Re-imagining Startup India: The B2B2C Way
The hybrid approach apt for early sustainability and scale for new startups and companies alike.
A 2016 report issued by the IBM Institute for Business Value and Oxford Economics indicated that 90 percent of Indian startups fail within five years. Lack of innovation was cited as the primary reason for failing startups. The other reason could be - are these startups adapting the business models that are truly needed by the market?
People often throw around the term business model in discussing the growth, scalability, and success of startups. A business model explains which of the consumer pains your startup chooses to relieve? why your solution works better than competing ones?
Which one works best and why? How do you know if your startup has the right one? It is imperative to know who drives a significant demand for the product.
Digital, mobile, social and cloud are radically changing the nature of customer interactions the outcome of which is felt most profoundly at the business model. Hence, companies across sectors - whether servicing to businesses (B2B) or to end consumers (B2B) - are going with a revived and hybrid business approach to have a successful customer acquisition and retention.
Let’s look at one of the fastest growing sectors i.e. e-commerce. The leading e-commerce giants which have developed a more direct connection with the end consumers are now providing early visibility to many small, emerging microbrands/micro businesses across the spectrum - in food & beverage, health, and beauty, wellness, home furnishings, fashion, apparel and accessories, even pet food. These new brands have risen from the grassroots levels, developed by new-age entrepreneurs with passion and irreplaceable local insights. Not only do the e-commerce companies expand their inventory and gain new customers, but the entrepreneurs also get a wider platform from which they reach to newer customers.
Take the case of the highly assumed B2B Financial Services industry, for example - Insurance providers rely heavily on insurance agents and financial advisors to sell its products. However, at the same time, they are using digital channels like an online insurance aggregating platform to market the brand to reach out to the end consumer directly. This way, the brand builds loyalty from both end user (B2C) and financial intermediaries (B2B) while providing incredible value to both.
The changing relationships between buyers and sellers and the consumerization of tech have led to new expectations and behaviors. The idea of focusing on the end customer is no more restricted to one business model. In fact, it is the collaboration of both B2C and B2B.
Most of the new-age startups base their business strategy on their clients. But it’s not enough to focus only on the experience for clients. They need to understand the dynamics of both the end user and enterprises.
A growing trend of switching to the evolved business model i.e. B2B2C is connected with the fact that Customer Experience plays a key role in today’s business world. It’s no longer only about objective product characteristics or the quality-to-price ratio, now it’s also about subjective, emotional factors related to the customer’s feelings during the customer journey. We even choose our Local Kirana shop basis the customer service he provides.
Especially for the early-age startups, finding customers quickly (particularly subscribed customers) has become an overwhelming challenge. At the start, startups could mine social media to create customer relationships. But competition from established players has made their strategy more challenging. The new method of securing potential customers will rely on the strategy of a collaborative approach of B2B and B2C, i.e.~~ B2B2C.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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