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If you could do both B-B or B-C which would you choose or would you consider doing both?

Developing a software that if marketing B-B would allow more robust channels but longer sales cycle or could go B-C which is a shorter sales cycle but possibly higher customer acquisition cost... Would you do one or the other, or both? How would you determine pricing structure and price point if you do both so no one feels cheated?
(Maybe this is 2 separate questions)

24 Replies

Rob Gropper
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Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
I would go with what i know. For me that's B2B (enterprise). For my current project the model is more of a hybrid B2B2C - consumer is the end-user, but we market primarily to medium to large businesses. We designed our product and many specific features and processes with the intention of selling and marketing via businesses rather than directly to consumers simply because it's what we know best, it's more predictable and reaching consumers directly is expensive. Our end-user can purchase directly from us and they see the same cost regardless (pretty typical), but businesses see a significant share of revenue if they drive the business. Managing channel conflict is hard - ask companies like Microsoft, but for us the model seems to work - we've not launched yet, but thus far our enterprise customers can find nothing to complain about.
Todd McMurtrey
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Todd McMurtrey Entrepreneur
Global Marketing Operations Manager | Digital Marketing at Medtronic
Interesting question.

My immediate question is: Who is the product better suited for?

A B2B product serves a different need (at least in nuance) than a consumer product. If you are approaching it from the point-of-view of "which is the better market" then I'd suggest ensuring that the product reallyreallyfits the need of that audience.

Reading between the lines, it seems you want to do both. This is fine so long as you hit the unique needs of each. From a pricing standpoint, I'd do something like this (not knowing anything about your product, and probably making several bad assumptions):

  1. Consumer Demo Account: Free
    • 90 day trial. Some features missing
  2. Consumer Account Cost: X
  3. Corporate Account Cost: 3X (or some multiple)
    • Comes with multiple logins
    • Comes with extra features (reporting, collaboration, or whatever)
    • Additional logins can be acquired for .75X (or at some discount)
The benefit to this approach is it may (depending on your software and what it does) allow employees to use and experiment with the software on their own before signing up as a business (or to find it on their own before promoting it to their business).

I think Trello.com might be a good model here, as would many others.

Other items to consider:
  • Which are you setup to do? Do you have a sales team? Do you have a digital/traditional marketing team?
  • What's the lifetime value of each audience, both in terms of revenue and upgrades, but also in terms of softer values like referrals, success stories, etc?
  • What's the realistic first-year value of each audience and how much does that matter for cash flow?
Ela Emami
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Ela Emami Advisor
Founder/CEO of care2manage
I guess it would be helpful to say that the beneficiary is the consumer. Our utilization of the B-B model would have some benefit for the B but only as it relates to how well we serve their consumers. (if that makes sense). Basically it is a platform for caregivers to organize healthcare info and get connected to geriatric care coordinators local to them. It's a blend of technology and concierge style service.
Our options are either direct to consumer (expensive) or via HR benefits/Ins companies (long sales cycle). I'm was not intentionally hiding my business, I wanted the thread to apply to a more than just my business.
Jerome Pineau
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Jerome Pineau Advisor
Digital Transformation Consultant
Are those caregivers regulated in any way by state or federal?
Todd McMurtrey
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Todd McMurtrey Entrepreneur
Global Marketing Operations Manager | Digital Marketing at Medtronic
@Ela

Yeah, that's a bit different than what I had in mind when I wrote my response above. That's what I get for making assumptions. :)
Rob Gropper
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Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
....as Todd points out your product has to solve a problem for the user whether that user is a corporate user or a consumer user. Your second post indicates that businesses might only benefit tangentially. If that is the case then i would take a hard look at how you might improve your benefit to B's and if you can't then you've answered your question. Selling to Bs is hard and time consuming even when you have a clear value proposition. Without a clear value proposition you shouldn't waste your time trying to 'sell' to B's and your second question about pricing is then also answered. There might be reasons for some marketing partnerships with B's, but don't expect revenue from them if you can't clearly articulate a value proposition that will cause them to write POs. Early on if a channel doesn't generate revenue then unless you are well funded don't bother - revenue is king. Our product solves a problem for both B's and C's and we designed it that way. Early on our product was strictly solving a problem for consumers. We had 3 issues we needed to solve internally or we likely would have bagged the whole idea: 1) ours is a 2-sided market so how do we build 'critical mass' ?, 2) we don't have expertise in consumer marketing so do we really want to sell direct to consumers? and 3) we don't want to spend time early on trying to raise funding so how do we generate revenue from day 1? We solved all 3 issues by specifically brainstorming a B2B distribution model. That opened a lot of doors. We planned to launch with 4 enterprise customers and we have 8 signed up currently... waiting for us to finish development... which by startup standards sounds like a good problem to have. Selling to B's is not only a longer sales cycle, but they also typically demand a more robust product and support. This adds to product complexity, time, cost, etc. so there are trade-offs to consider.
Ela Emami
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Ela Emami Advisor
Founder/CEO of care2manage
@Jerome The caregivers are family caregivers as in someone taking care of a family member. The professional care coordinator.... I wish it was a quick yes or no answer but it isn't. We will have a vetting and certification/training program in place. We will likely start with part time, licensed SW that are already practicing. Why?

Jerome Pineau
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Jerome Pineau Advisor
Digital Transformation Consultant
well if they were officially vetted, then you could potentially work with the vetting agency. Is your platform deployed via smartphone app?
Ela Emami
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Ela Emami Advisor
Founder/CEO of care2manage
It is accessible on any device but it is not appy it's more platformy. The long term vision is for the family caregivers to access their loved one's healthcare information and then be able to better care for their loved one using 1. the tools we offer them (assessments, ...) 2. the people we put them in touch with.
One approach was to offer this as a marketing tool for geriatric care coordinators. (That's phaseIII) Phase I which will be in beta soon is not quite as robust but still functional enough to set us up for our first round of funding.
Jerome Pineau
0
0
Jerome Pineau Advisor
Digital Transformation Consultant
how do you deal with privacy issues?
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