- C2B businesses focus on generating value from their customer base by crowdsourcing ideas, soliciting feedback and more.
- 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 while improving products and services and building brand loyalty.
In contrast to the more traditional business-to-consumer (B2C) model, the consumer-to-business (C2B) model allows businesses to extract value from consumers, and vice versa. Here's a look at how C2B business models work and why you may want to start a C2B business.
How do C2B business models work?
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, former executive vice president and CMO of C2B Solutions, said C2B's distinguishing feature is the value customers bring to the company.
"This could involve consumers co-creating ideas, product or 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, and 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 relationship by simplifying how bloggers get 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 that's 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.
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, including models related to the following areas:
- Marketing and brand awareness
- Market research
- Freelancing, contracting and gig employment
Marketing and brand awareness C2B models
In today's economy, it's 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. That is why influencer marketing and affiliate marketing have gained traction.
Influencer marketing
Influencers are individuals with a large audience, particularly on social media, but sometimes in traditional media as well. This can be someone who is already famous, such as a professional singer like Ariana Grande or an actor like Dwayne "The Rock" Johnson, or a person who built up a large following (think the Kardashians).
People care about influencers' opinions and endorsements, so when one of them talks up your product or displays an ad to their millions of followers, sales are bound to result. Companies usually reach out to influencers individually and create a relationship with them. They offer influencers free products or services (so they can give an authentic endorsement) and then take one of these actions:
- Offer to provide content for their blog.
- Ask them to profile the company or interview a company leader for a podcast or video.
- Inquire about paid endorsements (major influencers will be out of reach for small businesses, but niche influencers may be affordable).
Affiliate marketing
While influencer marketing is based on an individual's appeal, affiliate marketing is based on a company's or website's marketing knowledge and audience size. The affiliate marketer chooses the brand or product to promote, usually from a list of products on an affiliate marketing marketplace.
Once the affiliate marketer chooses a product, they promote it to their audience however they see fit, usually via website ads or email marketing. When a customer clicks on the unique affiliate link and purchases the product, the affiliate marketer receives a commission.
Here are some of the most popular affiliate advertising and marketing channels:
- Google AdSense. Consumers with a highly trafficked website can use the Google AdSense program to earn money by displaying ads for complementary products and services through Google.
- CJ Affiliate. The CJ Affiliate marketplace is like a reverse Google AdSense. Consumers who want to earn more money from their website traffic or email lists browse affiliate offers, choose one to promote, and earn a certain amount when a visitor purchases through their unique link.
- Amazon Associates. The Amazon Associates program allows influencers and publishers to earn money by recommending products. When a visitor goes to the influencer's site and buys an Amazon product through the unique link, the influencer or publisher gets paid.
Market research C2B models
Businesses are constantly looking for more data to drive the research and development of new offerings and marketing tactics. An effective way to gather that data is to conduct customer surveys. When consumers are incentivized to complete these surveys, businesses get more data.
In addition to surveys, some companies pay consumers to test their websites or software to detect programming, flow or design issues before they are launched to the public.
These are some examples of C2B market research models:
- American Consumer Opinion. Users on the American Consumer Opinion website take surveys to earn points they can redeem for PayPal Cash, sweepstakes entries or charitable donations.
- Kashkick. Consumers can earn money not only by taking surveys, but also by watching videos and playing games. The Kashkick website pays a set amount per task, usually around 20 cents. Users can withdraw their earnings once they reach $10.
- UserTesting. The UserTesting website asks users to perform specific online tasks while videoing themselves and supplying a spoken narrative of the process that details their experience. Companies can see frustration and confusion points by looking at testers' facial expressions and hearing their comments.
Freelance, contractor and gig worker C2B models
These C2B models match freelancers, contractors or gig workers with businesses that need an independent contractor for a short-term task or deliverable. Consumers get access to job and project listings from companies and can bid on them or post products for sale.
The marketplace receives a commission from providing businesses with an extensive network of individuals who want to work with them. Businesses and independent contractors alike find this service helpful for making new connections and developing new working relationships.
Here are some C2B services that focus on helping freelancers or gig workers network with businesses:
- Fiverr. The Fiverr website started with contractors offering services for $5 as a loss leader, but it has evolved to offer somewhat higher price points. Once a company has hired the contractor for an inexpensive task, they are more likely to keep using that contractor for subsequent projects.
- Shutterstock. Professional and amateur photographers can make money on the side by uploading their photos to the Shutterstock website. When a company downloads the image, the photographer gets paid. In return, companies get a low-cost source of royalty-free images.
- Upwork. The Upwork marketplace works similarly to Fiverr, but rather than posting tasks at a low, fixed price, freelancers compete with each other by bidding on projects posted by companies.
Why start a C2B business?
In an era when technology has democratized creative content and consumers have more power than ever, it makes sense to gear your company toward using the consumer as a resource. After all, if the customer is always right, collecting their insights, suggestions, recommendations, and content can only benefit your company.
Starting a C2B business offers two huge benefits:
- A competitive advantage. If you engage with customers and consumers and understand their needs and perceptions, you can customize your products and services to meet their needs more precisely. You can also use customer feedback to make your marketing more effective. This will give you a clear advantage compared to others in the competitive space who are only guessing about customer needs or getting one-step-removed market research.
- A collaborative platform. When you ask customers for input and then act upon that feedback, the result is engaged customers with more customer loyalty. These customers will be your brand ambassadors. You can also source content for a much lower price from amateurs than from professionals, resulting in significant cost savings.
How to create and grow a C2B business
Because C2Bs are relatively new, underlying legal issues such as billing and receiving money have yet to be fully sorted. A traditional company pays 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.
Tools for growing your C2B business
Growing your C2B business requires dedication and a few unique skills. In contrast, "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 and 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.
Pursuing a C2B approach
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."
Jennifer Dublino and Elaine J. Hom contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.