Before investing in SaaS companies, Tomasz Tunguz was a Product Manager at Google, where he introduced AdSense to Europe and Asia. In this conversation, LeadGenius talks with Tomasz about the insight of an effective (and newly defined) buying strategy, B2C2B aka “business-to-consumer-to-business,” and why every company needs to be aware of it.

 

There seem to be close similarities between account based selling and B2C2B. What is the main difference between these two approaches?

[Tomasz Tunguz] Yes, you’re right. They share the idea of creating many advocates within companies in order to close a sale. I think the main difference is ABM/ABS (Account Based Marketing/Selling) is more focused. The sales and marketing teams using ABS focus their efforts uniquely on a handful of particular accounts.

On the other hand, B2C2B is broader, and while the ultimate objective is the same, there’s far less targeting involved. Rather than using sales and marketing to cultivate champions, B2C2B companies tend to employ product.

 

Who are some companies that are doing a good job with B2C2B selling? What are they doing that works so well?

There are lots. Atlassian filed for their IPO last week. Slack is growing really quickly. Expensify is a good example, too.

All of these companies brought unique products to the market that grew based on word of mouth. All of them relied on organic marketing for a very long time to drive growth. They focused on product differentiation to drive awareness, and, for customers to sign a contract. These companies also do a terrific job supporting their advocates within larger accounts, to help them convert.

 

Can you explain the three different types of B2C2B selling (2 Phase Sell, Up Sell and Cross Sell)?

Happy to. A 2 Phase Sell is another word for B2C2B. A company convinces an individual (the C), to use the product. After many consumers use the product within a company, some fraction of the business (the B) converts.

b2c2b_2_phase_sell

source: tomtunguz.com

Up Sell is convincing an existing customer to buy more of the same product—more seats, more gigabytes, more minutes.

b2c2b_up_sell

source: tomtunguz.com

Cross Sell is convincing an existing customer to buy another product, for example, if you’re a Salesforce CRM user, you would be cross sold if a salesperson convinced you to buy some Marketing Cloud seats.

b2c2b_cross_sell

source: tomtunguz.com

 

Is B2C2B more of a marketing, sales, or overall business strategy?

It’s an overall strategy. It has to involve marketing, sales and product to be successful. Product has to build a differentiated experience. Marketing must maximize the value of the users employing the product. And sales needs to focus on the high potential existing users, encouraging them to pay.

 

What is the role of the Influencer in B2C2B?

The Influencer in the B2C2B sell is the person pushing their company to buy a particular product. They take it upon themselves to bring a better product into their companies, and align the internal decision makers to buy the software.

 

Why is B2C2B considered so disruptive?

Often it’s disruptive because the costs of customer acquisition are dramatically less expensive than a direct sale.

 

It’s clear that B2C2B is changing the process of sales. How is it changing the outcome?

Companies that employ this model are often far more efficient that their competition. As a consequence, they can grow faster and consume less capital to generate the same revenue. Because incumbents can’t replicate the model, the B2C2B companies erect an unassailable moat around their businesses.