Business To Consumers (B2C)

Tech Word for The Week is a weekly series where we look to explain commonly used words in the tech ecosystem in a simple, engaging way.

B2C became popular as a terminology in the late 1990s. With the rise of the internet, B2C was predominantly used by online retailers who sold products to clients online. It was first used in 1979, by Michael Aldrich who used television as the primary medium of reaching out to clients.

A company can serve consumers directly, serve other businesses, or do both. However, today we are going to examine the business to consumers model of business.

Ebuka bought two Toyota Camry cars and lists them for a ride-hailing startup. He has the option of serving two distinct clients. He can target emerging startups who need a car for the mobility of their top executives but do not have an official car yet. Conversely, he could go the route of serving individual clients who just need a car for mobility.

If he chooses the latter, his startup is a Business to clients company. But if he chooses the former his startup is a Business-to-business startup. And if he decides to serve both clientele, then Emeka’s startup is a hybrid of B2C and B2B.

In this week’s edition of Tech word for the week, we would focus on Business-to-consumers. So what’s a B2C company?

A business-to-consumers company sells products or services directly to the final users - consumers. They focus on individual clients and serve them in units. This entails that they focus on selling units of their products (or services) to a large number of clients.

Back to our analogy of Emeka and his ride-hailing startup - if he eventually picks a B2C, he has to maintain good relations with his customers to guarantee repeat business. His business structure and system will also be inherently different from other business models to attract the right consumers.

Benefits of B2C

Direct Customer Service

Selling directly to clients mean they enjoy the value of your product at your fixed price. No price markups by any middleman. The startup would also get the opportunity to offer great and custom-made customer service to each client.

Faster Business Growth

B2C companies focus on ramping up the number of customers quickly. Their revenue is in the numbers.  This need to reach a significant number of customers will accelerate their growth faster. This is true especially if they find product-market fit early enough.

Wider Customer Reach

Since B2C companies operate online they can reach a wider customer base. The internet is used by millions of people who can be converted to loyal customers. The internet can show a product to a larger number of people in a day than a physical office can see in a month.

Final Thoughts

Regardless of the business model, startup founders need to start from the basics- need recognition. This will guide you as to where and how you can aptly serve your target audience. B2C startups should endeavour to implement strategies that would elicit an emotional connection to their product.  Some ways this can be done include creating valuable free content, maintaining good customer relations, creating a great user experience, etc.