How do I target business customers?

I run a games software business, and our products have proved popular with consumers. I’m keen to exploit business-to-business (B2B) interest to provide another revenue stream. What are the key differences in marketing to businesses as opposed to consumers? How should I approach large operators and structure the pricing accordingly?


A. Michael Phillips writes:

Expanding your client base to encompass businesses as well as consumers can significantly increase revenue opportunities and provide a valuable way of accelerating market dominance for your products. But there are crucial differences in the way you will have to market to, manage and contract with business customers: Marketing: Consumers want to save money; businesses want to make money. Identify what makes your B2B customers tick, then make sure your marketing highlights how your specific products address this. It is important to find points of difference in your B2B products. We secured Ofcom accreditation and re-launched our comparison service to provide unique features for our white label partners. Business model: Be prepared to run at low margins, because your B2B customers will expect to make decent money themselves. Taking a lower cut yourself to the benefit of business partners can secure longer-term commitments. If you get greedy, you run the risk of creating short-term partners and long-term competitors. Account management: Focus on improving efficiencies and reducing cost in managing B2B relationships. Margins will always be under pressure in the B2B space, so focus on using technology to keep cost down. Your B2B partner is like a microcosm of your own business with the same information requirements. Consider what information/reporting and support your B2B clients will need to help them to sell your products. We addressed the management information requirements of our B2B clients by providing near real-time sales analytics. Invest in your B2B product. Don’t treat it as second best to your business-to-consumer (B2C) lines. Managing both client groups is like walking a tightrope. If you prioritise B2C ahead of B2B, then your competitors specialising in B2B will win or retain the key clients. Legal: Invest in a comprehensive contract template and allow it to evolve as you sign new clients. Think about the advantages and disadvantages of granting exclusivity, protecting your own routes to market, and, most importantly, protecting your intellectual property. B2B clients will expect service level agreements (SLAs) so you must consider what you can – and can’t – guarantee to deliver to them. Business clients will need indemnification to protect them against claims from shortcomings in your products. Ensure you look at professional indemnity cover. Your obligations become more complex (and costly) when you deal with businesses.

Michael Phillips is the managing director of Consumerchoices.co.uk, a utilities self-help service, which, through a business-to-business offering, powers the back-end of various price comparison sites. http://www.consumerchoices.co.uk/

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