With today’s omni-channel commerce landscape, B2C companies are often also B2B, and vice versa. This crossover in business models is a fruitful strategy, as it allows for increased revenue streams and marketing opportunities. But in today’s competitive market, how does a company successfully implement a B2B model that will leverage the multiplier effect of retail channel (B2C) sales?
I spoke to Lev Grzhonko, CEO of MonDevices, to find out how their company garnered interest and presence with national retailers to grow the business and increase sales. MonDevices created the most affordable smart baby monitoring product on the market called MonBaby. Grzhonko shared the company’s top B2B strategies that support the efforts of its B2C resellers.
Concentrate on Relationships Rather Than Fundraising. Leaving majority of company shares with founders allows the vision and quality of the product to be preserved. And utilizing partnerships with national retailers to popularize and market the product leads to greater recognition and increases direct sales as well. “This is actually a core part of our growth strategy as we, unlike our competitors, did not raise millions in institutional funds, and thus went a different route,” says Grzhonko.
Willingness to help people and foster relationships can help companies stand out with partners, as this goes above and beyond what can usually be expected of most companies. In fact, excellent customer service and communication assists in growing both B2B and B2C business over time. What is perhaps most interesting is that positive service provided on a B2B level often converts into B2C sales, as counterparts on a retail and distributor level often tend to recommend the product to their family and friends, leading to a bump in direct sales.
Ultimately, whether most of your business is B2B or B2C, you’re inevitably dealing with people. If the expectation of a positive customer experience is set from the beginning, it has a trickle down affect and goes a long way in growing the business.
Increase Company/Product Recognition Through National Retailers. Retailers can carry the brand forward. If the company is operating in a lean manner and isn’t relying on external institutional funding to carry it through its initial growth stages, being astute about how products are taken to market is crucial, as the revenue generated from the sales will need to cover the company’s operating expenses. Without a hefty marketing budget, companies benefit substantially by having the product carried by major retailers. This strategy achieves three important goals:
- It exposes the product to a much larger audience
- It allows the product to be marketed and popularized by the large retailers who have more access and larger budgets
- It adds credibility to the brand because consumers are able to see it next to other popular products that, in turn, create more demand and a higher sell through rate for the direct B2C approach
Think Big and Be Flexible. Each market is different and can require a unique approach and, perhaps, some customization of a product in order to adopt to the requirements of a specific region. MonDevices’ willingness to be flexible allowed them to enter regions in which they were the first ever smart wearable baby monitor that was available to new parents at an affordable price.
Although there is a significant amount of work involved in tailoring the product to the use case of a specific region, the demands from retailers result in consumer interest. This creates opportunities to sell the product directly to consumers once the brand has been established. As an example, MonBaby will be widely used at many daycare centers in Japan. They will then market the product to parents, paving the way for B2C sales in that region.
Confirm Value Through Research. Partnering with educational institutions or well-known research companies who can utilize your product for their studies is another great way to leverage partnerships and enhance company growth. This confirms the value of the product as a well-designed and well-made device, and armed with the knowledge garnered from the research, consumers are more likely to trust and purchase the product. Armed with third-party data, it may be easier to bring on otherwise skeptical retailers.
Use these steps to expand from a pure retail (B2C) business model into a more leveraged wholesale (B2B) distribution strategy.
