Understanding Basics of a C2B Business Model

Consumer-to-business, or C2B, is a type of business model where the customer provides a service or product to the business. This is the reverse of the typical business-to-consumer model (or B2C), in which a company provides a service to customers through the sale of goods and services.

The internet and social media make a C2B model possible by connecting customers who can offer their marketing services to companies for a payoff. C2B business solutions are often used to drive business to a company’s e-commerce platforms. Some examples of C2B marketing include reverse auctioning, affiliate marketing, and on-commission advertisement space.

A B2C business markets and sells directly to customers, while C2B businesses rely on the actions of an intermediary—the consumer—to market their business. The main difference between B2C and C2B is that the C2B model gives more power and control to the consumer, and relies on them to provide value to the company, rather than the reverse.

C2B solutions offer just some of the following benefits.

• Reverse auctions: Reverse auctions allow consumers to name the price for a product or service they want to purchase.
• Affiliate marketing: Affiliate marketing allows end-users, often influencers, bloggers or publishers, to lend a company their platforms to market specific products on a commission basis. For example, a food company may invite a food blogger to include a new product in a recipe. When the blogger links to the product in the recipe, the business may offer the blogger a percentage of the sales that were driven from their site.
• Advertisement space: C2B advertisement space allows end-users to receive a commission of the clicks on a different company’s ads that live on their site. Users can tailor the ads appearing on their page to include businesses similar to theirs, which increases the likelihood of their audience click-through.

There are many advantages to a C2B business model, including:

• Improving consumer insight: The benefit of a C2B model is that your customers are marketing for you, and reaching a customer base that is reflective of your accurate demographic. You can also use the information from the customer’s campaign as market research.
• Brand loyalty and awareness: Customers are more likely to trust the word of other customers than of large companies. C2B marketing can broaden the reach of your company and instill trust in your consumers.
• Product development: In a C2B business model, consumers have more opportunities to provide feedback about which products or services they like. This allows small businesses and startups to learn what products are most desirable for consumers, and to develop their products accordingly.
• Automation: Particular features can be automated for a C2B business, such as direct payments, facilitating easier connections between consumers and businesses.

There are a few possible disadvantages of a C2B model that should be considered, before embarking on a C2B marketing effort:

• Might be unpredictable: Traditional business models like B2B and B2C are reliable business models that have been used for years. C2B models are relatively new and can be unstable. Relying entirely on a C2B model could be a risk in the long term because you’re betting on a customer's marketing efficacy, which you can’t control as a business owner.
• Negative consumer responses: Relying on a customer’s services for your business also means opening yourself up to negative feedback. Be prepared to mitigate any criticism without shutting down the channels of connection you've established with your consumers who provide your company value.

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