- C2B businesses focus on generating value from their customer base, such as by crowdsourcing ideas or soliciting customer feedback.
- Google AdSense and Shutterstock are some real-world examples of C2B services.
- Market research and audience engagement are key for C2B businesses.
- This article is for small business owners who want to engage their audience to develop new ideas and improve upon products and services while building brand loyalty.
How do C2B business models work?
In contrast to the more traditional business-to-consumer model, the C2B (consumer-to-business) model allows businesses to extract value from consumers, and vice versa.
In the C2B model, businesses profit from consumers' willingness to name their own price or contribute data or marketing to the company, while consumers profit from flexibility, direct payment, or free or reduced-price products and services.
Brent Walker, vice president and CMO of C2B Solutions, says the distinguishing feature of C2B is the value customers bring to the company.
"This could involve consumers co-creating ideas, product/service concepts and solutions with a company through social media," Walker told Business News Daily. "C2B can also mean that a business brings consumer insights and consumer-centric solutions to another business as its primary service or value-added offering."
C2B business models include reverse auctions, in which customers name their price for a product or service they wish to buy. Another form of C2B occurs when a consumer provides a business with a fee-based opportunity to market the business's products on the consumer's blog.
For example, food companies may ask food bloggers to include a new product in a recipe and review it for their readers. Free products or direct payment may incentivize YouTube reviews. C2B could also include paid advertisement space on the consumer's website.
Google Ads and AdSense enable this kind of relationship by simplifying the process through which bloggers can be paid for ads. Services such as Amazon Associates allow website owners to earn money by linking to a product for sale on Amazon.
The C2B model in the digital era
The C2B model has flourished in the internet age because of ready access to consumers who are "plugged in" to brands. Where the business relationship was once strictly one-directional, with companies pushing services and goods to consumers, the new bidirectional network allows consumers to become their own businesses.
Decreases in the cost of technologies such as video cameras, high-quality printers, and web development services give consumers access to tools for promotion and communication that were once limited to large companies. As a result, both consumers and businesses can benefit from the C2B model.
For the C2B relationship to be fulfilled, the participants must be clearly defined. The consumer could be any individual who has something to offer a business, whether a service or a good. Some examples would be a blogger, as mentioned above, or a photographer offering stock images to businesses. The consumer could also be someone participating in a survey site or referring someone through referral hiring sites such as Upwork.
The business in this model could be any company planning to buy goods or services from individuals, either directly or through an intermediary. An intermediary would connect the business to the pool of individuals, acting as a portal both for buyers and sellers. The intermediary promotes goods and services through distribution channels, and gives individuals promotional, logistic and technical expertise.
For example, the intermediary could be a company looking to fill a job through a referral hiring site, a company seeking to advertise online through Google Ads, or a company that needs individuals to take surveys and provide market research.
C2B business examples
Some of the hottest C2B businesses focus on authentic connection and flexibility.
In today's economy, it is increasingly important for consumers to trust the brands they interact with. This trust increases with greater exposure from advertising on websites, blogs, YouTube videos and more. These advertising channels include the following:
- Google AdSense
- CJ Affiliate
- Amazon Associates
Businesses are constantly looking for more data to drive their research and development of new offerings, as well as their marketing tactics. An effective way to gather that data is to have their target market fill out surveys. When consumers are incentivized to complete these surveys, it's possible to get more data. That's where these C2B companies come in:
- Survey Junkie
These C2B services focus on helping freelancers or gig workers network with businesses:
These companies make money by providing businesses with an extensive network of individuals who want to work with them. Businesses and independent contractors alike find it useful to make new connections and develop new working relationships.
How to create and grow a C2B business
Because C2Bs are relatively new, underlying legal issues such as how to bill and receive money have yet to be fully sorted out. A traditional company would pay wages to a limited group of employees, but C2B businesses might have to process credit card payments for thousands of customers. Fortunately, intermediaries often take care of the financial and legal aspects of C2B transactions. Services like PayPal and Google Pay ease the burden of payment, and Google AdSense pays webmasters by sending them checks in U.S. dollars, incurring shipping fees for Google and currency conversion fees for international users.
Tip: Consider one of the many PayPal alternatives if you prefer to use a different digital wallet or payment platform.
Growing your C2B business requires dedication and a few special skills. "B2B typically relies on its sales function and account management team to establish and strengthen customer/client relationships," Walker said.
According to Walker, companies interested in extending their models to reach a C2B audience should consider these marketing tools:
- Market research (quantitative surveys, qualitative interviews, segmentation)
- Consumer feedback channels, such as rating and reviews, customer service lines, and avenues for suggestions or comments
- Social media, such as online user communities, Facebook pages and Twitter followings
"Marketing may include advertising in trade journals, having a presence at conventions and trade conferences, digital marketing (online presence, SEO, email outreach), and other traditional awareness efforts," Walker said.
C2B is a new and growing segment of the business market that can either function as a company's entire business model or augment an already-successful venture. As with all business models, your company's success will depend on your understanding of the marketplace and your willingness to pursue new technologies that make reaching your customers easier than ever.
"Pursuing a C2B approach is a strategic choice and requires a commitment to involving the consumer in business decisions," Walker said. "This takes extra effort, resources, and discipline to avoid being internally focused, but it is critical for a business to succeed in a consumer-driven marketplace."
Marisa Sanfilippo and Elaine J. Hom contributed to the writing and reporting in this article. Some source interviews were conducted for a previous version of this article.