Is There A B2B Play in Your Company's or Client's Future?

Is There A B2B Play in Your Company's or Client's Future?

Gary Slack | September 28, 2017

Many initially consumer platforms eventually find their way to b2b extensions, but do they do so soon enough?

When Pierre Omidyar founded eBayTM in 1996, the rudimentary online buying platform featured decidedly consumer items, among them (as the legend goes) Pez® dispensers.

It was a full five years later, when eBay execs saw business items being listed and bought on eBay, that they realized there was a business play. What they noticed initially was IT equipment being listed and bought mostly by small businesses. To their surprise, the volume was close to $1 billion.

Naturally, since $1 billion is a pretty good motivator, they immediately asked themselves, "Are there other kinds of businesses using the platform, and for what?" They looked and saw restaurateurs active on the platform, too. No surprise there, with the high fail rate of restaurants but the 30-year life of much restaurant equipment.

With the help of ads like this, restaurant equipment became one of the best-selling product categories on eBay® Business, eBay’s b2b play.

Then they asked, "Could we dramatically goose business buying on eBay by hiring a product and category management team, creating a b2b marketing budget and hiring a b2b marketing agency to help out?"

They tried it, and eBay Business was born. Jordan Glazier, a former BCG and GATX exec, brilliantly led the b2b marketing team, and he and Gary Briggs, now the CMO of Facebook and then eBay's vice president of marketing, hired us as the b2b agency. A few years later, the eBay ROI Council calculated that our collaborative work with Jordan and his team had attracted 1 million new small business buyers to eBay. Today, business buying on eBay is said to represent 10 to 15% of gross merchandise sales.

eBay Business started a land rush to many more b2b plays

There no doubt are plenty of pre-eBay examples of b2c sellers identifying and pursuing b2b plays, but it seems to us that the eBay Business success story planted a seed in the business plans of many other initially consumer-focused online platforms.

Orbitz®, the online travel site, launched (with our help) Orbitz for Business® less than five years after the consumer site launched.

In the intervening years, we've seen numerous other b2b plays launched even more quickly, including:

On the quasi-comedic side, there is also SnoozesterTM for Business. Snoozester started out as a totally consumer-focused online platform to arrange wake-up calls for yourself. But a year or so ago, the company announced Snoozester for Business and is busy marketing it as a corporate perk to companies for their business travelers.

As you can see from the above list, the b2b extension nomenclature most often entails the words "for business" or just "business.” The use of "at work" or "work" or even "professional" is far less common.

While TeslaTM hasn't formed a pure-play b2b unit, it will be introducing a pickup, and it has announced it is getting into the semi-electric truck business. Can Tesla for Business be far behind?

Another example is Choice Hotels®, a five-tier, 6,500-property hotel chain (and a Slack client) that after years of being known mainly as a leisure hotel chain is now aggressively marketing itself to corporate travel managers and business travelers.

Moving the other way—from b2b to b2c

Switching gears, there also are companies—but far fewer of them—that start as b2b businesses but along the way find b2c or consumer plays.

One is the inventive 3M, officially known as Minnesota Mining and Manufacturing. When 3M invented Post It® notes in 1977, the company became a consumer brand, too. That has served 3M's businesses well over the years, creating a halo effect of sorts with business buyers.

A current-day example of a b2b play eventually planning to go b2c is LISATM app, a start-up b2b platform for a wide array of personal care professionals (e.g., hair stylists, manicurists, masseuses) to break the bonds of salons and take their services directly to people in their places of work—some in permanent installations, a la Shoe Drop, and in other cases pop-up spaces.

The very entrepreneurial LISA app co-founder, Rob Richmond, has his sights set on a consumer play as his second act once the b2b side, involving deals with building managements and leasing agents, gets well under way. The consumer angle: having these same professionals show up in people’s homes, in some cases making their services even more convenient for their customers than at work.

For the halo effect alone, which can help protect b2b margins, we expect to see more traditional b2b marketers seeking consumer plays in the future. We have actually heard of a commercial light fixture manufacturer that is launching a consumer product with this purpose in mind. The feeling is, if b2b buyers get to know the company’s name in a consumer context, it might make them more likely to buy while at work.

In a way, finding a b2b play—or a b2c play if you're a b2b marketer—is fundamentally the same as identifying a new sales channel, something companies do all the time. But, rather than waiting half a decade, as eBay did, to get a b2b play going, put it in your thinking caps from day one.

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