Sales & Marketing

B2C and B2B – Is There a Clear Distinction Anymore?

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As a CEO I run into a lot of people who ask me about my company, and of course I have a formal pitch. I run a lean startup that builds fast and scalable, custom-tailored mobile applications for the enterprise. The responses I get tell me a lot about my audience and their overall view of the value of mobile apps being deployed in the enterprise. Most importantly, however, the responses often highlight when there’s a sea change afoot in our industry.

Two recent yet wildly different responses got me thinking about the changes facing the IT industry today. “Oh, you’re B2B, I don’t need that kind of thing” and “Cool, so really any individual trying to ‘crush it’ needs these apps.” How did one person hear B2B so explicitly and one person hear essentially B2C as the message? I came upon what seems obvious now; B2B and B2C are no longer clear distinctions, especially when it comes to sales.

Historically, Business-to-Business (B2B) has meant “a transaction that occurs between two companies” or a company that serves other companies. Business-to-Consumer (B2C) as you might imagine has meant “a transaction that occurs between a company and a consumer” or a company that offers up consumer services. But what were the real differences?

B2C sales were historically of the same product for all, deals were executed faster as there were fewer cooks in the kitchen, deployments could be immediate (think: games and social networking apps), the sheer number of purchasers was larger given that the price tag was usually lower.

B2B sales on the flip side were often custom builds, slower deals to close, with many people having a vote in the final decision, lengthy deployment times (think: months or years), a much smaller lead pool and a much higher price tag.

Ask yourself if these defining characteristics hold true anymore. I did and found that they really don’t. Here’s why:

Speed is important to everyone these days

You’re seeing customer attrition from some B2B companies that can’t innovate and deploy quickly enough just as you’re seeing consumers shut or delete apps that take too long to load. Companies and people want a competitive edge now, not in six months — industries are moving fast these days!

Costs for mobile solutions are leveling out

Users can quickly deploy cost-effective products. Companies don’t need to charge a $50K set-up fee and charge a company per app downloaded (a la the old “seat” model). The administrative set- up of apps is so intuitive, especially to prosumers that set-up can be self-directed in many cases and a person can purchase their own app and bill a company back for it at say $9.99/month without raising red flags. B2B mark-ups are rarer in the mobile app market than ever before and mobile-first builds are increasingly common a la Kayak.

Departmental decision makers exist and can execute a purchase fast

With P&L responsibility comes power, and a CMO or VP of sales is quick to experiment these days just as a consumer will make a $1.99 app purchase for a popular tool without blinking. If it proves not to work, delete it and chock it up to a learning experience — see #2 regarding costs; it’s not the end of the world if one doesn’t pan out and, who knows, someday you may even see a rebate for deleted apps leading to more trials.

With mobile apps, it’s every person for himself

What I mean by this is that the B2B and B2C lead pools in many cases have become one and the same with the BYOD and CoIT trends taking hold. The job market is a competitive one and everyone’s looking for a competitive edge personally and professionally — regardless of whether it’s in the form of an app getting them to a meeting faster (Uber) or prepping them with a prospect’s job history (LinkedIn) before a meeting. If a salesperson finds an app that lets him close just one more deal than the next person (whether on his team or at another company) he wins – even if he has to pay for the app himself. A solution may benefit the enterprise’s bottom line but consumers are in the lead pool at the same time — the app’s appeal just has to transcend both.

Successful apps have a similar look and feel

People are well primed for apps in their workflows as they’re playing with a lot of them in their free time these days anyways. Whether B2B or B2C, people want intuitive, clean, fast applications. Custom applications for the enterprise are no longer synonymous with slow, months-long development cycles. Efficient customized deployments on top of strong application frameworks are great for getting consumer-inspired apps into the hands of sales people quickly. Less time-consuming custom builds also allow app developers to innovate and create new apps faster. It’s a win-win for everyone and lowers the barrier to entry for those less mobile-savvy employees.

The bottom line is that “B2B” and “B2C” are becoming dated buckets in which to define apps and, in some cases, whole companies as well. Too many tools today are simply awesome productivity apps and some companies likely never envisioned their app for real business use (I’m looking at you, TaxiMagic). As I swipe through my iPhone I can count on one hand the number of apps that are purely for personal use or strictly business. I bet if you take a look at your own devices you’ll see the same trend emerge over time. I’m hopeful that in the near future I, and others, get more open-minded responses accordingly — maybe a “How can your apps help me and my business?” —  as I’m sure they can.

Chris O’Connor is co-founder and CEO at Taptera. A builder at heart, Chris enjoys creating teams, systems and companies. He is passionate about improving employees’ relationships with their software and had 15 years’ experience bringing innovative IT solutions to Fortune 500 companies. During his eight-year tenure at Genentech, Inc., Chris held various senior roles including associate director of cloud and mobile solutions and principal systems architect. For more info please contact: [email protected] and follow along on Twitter @Taptera.

