TL;DR: B2B2C companies (Alphabet, Atom8, BackOrder…) aim to maximize their customer outreach through a middleman distribution company. B2C2B companies (Slack, Notion, Salesforce…) aim to sell products to another business by targeting a middleman user (employees, users…). Each model brings unique benefits to the middleman actor and to your business interests.
Two of the most popular and profitable business models in the eCommerce space are B2B2C and B2C2B. It’s essential for every business owner to understand the key differences between these two models. Here are the definitions and insights into distinguishing B2B2C and B2C2B.
How Can You Distinguish B2B2C and B2C2B?
What is B2B2C
A company that follows a B2B2C business model will go through another business to access the customers. However, the customers are still aware that the products they buy come from the initial brand instead of the middleman. This kind of business model is a hybrid.
The first company (A) tries to get a deal with another business (B0, based on the rules and approaches of the B2B model. A and B make a deal to determine each party’s business interests. Ultimately, B agrees to bring customers (C) to A, while A returns the favor with incentives.
Some common incentives for the middleman business within a B2B2C model are:
- Marketing benefits: Brand awareness and higher outreach
- Sales benefits: Commissions based on quantity and quality of referred end-users
Let’s consider Spotify, everyone’s favorite music streamer (except Apple Inc.) Spotify wants many people to use its apps, but not everyone is interested in only having a music player. So, Spotify partnered up with a ticket distribution app, like Ticketmaster, to allow users to book seats to shows by artists. Now, people who might want to see the next Bruce Springsteen show will be incentivized to use Spotify to listen to Bruce’s music and receive discounts when they order tickets on Ticketmaster through Spotify.
The users who might not have gone to Spotify as a music player app will reconsider their position based on this new partnership. Here, Spotify is the first business (selling business A); Ticketmaster is the second B (distribution channel B), and Spotify’s target customers are C (customer). That’s the formula of the B2B2C business model in this case.
What is B2C2B
B2C2B defines a special approach to the B2B business model. A company that wants to sell products to another company starts to attract and sell to the employees of their target company. Then, the internal motivation and effect will motivate the aimed business inside out and convince them to buy products. The selling business plays the B1 role; the employees are customers, and the targeted company is B2; that is the B2C2B business model diagram.
A remarkable example of the B2C2B business model is Linkedin. This platform provides a global network to connect employees from all over the world. It offers various functions to help employees find their opportunities, socialize with others in different enterprises and build brand awareness in the employees’ society. But LinkedIn’s main goal doesn’t stop at user acquisition. The platform wants enterprises to buy LinkedIn Premium, spend money on ads, and use the service as their primary employment platform.
There are a lot of modern companies that are following the B2C2B model, including Slack, DropBox, Pipedrive, etc. These services provide a lot of incentives for users to inform their businesses about the benefits of a potential B2B sale, like scaling and reduced pricing, customizable features, and integration.
Have you had a different view of B2B2C and B2C2B? We hope you have. We hope you can decide on your company’s most suitable business model and develop outstanding strategies to dominate your target market.
If you want to develop your business within the eCommerce space, we can help advise you on crucial subjects like B2B2C or B2C2B business. Reach out to our experts and see your business model become a reality.