Three tips for generating B2B growth as a startup business:
- Offer business-to-business (B2B) clients a value-added twist on an existing service, such as providing e-commerce-only businesses a “buy online, pick up anywhere” (BOPA) option so their customers can retrieve online orders at a variety of different merchants, rather than just one via the “buy online, pick up in store” (BOPIS) perk.
- Forge partnerships with established, complementary businesses to help drive scale.
- For business-to-consumer (B2C) startups seeking heightened visibility, consider taking on a B2B client to amplify brand exposure.
Startups offering everything from software platforms to personal care products are finding plenty of opportunity helping other companies deliver enhanced customer experiences, resulting in notable growth via business-to-business (B2B) transactions, a trio of startup executives told CO—.
For everyday essentials like soaps and cleaning products, Public Goods, for one, has unlocked new growth by expanding its sales to hospitality and retail clients.
Meanwhile, delivery startup Via.Delivery is helping its retail customers keep up with challenges in the e-commerce and fulfillment landscape, enabling them to deliver to more customers for less with its network of local pickup locations.
And Airbase, which allows mid-size companies to combine services like corporate credit cards and expense management into a single platform, is in active growth mode having recently announced a new round of funding as well as a partnership with American Express.
All three businesses are delivering a measurable return on investment for their customers and are working towards achieving long-term profitability, said startup executives.
Chris Breen, Head of Partnerships at sustainable home essentials brand Public Goods; Mitchell Nikitin, Co-Founder and CEO of alternative third-party fulfillment company Via.Delivery; and Thejo Kote, Founder and CEO of corporate spending management platform Airbase, shared how leveraging B2B opportunities has led to positive results for both their clients and their own companies.
‘The beauty is that these brand partnerships not only drive revenue, but also drive brand awareness’
Chris Breen, Head of Partnerships, Public Goods
Our B2B focus from a company-wide perspective is recent, but we've been building the team and preparing for this growth for about three years. Our partnerships team is split between two B2B sectors, hospitality and retail. I decided to create a sales process that encourages independence and growth internally, and externally to our partners. Our partnership managers have formed deep personal relationships with businesses in both industries, and we've continued to retain partners like [hospitality platform] Zeus Living, [who] have been there since the beginning.
About 60% of our B2B revenue last year came from hospitality partners. The remaining 40% of B2B revenue was from boutique retailers and same-day fulfillment partners.
It has become evident that Public Goods as a [personal care and household products] brand is uniquely positioned for the hospitality industry—more specifically, working with fully furnished rentals and vacation rental hosts. Thankfully, these companies have seen post-COVID that work from home is here to stay; more people are traveling not only for vacation but to work in new environments. Our partners Zeus, Blueground, and AvantStay, as well as individual Airbnb hosts, benefit by having a simplified sourcing experience where they can use us as a one-stop-shop for their business. They are also enhancing their guest experience with the design and quality of our products. And we offer these products very affordably; as our product assortment grows, so does our value proposition.
The partnerships team's efforts create increased customer acquisition because we are bringing a real-life interaction to a native DTC company that once existed solely on a website. Once you experience our products in an atmosphere like a boutique hotel or Airbnb, we build brand affinity. Today's consumers have aspirations in design and sustainability and seek products that are trustworthy and simple. The beauty is that these brand partnerships not only drive revenue, but also drive brand awareness.
The partnerships team's efforts create increased customer acquisition because we are bringing a real-life interaction to a native DTC company that once existed solely on a website. Once you experience our products in an atmosphere like a boutique hotel or Airbnb, we build brand affinity.
Chris Breen, Head of Partnerships, Public Goods
Today, Public Goods has over 800 B2B accounts and is growing rapidly. In 2021, Public Goods experienced 328% B2B sales growth year-over-year. There is a concept that Jim Collins mentions in his book "Good to Great" called “the flywheel effect.” The flywheel builds momentum over a series of small wins across the company. In this example, our DTC efforts toward growing the brand have improved inbound interest for B2B [which in turn has led to] more DTC customer acquisition. Thus, the flywheel.
[Read: How 3 Startups Achieved Growth by Enabling Memorable Customer Experiences]
‘The return on investment for our clients is outstanding’
Mitchell Nikitin, Co-Founder and CEO, Via.Delivery
Via.Delivery launched [what it bills] the largest alternative delivery network in the U.S. late last year. With more than 24,000 locations, our team is currently focused on onboarding new clients, recruiting talent, as well as educating consumers and merchants through our most recent growth initiative, “buy online, pick up anywhere”[BOPA], a concept that is quickly gaining traction.
BOPA is made possible through our first-to-market technology and delivery service that enables pure play e-commerce merchants the ability to offer customers the option of picking up their packages at a nearby commercial location such as Walgreens, Kroger, or the corner gas station at dramatically reduced shipping costs.
The industry has reached a point where carriers can no longer keep up with the demand for residential delivery [of online orders]. As drivers become scarce, volume continues to grow, and inflation and fuel prices skyrocket, it will be more difficult to support. Contemplating a future in which half the population orders goods online so the other half can deliver it is scary, and that’s where residential delivery is heading.
We deeply believe in our next-gen cloud-based platform as a way to reduce crippling supply chain strains while more efficiently utilizing logistics channels — it’s a long-term sustainable model.
The return on investment for our clients is outstanding. Most merchants are up and running within 24 hours, [and] by offering the BOPA option at checkout, these online sellers can expect an increase in conversion over the long term.
[Read: 3 Startups in Fast-Growing Niches Detail Plans to Accelerate Business in 2022]
‘The bigger prize is subscription revenue’ from B2B accounts
Thejo Kote, Founder and CEO, Airbase
There are a lot of various workflows that typically happen in different silos at companies when it comes to spending money. As a spend management platform, Airbase combines onto one platform corporate cards, bill payments, and expense reimbursements that holistically make up companies’ non-payroll spend.
Strategically, we've never wanted to be just a corporate card company. There are a lot of new ones out there, and I've always believed that by just providing the card, rewards, and a line of credit, there isn't enough differentiation.
So, we have always focused on companies’ broader workflows around deploying working capital. We believe that the bigger prize for Airbase is to generate subscription revenue, by solving the complex problem of allowing employees to spend money while giving visibility and control to finance and leadership teams. Our comprehensive and consolidated software workflows are what differentiate us from the competition, and that’s why our customers pay for the Airbase platform.
We are very happy to announce an investment by Amex Ventures, the venture capital arm of American Express.
Our new pilot with them integrates American Express corporate cards with Airbase to give Amex [corporate] customers automation and controls for not just card spending, but reimbursements and bill payments too. We're very excited by this new partnership given the sheer size of Amex's customer base.
The initial momentum has been fantastic. Both sides are very optimistic, and we'll have a much better idea about the return on investment in a few more quarters.
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