Are B2B Deal Sites An Effective and Reliable Way To Generate Sales?
With Groupon recently having been identified as one of the fastest growing companies in history, can the business model that they, and sites like them, have adopted be applied in the business to business marketplace?
Leisure, Fashion, Beauty And Household Deals Abound but What About The Poor Old Businessman?
Truth be told, there is now an abundance of offers available to the general public covering everything from spa days, restaurant deals, weekend breaks, hair dressing, beauty therapy and so on. Most of us can find something of interest amongst the thousands of deals that are available.
For businesses that are involved in those industries, or others like them, this can be a very good way of generating business and cash flow. Excess inventory can be offered and sold thereby releasing capital from being tied up and making it available for other things.
Other businesses, however, find that this approach is of no use to them. Why is that? The answer is that the products and services offered by those businesses are aimed at business users. Those businesses are in a sector which is generally referred to as “B2B” or “Business To Business” and they generally do not sell to the general public as part of their business model.
We have recently seen the emergence of a new breed of daily deal site which caters specifically for the B2B sector and perhaps the best known example of this is “BizzBuzz”.
What type of business would this include and what kind of services could they offer?
Typical of the types of businesses that are considered to be B2B are:
- Commercial law services specialists including legal document suppliers
- Design and marketing agencies
- Commercial printers, e.g. business cards, letterheads etc.
- Commercial cleaning and facilities management companies
- Office equipment suppliers
- Internet service providers including web designers
There are, of course, many more types of organisation that could offer services to the business community and there will of course be overlap in that some will service both business and non-business customers.
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How Could the Daily Deal Model Be Used To Help These Businesses Sell More?
The daily deal websites such as Groupon and BizzBuzz negotiate highly discounted deals with suppliers and announce them daily, by email, to an opted-in subscriber base. The deals are usually very attractive and have an upper limit as to the number that is available. This is to prevent the possibility of overselling or taking orders that are too numerous to service.
In a business to business situation this is especially important since the late delivery of an order can mean lost revenue or even worse, lost customers, for a business.
Suppliers must be cautious when using such techniques to make sales since the cost of servicing the deals can be high and needs to be taken into account when calculating the benefit that the increase in sales has on the business.
Daily deal sites, especially in a B2B sense, are all about generating leads for businesses to make an initial sale which can then form the basis of an on-going business relationship with the potential of further sales in the future.
It may seem attractive at first to sell a large quantity of a product or service in a short time but the costs can be high and, when calculated as a cost per lead or customer acquisition, then margins can be seriously impacted if costly mistakes are made.
How Can Businesses Guard Against Such errors?
It’s all about structure! Structuring the deal is of paramount importance and the following should be considered:
- Is there sufficient stock to service the anticipated orders?
- Can the business deal with a sudden influx of orders?
- Are the necessary follow-up procedures in place to maximise the upsell and ongoing sales opportunities that will be generated by the promotion?
If you are a business to business supplier and you would like to boost sales and increase your customer base with daily deals, how can you ensure that all of the above potential problems are avoided?
Deal Structuring Specialists – A Problem Solved Before It Happens!
There is a relatively new service sector emerging, particularly within the digital marketing community, which can significantly help with the structuring of daily deals and other sales activities of this kind.
In essence, the marketing specialists will help you to avoid the ramifications of getting the structure of the deal proposition wrong. Careful planning, putting procedures into place to handle the anticipated increase in business and the placement of the deals on the available websites at the optimum time are all essential services provided by such specialists.
If you have a business that services the B2B sector it may be well worth your while contacting such a specialist and giving your business a well-earned and well planned, boost.