Technology catalysts for B2B2C growth
By Vanessa Kearney, Client Partner, xSMTHS
The evolving digital ecosystem around privacy and data ownership is becoming increasingly important to brands that are looking for ways to progressively build, consolidate or expand their market positions.
In the B2B space, brands are more than ever aware of the advantages of having direct insights to and contact with their customers. Even though B2B brands traditionally have limited or no B2C channels, understanding consumer behaviour– for instance, the most popular products in certain geographies – makes a big difference to how B2B brands build and enhance consumer engagement, and how they shape their product development strategies going forward.
The B2B2C evolution
B2B2C (business to business to consumer) combines traditional business to business (B2B) and business to consumer (B2C) e-commerce models specifically for those organisations that want a more direct view of their end customers, and strategic marketing input for improved consumer engagement. This poses a challenge, however, when brands that have limited contact with their end users need to actively gauge and respond to the customer experience of their products or services. That’s because the bulk of the granular end user data, where the most valuable and immediate insights are stored, is generally held by customer-facing partners.
This is where the B2B2C model comes in, giving both the lead brand and its distributors a way to share data that’s compliant and mutually beneficial.
A luxury vehicle manufacturer, for example, will naturally want to be an extension of its dealership network’s marketing function, in order to get closer to its customer insights. But for the dealerships, end user data is their bread-and-butter, their competitive differentiator, and so they may be reluctant to share it, even with their parent brand.
That’s why, in practice, the model poses some serious challenges. One of the main roadblocks is at the point where the two B’s in B2B2C – the lead brand and its distributors – need to share valuable end user data with each other. In the past, solutions like MDM (Master Data Management) approaches to curate end-user data often resulted in even more roadblocks, such as technical issues, contractual disagreements, or a lack of equitable buy-in from all parties due to disproportionate value exchanges.
A different mindset
To break through the roadblocks, we have to think differently. We’re already seeing a flurry of activity around cookieless e-commerce where advertisers are navigating toward their new reality and marketers are realising the importance of their 1st party data strategies. Innovation is all around us and it’s hard not to feel excited – but there are no hard and fasts, tried and tested is not common. Business cultural shifts are required.
What if B2B partners could put all their data in a central ‘clean’ repository, and use current innovative technologies like machine learning and AI to interrogate the data for mutual benefit – without compromising each other’s IP or competitive advantage? What if both parties had a way to share categorised and segmented data, implementing hard and fast rules that give each other the confidence that the data is safe, secure, and not open to abuse?
Data Clean Rooms (DCR), according to Forbes’ Michael Schoen, are like the blockchain of marketing and analytics, “providing secure platforms where multiple parties can share anonymised offline and online consumer data without ever exposing the raw data to any other party”. They can be set up with pre-determined rules, so that data can only be added, shared, and viewed in specific ways, or even limited to specific data sets. All data in a DCR is automatically purged of personal identifiers, thus protecting end user information, improving security, and ensuring regulatory compliance.
How would this work? Take the example of a plumbing supplies manufacturer selling products through its main distributor, a large hardware chain. Both parties input data into the DCR. The manufacturer shares data about its various product types and materials, and the retailer shares data about customer behaviour specific to those products. Now, both parties have a bigger view of, for instance, how customers are using the products, whether they are buying in a physical store or online (or looking and not buying), customer satisfaction with the products, and reasons behind returns, warranty claims and repairs.
This allows brands to get a better view on the best-performing audiences and channels from their retailers – and for retailers, it helps improve category and inventory management. Better collaboration between partners opens the door to more effective promotions and advertising, with deeper insights into their respective marketing strategies.
Of course, Data Clean Rooms are not a silver bullet. They can be expensive and time-consuming to set up, and ideally require a critical mass of data to be shared between parties before that data can prove useful. But DCRs, and technology like them, are very much a step in the right direction.
Closing thoughts
Make no mistake, B2B2C is a conundrum that won’t be solved by any one idea or technology. DCRs give brands and their B2B partners access to data to innovate around their product lines, rather than falling back on what they think will work, based on what worked in the past. It allows them to be proactive and bolster their marking initiatives with the sophistication of insights and data modelling not necessarily common at this level of intermediary business.
Ultimately, we need to see more – not less – of these types of collaborative technologies and data-driven thinking breaking through into the mainstream. It’s about trying on new lenses of approach. Some will fit, others won’t, but nonetheless we need to change how it was done in the past to successfully move forward with our B2B2C strategies.
Vanessa Kearney is Client Partner at xSMTHS, a Salesforce Partner business that specialises in the building and implementation of cloud-based, data-driven marketing technology solutions. https://xsmths.com