In contrast with the more traditional business-to-consumer model, the
C2B (consumer-to-business) model allows businesses to extract value from
consumers – and vice versa.
In the C2B model, businesses profit from
the willingness of consumers to name their own price or contribute data
or marketing to the company, while consumers profit from flexibility,
direct payment, or free or reduced-price products and services.
Brent Walker, vice president and CMO at C2B Solutions,
says the distinguishing feature of C2B is that customers bring value to
the company. "This could involve consumers co-creating ideas,
product/service concepts and solutions with a company through social
media. C2B can also mean that a business brings consumer insights and
consumer-centric solutions to another business as its primary service or
value-added offering," Walker told Business News Daily.
C2B business models include reverse auctions, in which customers name
the price for a product or service they wish to buy. Another form of C2B
occurs when a consumer provides a business with a fee-based opportunity
to market the business's products on the consumer's blog. For example,
food companies may ask food bloggers to include a new product in a
recipe, and review it for readers of their blogs. YouTube reviews may be
incentivized by free products or direct payment. This could also
include paid advertisement space on the consumer website. Google
Adwords/Adsense has enabled this kind of relationship by simplifying the
process in which bloggers can be paid for ads. Services such as Amazon
Affiliates allow website owners to earn money by linking to a product
for sale on Amazon.
The C2B model has flourished in the Internet age because of ready
access to consumers who are "plugged in" to brands. Where the business
relationship was once strictly one-directional, with companies pushing
services and goods to consumers, the new bi-directional network has
allowed consumers to become their own businesses. Decreases in the cost
of technologies such as video cameras, high-quality printers and Web
development services give consumers access to tools for promotion and
communication that were once limited to large companies. As a result,
both consumers and businesses can benefit from the C2B model.
For the C2B relationship to be fulfilled, the participants must be
clearly defined. The consumer could be any individual who has something
to offer a business, either a service or a good. Examples could be a
blogger, as mentioned before, or a photographer offering stock images to
businesses. The consumer could also be someone answering a poll through
a survey site, or offering job-hiring services by referring someone
through referral hiring sites such as elance.com.
The business in this model could be any company planning to buy goods
or services from individuals either directly or through an intermediary.
An intermediary would connect the business that needs a service or a
good to the mass of individuals, acting as a portal both for buyers and
sellers. The intermediary promotes goods and services through
distribution channels, and gives individuals promotional, logistic and
technical expertise. For example, the intermediary could be a company
looking to fill a job through a referral hiring site, a company seeking
to advertise online through Google Adwords, or a company that needs
individuals to take surveys and provide market research.
Because C2Bs are relatively new, underlying legal issues such as how to
bill and receive money have yet to be fully sorted out. A traditional
firm would pay wages to a limited group of employees, but C2B businesses
could potentially have to process thousands of customer payments.
Fortunately, intermediaries often take care of the financial and legal
aspects of C2B transactions. Services like PayPal and Google Wallet ease
the burden of payment, and Google Adsense pays webmasters by sending
them checks in dollars, incurring shipping fees for Google and currency
conversion fees for international users.
Growing your C2B business requires dedication and a few special skills.
"B2B typically relies on its sales function and account management team
to establish and strengthen customer/client relationships," Walker
said.
According to Walker, companies interested in extending their models to
reach a C2B audience should consider the following marketing tools:
Market research (quantitative surveys, qualitative interviews, segmentation).
Consumer feedback channels, such as rating and reviews, customer service lines, avenues for suggestions/comments.
Social media, such as online consumer user communities, Facebook pages, Twitter followings, etc.
at conventions and trade conferences, digital marketing (online
presence, SEO, email outreach) and other traditional awareness efforts,"
Walker said.
C2B is a new and growing segment of the business market that can
function as a company's entire business model, or that can augment an
already successful venture. As in all models, your company's success
will depend on your thorough understanding of the marketplace and your
willingness to pursue new technologies that make reaching your customers
easier than ever.
"Pursuing a C2B approach is a strategic choice and requires a
commitment to involving the consumer in business decisions. This takes
extra effort, resources and discipline to avoid being internally
focused, but it is critical for a business to succeed
in a
consumer-driven marketplace," Walker said.
Elaine J. Hom also contributed to this article.
What is C2B?
Hello, my name is Jack Sparrow. I'm a 50 year old self-employed Pirate from the Caribbean.
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