Comments

By Emily McHugh

This article covers some interesting territory. I agree that expectations are higher across channels, but at the same time B2B vs B2C depends on the type of business. A company that sells products direct to customers online or in its own store and at the same time sells to other stores or retailers, are definitely catering to two distinct buckets- retail vs wholesale. Volume and price are key drivers and the unique characteristics of each needs to be clearly understood. The key is to use the right tools appropriately to achieve success in each area.

By Chuck DeVita

I absolutely believe there are significant differences between B2B and B2C. I go further in defining three categories for B2B: 1) Enterprise Solutions which change the way work is done across the enterprise, 2) Departmental Products which often change the way work is done at the department level (often sold in a “land & expand” model), and 3) Point Products that are individuals in businesses (and may be sold to pro-sumers). In the cases of (1) and (2), it is important to get the sponsorship of an executive that has organizational authority and political clout to allocate resources and drive the methodology changes.
When suppliers plan to succeed at the enterprise level using a viral model with a Point Product, this approach requires very significant investor capital, ala salesforce.com and others.

By Chris O'Connor

Thanks Emily and Chuck for your comments and thoughts. I certainly believe that there are unique B2B and B2C types of businesses – I was more so addressing the types of mobile applications that we’re seeing people and business adopt and how the distinction of B2C and B2B applications appears to be blurring with the rise of prosumers and the growing familiarity with mobile application interfaces. I certainly wasn’t trying to comment on the business distinction itself no longer holding true as we certainly have both B2B and B2C businesses that we work with ourselves at Taptera.

That said, Chuck, I find your comment particularly interesting. To your point, we are seeing a tremendous amount of growth in the viral model with a Point Product, however, it’s largely done in tandem with (1) and (2) as you said. Not only are there multiple B2B categories but a multi-prong approach, if one can commit to it, can be very successful. Point Solutions are often very research-oriented but as with document and media management tools we’ve seen them start in one incarnation and then grow and translate into the enterprise with great success.

Regarding executive sponsorship (with budget allocation power), I certainly agree. Internal mobile applications (or really any company-wide IT deployment) need to have both budget and prioritization but what we’re seeing is an acceleration of the “land and expand” model whereby a sales cycle more common in the B2C market is now possible at the B2B level given the seeming permanence of mobility in the enterprise across device types.

I will also add that there’s certainly a gray area in terms of B2C application creators and their initial go-to-market strategies. With Taptera we are focused on both enterprise and point solutions and, of course, that impacts our sales team, their approach and success. While the two distinct types of applications are becoming more similar, the biggest enterprise deals still take longer – not necessarily from a technical deployment standpoint but from an internal buy-in and allocation standpoint. In some cases the pace of business decisions has not yet caught up with the pace of innovation.

What I’m seeing is that there are some tools that have been created for consumers that have become enterprise tools without much add-on work. It’s happened naturally in the case of some productivity tools. In other cases I’m seeing consumer products that have “gone enterprise” with an added services layer with their product as a base layer for serving business needs. In other cases, like ours, we’ve taken a multi-prong strategy to empower both prosumers and passionate executives who want to help their businesses gain a competitive edge with the power of strategic mobile solutions. Thank you again for your comments – keep them coming!

By Chuck DeVita

Chris,

I suggest that “we are focused on both enterprise and point solutions” , as a start up, means you are not focused.
We have yet to see startups that are successful doing both. The key reason, IMO, is the responsibility for success in each case. In the enterprise case, the responsibility for success rests largely with the supplier. This leads one to implement significant BPR and methodology consulting along with the product. in the point product case, the responsibility for success rests largely with the client/customer. The requirement here is a very good “out-of-the-box” experience (very good ease of learning and ease of use without direct people support). As a startup, you don’t have the bandwidth to do both well unless you can raise enough capital to create two divisions at a very early stage.

By Chris O'Connor

Chuck – I believe one can serve enterprise and point solution requirements today with one team and at a startup’s scale. As I talked about above, the different approaches certainly have their unique qualities but I don’t think that they require separate divisions and doing so could actually do more harm than good. Perhaps it’s a function of the agility of our team or the startup mentality that’s a part of our culture, but we find that client/customers and enterprises both require great out of the box experiences (it allows them to believe in the power of a product off the bat) that they can get consulting and customization alongside as well (others are taking this approach as well like RoamBI, Evernote, ScrollMotion, etc.). That’s not to say that one group or another might stop with the out of the box solution or one will demand a totally unique feature set – we’ll do that work for the people interested in it – but I think that some startups that create too many divisions and don’t look at their products holistically are less focused than ones that, at a basic level, look at customers as customers whether it’s a single salesperson or a whole salesforce (obviously in this example I’m speaking of companies that are selling into sales). Evangelists are everywhere and so it seems a greater risk to me not to try to superserve all groups, which we’ve been doing for over a year now, and identify the needs our applications can serve both from the top and the bottom. It’s a new “new economy.”

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