What’s the difference between B2B and B4B? It may sound simple, but we have found that reframing your business-to-business (B2B) company as a business-for-business (B4B) company can increase revenues, customer retention, and employee morale. And for one supplier to food companies, identifying as B4B has provided it with a deeper sense of purpose that has ignited innovation and creativity within the organization.
Luker Chocolate manufactures and sells chocolate as an ingredient to other food businesses; one of us (Sergio Restrepo) is the company’s vice president of innovation. A few years ago, he noticed that Luker’s salespeople were largely pushing commodity products with volume discounts and knew fairly little about their customers’ businesses. The company’s B2B mindset meant it measured success based on the tons of chocolate sold — but it didn’t really understand its customers or what could help them make progress.
The company needed a cultural reboot if it was to move away from an unsustainable competitive strategy based on price. Instead of thinking of itself as a business that sold to other businesses, it needed to think of itself as a business that worked for other businesses. Its primary metric of success needed to be how well it helped customers grow and become more successful.
For instance, to help the CEO of a small cookie company grow his business, Luker sent technical experts to help him improve his production process and design a better factory. Luker began sharing relevant market information and new consumer insights with him. It set up a business growth team that provided value-added services — at no charge, for the time being — including an in-house design team that helped the cookie company improve its packaging. That new look for the brand helped it get its products into a major retail outlet in Canada, a new market, and boosted its sales in supermarkets. And Luker collaborated with the CEO to develop a robust pipeline of innovations for his brand that have driven incremental revenue and connected him with potential customers.
In less than nine months, Luker’s sales to the cookie company more than doubled. It no longer discusses pricing with the CEO but rather how both organizations can grow sustainably.
In the B2B world of the food industry, private-label manufacturers or ingredient suppliers that compete on price are always vulnerable to bigger manufacturers that offer better prices. But when companies embrace a B4B strategy, they have a better chance of deepening their relationships with their customers. Price becomes just one of the criteria by which their customers assess value, not the only one. And in many cases, it’s not even the primary one.
This is important because, to every business, customers represent a stream of future projected cash flow. The value of that cash flow depends on two variables: size (how big the cash flows are) and longevity (how many years the company can depend on it). Companies that integrate their activities around their customers’ success and monitor this as a key metric will generate large and dependable cash flows.
Reframing Your Company From B2B to B4B
Moving from the transactional mindset of B2B to the collaborative mindset of B4B means asking different questions about growth, pricing and value, talent management, and more.
Companies with the B2B mindset ask, “How much can we sell to this customer to grow our business?” and “What’s the lowest price we need to sell in order to make money and stay competitive?” B4B means asking, “How much can we help our customers grow?” and “What’s the most value we can provide to this business while remaining sustainable?”
“How many products can I sell to this company?” becomes “How can we cocreate new products with this customer and grow together?”
Rather than focusing on how to incentivize sales executives to sell more products and services, a B4B company considers how to train them to become expert, high-value business consultants for customers. And instead of asking what might boost sales in the current quarter, leaders should be asking what new service could complement their product offering and how to create so much value for customers that it becomes very difficult for them to defect.
Likewise, a key metric for business development may not be how many new proposals your business has sent out in a given period but how many new customers are reaching out because of what existing customers are saying about you. And instead of asking how business development can be more aggressive, ask how you might make it easier for new customers to find you and start working with you.
Once you shift your mindset to seeing the success of your customers as key to your company’s long-term strength, you open the door to more expansive thinking about how your company contributes value in all of its relationships.
B2C businesses that frame their mission as working for customers rather than selling to them will focus their thinking on how they can help consumers succeed with the jobs for which they were hired — rather than getting fired and replaced by a competitor.
The same principle applies to relationships with suppliers. The business-for-business concept helps companies understand that they are part of an ecosystem and should consider the success of everyone in the system.
In the B4B world, collaboration, cooperation, and mutual benefit become the central themes that improve competitiveness. “Businesses working for other businesses” is a logic that helps improve the business environment, boosts employee morale, and ultimately facilitates economic growth. As more organizations collaborate and share resources, organizations become more efficient.
Going even further, we believe that if the B4B ethos can permeate business culture, it can also shape leaders’ choices in ways that benefit our communities. For instance, as the world grapples with climate change, which can in large part be attributed to the externalities of how businesses operate, a B4B mindset can help refocus our efforts toward delivering value for all — other businesses, our customers, and our communities.
The past two years of living through the global COVID-19 pandemic have taught us many lessons about the interconnectedness of the world. Some of us might be tempted to withdraw from this complexity, to focus on ourselves or our organizations and what we imagine we can control. But by adopting a B4B mindset and focusing on helping others, we end up creating much more value — both for ourselves and for the world.
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