B2B2C, or business-to-business-to-consumer, is when two companies partner to reach consumers. The name is not known widely. However, the practice goes out practically a lot before our time! B2B2C faces the inevitable digital change and can respond with strong loyalty programs. In this blog post, we will discuss what B2B2C is, its examples and how you can improve your business with strategic tips.
What is B2B2C?
In a B2B2C model, a business provides services to another business, which then integrates those services into its own offerings and sells them to customers. In this scenario, the initial business engages in B2B transactions, while the intermediary business acts as a facilitator, enabling the distribution of goods or services from the original provider to the ultimate consumers.
“For B2B2C’s Compound annual growth rate is 6.7% from 2022 - 2030”
This approach allows businesses to leverage partnerships and distribution channels to reach a broader consumer base. It often involves collaboration between manufacturers, wholesalers, distributors, retailers, and other entities along the supply chain to deliver products or services to the end customer.
B2B2C models enable businesses to;
- Expand their market reach
- Enhance customer engagement
- Leverage intermediary relationships
Why are B2B2C’s Worth Investing in?
Investing in B2B2C is essential for manufacturers as they adapt to the shifting landscape of consumer behaviour, where the increasing prevalence of online shopping and the demand for remote service support are prominent trends.
This transformation is fueled by the emergence of tech-savvy B2B buyers and end-consumers who seek seamless, efficient interactions with manufacturers, emphasizing the need for businesses to embrace innovative approaches to reach and engage with their target audience effectively.
An increasing number of industries are embracing the B2B2C model. The retail and tech industry leads the B2B2C market. Manufacturing is also highly regarded, while logistics facilitate B2B2C transactions by providing businesses with convenient access to consumers.
Statista reports that e-commerce transactions constituted 18% of total global retail sales. B2B2C strategies offer manufacturers a means to strategize demand cycles effectively, mitigating surplus inventory risks.
Examples of B2B2C Business Models
E-commerce is the most commonly used B2B2C practice. Platforms like Amazon allow businesses to sell their products online, reaching a wider audience. With Amazon, businesses can purchase products from manufacturers or wholesalers (B2B) and then sell them to consumers on Amazon's marketplace (B2C). Amazon serves as the intermediary—the second "B" mentioned earlier—facilitating transactions between manufacturers (the B2B part) and consumers (B2C).
Another good and not-so-common practice is partnerships through apps. Healthcare providers partner with fitness apps to offer personalized wellness programs to their patients. The healthcare provider (B2B), usually a dietitian, personal trainer or psychologist, collaborates with the fitness app (B2C) to deliver tailored exercise and nutrition plans to individual patients, promoting preventive healthcare and patient engagement.
The last example of B2B2C rarely crosses anyone’s mind as a B2B2C. Imagine a toy manufacturer that produces popular characters and toys, such as Barbie creator Ruth Handler, partnering with a theme park, cafe or restaurant. Theme parks to create exclusive toy sets and merchandise, cafes to make Barbie-themed desserts and coffees and restaurants to make Barbie-themed food exclusively sold in that specific spot. This partnership allows the toy manufacturer to reach consumers directly through the theme park's visitor base, enhancing the overall experience for theme park attendees while increasing toy sales.
B2B2C Loyalty Programs: Answering Digital Age’s Questions Accordingly
In today’s digital-first world, the concept of loyalty has evolved far beyond traditional customer-business relationships. As businesses increasingly operate within intricate ecosystems, the B2B2C loyalty model—a blend of Business-to-Business-to-Consumer relationships—has gained traction. This approach allows businesses to not only engage their immediate partners (other businesses) but also the end consumers in a meaningful, scalable way.
What is a B2B2C Loyalty Program?
A B2B2C loyalty program is a dual-layered strategy in which a business partners with another organization to offer loyalty benefits to their mutual end customers. Instead of focusing on individual consumers (as in traditional B2C programs) or other businesses (B2B programs), this hybrid model aims to create value for both business partners and consumers, building a stronger, integrated ecosystem of engagement and rewards.
For example, a brand like Algida (B2B) might partner with local convenience stores (B2C) to run a loyalty program that rewards customers for purchasing their products. The store benefits from increased foot traffic, while Algida benefits from expanded product visibility. The end consumers enjoy rewards like discounts or complimentary products, creating a win-win scenario.
Why is B2B2C Loyalty So Relevant Today?
In the digital age, the competitive landscape has dramatically shifted. Customers are overwhelmed with options and expect personalized experiences, quick rewards, and seamless transactions. A B2B2C loyalty program provides an innovative response to these demands by leveraging technology and data analytics to build more relevant, timely, and integrated consumer experiences.
The key reasons why B2B2C loyalty programs thrive in the digital era include:
Data-Driven Insights
With integrated loyalty platforms, businesses can capture first- and zero-party data, providing rich insights into consumer behavior and preferences across multiple touchpoints.
Cross-Benefits for All Stakeholders
In a B2B2C model, both businesses involved benefit from the loyalty initiative. For example, manufacturers can reach more customers via their distribution network, while retailers increase sales by offering compelling rewards.
Scalability
The digital infrastructure powering B2B2C programs makes them easy to scale. Mobile apps, push notifications, and real-time tracking systems enable businesses to engage a wide customer base and reward them instantly, without geographical limitations.
Automation and Seamless Transactions:
Automated systems eliminate manual processes. Transactions, reward redemptions, and customer communications are handled digitally, making the program more efficient for businesses and smoother for customers.
How B2B2C Loyalty Programs Answer the Challenges of the Digital Age
B2B2C loyalty programs create unified customer journeys, meeting consumers' demand for frictionless experiences whether they shop in-store or online. By tracking customer activity and rewarding behaviour across various platforms, these programs offer seamless omnichannel engagement, blending physical and digital touchpoints into one cohesive experience.
With AI and machine learning, businesses can deliver personalized rewards tailored to individual preferences, enhancing emotional connections and fostering long-term loyalty. Collaborative partnerships drive innovation in these programs, allowing companies to offer unique promotions and more excellent value to consumers.
Additionally, real-time technological integration connects loyalty platforms with CRM tools, POS systems, and inventory software, enabling instant rewards, personalized offers, and continuous customer engagement through instant feedback loops.
Loyalty programs vary significantly in their approach. B2B and B2C models are fundamentally different, and their intersection, B2B2C, has its unique characteristics. Let’s explore the key differences between them.
How Do Loyalty Programs Differ: B2B vs B2C vs B2B2C
B2B loyalty programs primarily target businesses, offering rewards and incentives based on volume purchases and business relationships. Communication is directed towards business partners to strengthen long-term ties. In contrast, B2C loyalty programs engage individual consumers directly, providing discounts, reward points, and personalized offers to build brand loyalty and enhance customer relationships.
B2B2C loyalty programs target both businesses and consumers with tailored hybrid rewards. Communication is directed to both segments, while collaborative program management ensures alignment with their interests. Data utilization integrates insights from both B2B and B2C contexts for strategic decision-making.
Here is a table showing the clear differences between B2B, B2C and B2B2C within the context of loyalty programs.
Conclusion
B2B2Cs are important business models that are growing rapidly and are all around us! From supply chain optimization to personalized consumer experiences, B2B2C frameworks offer many opportunities for businesses to innovate and thrive in today's digital age.
Strategic planning that answers both B2B and B2C’s concerns is a must. Ideally, the implementation of a loyalty program is crucial. For tailored insights on implementing a loyalty program that addresses both B2B and B2C needs, reach out to our Kaizen experts. Let’s take your business to the next level together!
