** Live Blog ** Building a B2C Business in a B2B Town

This post is a **LIVE blog ** that is being updated in close to real time with the New Economy New Rules event 2013: Tech Stories of the Year. Attributions are not direct quotes but paraphrased chronicling of the discussion. 

Shawn Schwegman Randy Stocklin Shelly Towns
    Shawn Schwegman    
CEO, Gusto 
Randy Stocklin
 CEO, One Click Ventures 
Shelly Towns
  VP Product, Angie’s List 

One-to-one communications of direct email, social media and display advertising, for example, may have blurred the lines between business-to-consumer and business-to-business marketing. But it would be a mistake to think that building a B2C business follows all of the same rules and patterns as building a B2B business.

While B2B businesses may initially seem more complex than their B2C counterparts — such as longer sales cycles, multi-layered sales channels, and less control over the brand relationship — the nuances of a B2C business can be equally as complex and, in some cases, those nuances can carry substantially more risk in the B2C world.

From sales and marketing to product development, and from talent acquisition to corporate infrastructure, our experienced B2C panelists will share their perspectives on the challenges of building a B2C business (particularly doing so in a community with a penchant and reputation for business enterprise software.)

What marketing tactics do you most often use and why?

Shawn Schwegman

Gusto is a mobile-first company. The whole goal for the business is to launch user growth as much as possible. Shawn says he really believes in and relies on public relations and that they specifically work closely with Indy-based Dittoe Public Relations.

Gusto is also using Tapjoy to get the Gusto app in the hands of people. Tapjoy users earn points to play games by downloading apps and it gives Gusto the jump they need to enter the market and get featured on iTunes.

They are also using Facebook marketing as a failure test site. It allows Gusto to very quickly find out which marketing strategies work and which ones don’t.

Shawn says that navigating the angel funding network has been a bit of a challenge and that it seems like it’s easier to pull in $20 million than $1 million in a b2b town. He thinks it’s easier to secure investment after the launch because the focus shifts to growth.

 

 

Shelly Towns

Many people know that Angie Hicks went door to door selling Angie’s List memberships and by the end of a year there were 1,000 people signed up. Shelly says that with their network model, EVERYTHING is marketing. At Angie’s List they are happy to fail, but they prefer to fail fast and move forward. Angie’s List is a risk tolerant group.

 

 

Angie’s List did a lot with market by market public radio early on before taking a national approach. The combination of digital marketing, search marketing and more traditional, offline marketing achieved the brand identity they set out to build.

Randy Stocklin

One Click focused on digital channels for marketing. Other than some public relations efforts, they haven’t really explored offline marketing opportunities. However, in One Click’s go-forward direction, Randy does see the company investing in some channels that are NOT digital like public relations, radio and print.

Shawn Schwegman

Shawn thinks one of the biggest differences between B2C and B2B is brand awareness and direct response. There is always a blend, but in ecommerce there is a greater focus on direct response, At Overstock.com, 80-90% of the buy was focused on direct response and the brand awareness was used in the same markets to lift the click rates.

With Gusto, they launched in Indianapolis rather than at SXSW or somewhere else because they wanted to raise awareness inexpensively so they put most of the buy into direct response.

Shelly Towns

There is a tail and halo effect with brand awareness and Angie’s List knew that offline spend would help the clicks, but the focus is more of dual effort with a focus on marginal growth compared to what Shawn described with Overstock.

Randy Stocklin

One Click is pure-play online retailer that has grown a lot through acquisition. A year ago they looked at their business and decided to go in a different direction. No one at One Click was particularly energized about continuing to build a block and tackle transactional ecommerce business, but they saw great potential and desire for building a company with a unique brand experience.

Randy said it’s not possible to compete against Amazon with the same products — nobody does variety at a low price shipped fast better than Amazon. But One Click is very data driven and they identified great market opportunity for creating a defensible market position in the $20 billion eyewear industry. Eyewear online was only at about 2% a year ago, but now it’s at 5%.

This summer, One Click is expanding its eyewear business and deploying marketing dollars to support a unique brand experience that really can’t be replicated by competitors like Amazon. The new brand will include prescription glasses, sunglasses and readers in the $75-$300 range – upstream prices with a compelling value proposition.

Increasingly AL has a B2B component that is part of the revenue stream, monetizing the service provider side.

Shelly Towns

Even though Angie’s List is known better for its B2C side with members, there has always been a B2B component with the service providers. In fact, Angie’s List management recognized that membership from the consumer side was never going to be able to pay the bills and fund the kind of growth they needed, which is why they have had a dual B2C/B2B model from the very beginning.

Today, about 60% of Angie’s List staff is dedicated to the B2B service provider side, and they are managed by separate internal teams.

The goal is to increasingly make the Angie’s List experience more and more valuable for the service providers, because their talent in turning a wrench, designing a kitchen or fixing a car, not in dealing with the administrative aspects that Angie’s List can handle for them. They focus on making their lives easier and giving them distribution and visibility so that service providers can focus on what they do best.

According to Shelly, it’s working. Some service providers report that 100% of their business comes from Angie’s List.

Shelly said that the business is undergoing some tech overhauls right now that will help them answer the question “how can we help you?” They aren’t creating technology for technology’s sake, but breaking the entire process down from beginning to end and analyzing where they can simplify things.

A new product,SnapFix, is an example. It’s a mobile tool that let’s members take a pic to identify the problem and schedule service. Shelly said that the team is very data driven and they are focused on solving problems like how to get the plumber to your house faster, how to avoid taking the day off work, and other friction points in the transaction loop.

She said that brands like Amazon have raised expectations so high that everybody expects the same level of service, they want to do everything online, and the process should be perfect.

This idea has really brought about a shift in the company from being marketing driven to being much more product driven — a product culture — and they are meeting that demand by building and recruiting the talent to build the tools that get it done quickly.

There is a lot more content from this discussion to come. Please check back later for more …

ABOUT THE AUTHOR

Joshua Hall is editor of techpoint.org. He writes about Indiana tech companies, jobs, people & events. @joshua2349