2100 coupling. If I price at $21,000 (Value Pricing) and show him the cost comparison, it should be a

no brainer.

Customer Intimacy

90% Margin


Potential competitors: 1,000 people who understand this

Only specialists with intimate knowledge of the industry will recognize how the company delivers value. Few of those exist, even fewer with an entrepreneurial bend and opportunities in any B2B market segment will be insufficient to excite anybody.


B2C versus B2B

B2C

Goal: many purchasers, small purchases

Distribution + Promotion

Simple “pitch”

Generic use

Mass Marketing

B2B

Goal: large accounts, high margin

Direct sale to end user

Sophisticated “value pitch”

Market specific application

Customer intimacy

Technology Assessment InternationalTechnology Assessment International

Why B2B Now?

Sustainable High Margin

Low risk of competition

Exit strategy: Private Equity loves niche B2B businesses with high margin. B2C and B2B can be kept separate for separate exit strategies.

Business

From B2C to B2B