B2B or not B2B?

September 16th, 2009 by hoha Leave a reply »

To be or not to be...pilgrim

Mr. John Wayne, not a trained Shakespearean actor, said in one of his movies (McClintock!) that “…everyone works for somebody.” At the time this line was delivered he was playing the part of a rich cattle baron. He was lecturing to one of his hands who didn’t think too much of himself. McClintock (not to be confused with Macbeth) pointed out that even the cattle boss worked for the American people.

So who is your customer? Frequently customers are lumped into groups according to common characteristics from a high-level classification of businesses, governments, and consumers down to very specific demographics like a single mother of 3, ages 31-35, college education, geographically located in such and such state, earns so much, etc.

All this information is used to determine how to get customers to buy more. Whether that is by having a recognizable brand that is more visible, or catering to customer’s demands for faster or more convenient service, or even creating something entirely new that customers are sure to want; all of it is to drive up revenues, which, if they’ve run their business right, will result in a profit. (Although some will operate at a loss if it means there’s a chance at a sustainable profit.) Profit is the life blood of an organization that allows for further success. Even non-profits have to cover their costs somehow.

If people don’t want what you are offering, you won’t be in business very long. It is the secret and power of consumerism, though customers often don’t realize that this power is theirs. The world in which we live is largely shaped by businesses through various experiences or services they produce. Businesses exist because people buy from them. So the reverse is the overlooked truth. If people don’t buy from them they will not exist and if they don’t exist then our culture and society won’t be influenced by them.

This realization has changed over time as more and more products proliferate and fill the marketplace. People rely on reviews and opinions of others to make choices about what is going to best meet their needs. Trust and information has become a hot commodity.

Consider this tidbit from an article in The New York Times last year, “According to Forrester Research, 52 percent of people who shop online say they do their product research on Amazon.” Over half of all sales over the internet (US ecommerce industry is estimated $130B/year) are made after checking Amazon.com Customer Reviews and this is just one website, not to mention all the other consumer review sites that are dedicated to specific categories of products. More than $60B is determined by what customers and others say about a product or service.

Even in the brick and mortar stores, word of mouth is still the most powerful prompt for potential customers to become actual ones. Businesses have known the power of a positive endorsement for awhile and frequently make use of it by the use of a shill. The term comes from when a carnival or traveling salesman would plant individuals within a crowd during a sales presentation in order to influence the mob of people into a positive predisposition.  The shill would often be the first to buy the product or perhaps even demonstrate its wonderful effects to encourage those who were hesitant in making a purchase.

Online sites like Amazon have a team dedicated to detecting and minimizing shills in order to maintain their credibility as a trusted source. That trust is what drives customer loyalty and more importantly repeat business.

Just a few clicks away...

Just a few clicks away...

With that in mind, I’d like to propose the growth of an often overlooked kind of business: a consumer to business approach or C2B. Businesses are dying to get your purchasing history and trends. Most online businesses thrive on this fact. From targeted Google Ads to individual banner advertising on a specific blog (anyone interested in sponsoring us feel free to let us know) to collecting transaction histories (Amazon, American express, etc.). They all have some level of interest in what you want or do so that when you do decide to vote with your money you pick them.

Case in point: Mint.com, a free site that provides personal finance software, was purchased by Intuit, maker of QuickBooks and Quicken, for over 170 million dollars with no plans to change the free component of the site. Why would they spend all that money to get something that won’t make them direct money? One of the reasons is that Mint.com has a plethora of consumer data just waiting to be mined and turned into targeted marketing for the profit making products.

So why not sell your information directly or agree to be a spokesperson for a product or service you already love?  Tout your 400+ Twitter followers as a distribution channel of information and influence or make your Facebook friends your sales force. Perhaps you could simply be a mini-market research firm sending out surveys to your circle of influence about products or services and then sell the data to the highest bidder or just share it with everyone that participated and build your own credibility among “friendly” consumers.

Another approach is to reverse the idea of buying in bulk; band together with others that want to buy the same thing as you for a group discount. Basically, it allows you, the customer, to offer to purchase a product at a price you set and then your friends bid on the same product. If the company gets enough people that it becomes worth it to them then the company allows that group to purchase the item at the lowest bid made.

Maybe soon...

Maybe soon...

Group-buying was something that was explored pre-dot com bubble burst; here’s a nice article of what happened and why they struggled. They weren’t sustainable because of the amount of time it took to get enough people to merit a significant enough discount. And many times you could find it for cheaper as an individual consumer if you took the time or chances with an eBay auction. Though there has been some success in China and here in the states with things like Groupon. Have things changed with the advent of Twitter and Facebook? Is it time for a good idea to hit its stride? How could it work now?

Remember everyone works for someone. Why not have businesses work for you—or at least with you.

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