MarketAxis

Steps to Use Business Ecosystems for B2B Growth

The simplest kind of B2B sale is direct, meaning that you sell your product or service to your customer and interact with the buying organization directly. But there are many more ways to sell and generate revenues as digital technologies have enabled the creation of business ecosystems. It’s a good time to understand how ecosystems work and reflect on whether they can drive your business growth and why they should be a part of your B2B marketing strategy today.

An ecosystem delivers a product or service to the customer through a network of suppliers and enablers. The importance of ecosystems as B2B marketing channels can be estimated from research by the Demand Gen 2022 survey that shows that 82% of B2B leaders plan to add more partners this year. It’s also interesting to note that Forrester estimates that 75% of world trade flows indirectly. You may miss out on substantial revenue opportunities if you don’t have an ecosystem play in your B2B distribution channel. 

Business ecosystem example

B2B business growth through ecosystems

Let’s understand this with an example. Imagine there’s the founder of a mid-sized company who’s looking for a new payroll system.  So she searches online and finds a portal that lists all kinds of business applications. She reads the descriptions, reviews, and ratings of various payroll software and decides to purchase one.

This means that the creator of the payroll system she chose has earned from her purchase. The portal has likely earned revenue from this transaction. The payment gateway that enabled her to pay conveniently has also earned something. If she needs certain infrastructure such as cloud hosting for this payroll application,  the cloud hosting provider has also generated revenue. The payroll software maker may reach out to her offering services or expert consulting, adding revenue from services on top of their product sales. 

These are just some of the ecosystem players that I could think of,  and you may be able to find even more. There are many new models of delivering value to users that have become valuable B2B marketing channels. You need to make a strategic decision about what role you will play in these ecosystems.

Sign up for the B2B Growth Essentials Course

Steps to define your ecosystem strategy

1. 1. Understand the ecosystem completely and define your role in it.
      
      It’s a good idea to start with mapping ways in which your target audience may fulfill their requirements for products and services in your space. Are there any platforms, such as apps or portals, involved? Often these platforms are aggregators of offerings from multiple providers. What role will you play on these? Do you need to be present on the platform for its reach to your target market, even though this means a direct comparison with competitors? Or can you visualize a new ecosystem that you will design and own?
   2. Ensure maximum value and a seamless experience for the buyer
      
      The ecosystem will work and flourish only if it adds value for the buyer. Let’s consider Udemy, a platform for online buyers. When I created my B2B content strategy course, I chose to list it on Udemy. The reason Udemy has almost 50 million users is that these users can conveniently browse and search for the learning content they want. They can watch previews and read ratings and reviews before they sign up. They can get a refund if they don’t like the content. A platform like Udemy is popular because it’s frictionless for the buyer, and so it offers market reach for course creators like myself.
      
      If I choose to create a new ecosystem in the learning space,  I must also ensure this seamless experience and maximum value for users.
   3. Identify the right ecosystem partners.
      
      You need to identify your potential partners to get started on a business ecosystem. Think about those that have access to a large target market for you, usually marketplaces and business apps.
      
      If you plan to create a new ecosystem, you will require all the providers and enablers who will together deliver the maximum value to users.
      
      If your product or service requires infrastructure, explore partnerships with the manufacturers of that infrastructure. For instance, if you sell software that requires a server or a laptop or a tablet or a smartphone or a camera, then manufacturers of those devices could be your ecosystem partners. They may want to add your software as an advanced feature for users to create a competitive edge.
   4. Create win-win value propositions
      
      Business ecosystems require processes and technologies that enable all participants to operate efficiently and maximize revenue generation. Create win-win value propositions for revenue sharing and seamless functioning.
      
      Think through aspects of how you will share data with ecosystem partners. User data and any intellectual property sharing are highly sensitive issues. Consider all these carefully and have the right agreements in place to get the best out of your business ecosystem. 

I’d love to hear your thoughts and experiences with business ecosystems. What has worked for you, and what are the challenges you’ve faced. Do drop a line.