How Premium Services Function Differently For B2B vs. B2C Businesses
Episode 652: Show Notes
Speaking to hundreds of people on a regular basis about their business has given us so much insight into which structures work for which industries. It’s what positions us to advise clients entering the Incubator who find themselves at a fork in the road of how to move forward. We want to give you some guidance, and let you know what we would do if we were in your shoes.
None of these options are wrong, it’s all centered around what works best for you, what feels fun, and what facilitates you playing to your strengths. There are plenty of scenarios that work amazingly for some people, and don’t work at all for others. The question to focus on is not what is right, and what gets the greatest return, but what feels attainable for you. If something is not in step with who you are as a person, it’s not going to work!
More often than not, it comes down to the question of whether you have set yourself up to be successful within the options that you have available, and the limitations that they present. Maybe you need to pivot, maybe you need to reassess your offer, maybe you need to reach a new audience, or maybe, you need to re-adjust your expectations. These are the conversations we are having a lot with our audience, and we never get tired of them!
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Two Options You Have at All Times to Grow Your Business in Terms of Volume of Sales
The volume of sales is determined by the number of clients you serve, and the rates you charge. If you want to work with fewer people and have a bigger impact, you have to charge more money for that service. If you stay at a certain price point, the only way to hit your goals consistently is to play the volume game. It might seem like a no-brainer to take the first route we mentioned, but in reality, tons of industries rely on volume, and that structure totally works for them! Hair stylists, dog groomers, pest control, and beyond, there are just so many areas where a booked-out schedule needs to be the goal.
There’s no right or wrong approach to this. It’s all about where your strengths lie. Where do you want to put your energy? If you are so incredible with clients, and have no problem attracting new relationships, then volume, whether you’re attracting loads of new work, or working on a retainer basis, could both work for you. It’s all about choosing where you want to put your energy.
How to Structure Your Time as a Premium Service Provider
If you’re delivering a service at a higher rate, that solves a lot of problems for your client, there are three basic structures you can use. You could be doing one-time projects, working according to a retainer, or charging an hourly rate. We have worked with service providers who prefer to put a time limit on some of the projects that they do, keeping a small amount of retainer clients for consistency, and scratching the creative itch with project-based work.
If you can help people to get clear on why they are making an investment, what problem they are solving, and what kind of returns they can see, their willingness to pay a higher price point increases. There are so many opportunities to be pretty skillset specific, and to achieve an obvious return on investment.
The Main Difference between B2B and B2C Sales
We are in the business of noticing patterns. More often than not, B2B sales consistently tend towards relying on more volume, rather than the premium model. We don’t know exactly why, but speculation tells us that businesses have less disposable income than individuals. A B2B transaction often takes more consideration, involves more people, and requires more decision-makers. B2B clients often need to prove a return on investment for their purchase. You don’t typically have to prove that with B2C.
Research into why people in the B2B realm versus the B2C realm actually make their decisions shows some interesting results. An individual will often make a purchase based on buying with the view that buying the product says something about them that they like, and that is convenient. B2B clients are looking for solutions to their problems. They’ve looked at the options and they are making a strategic decision.
Which Industries are Best Suited to a Higher Volume of Clients at a Lower Price Point
When it comes to a volume-based business structure, there is an obvious ceiling to what you can deliver as an individual. Once you’ve shaved down the time it takes to deliver the service, you can look at bringing in more people to help you deliver a greater volume of work to a higher volume of clients. In our experience, the industries that flourish the best under this structure are health and beauty. People are already paying so much for health insurance, that there is a clear limit to what they are willing to allocate to services that fall outside of that, especially when it comes to alternative health.
A mistake we often see people making is where these service providers begin to build upskilling others into their model. The problem lies in the fact that you’re targeting clients who are students, and you’ve started to veer into the B2B space with your offering. Our solution? Seek out clients who are more advanced, and consult with clients who already have a successful model and are looking to improve it.
Quote This
If you stay at a certain price point, the only way to hit your goals consistently is to play the volume game.
Highlights
Two Options You Have at All Times to Grow Your Business in Terms of Sales. [0:09:03]
How to Structure Your Time as a Premium Service Provider. [0:10:31]
The Main Difference between B2B and B2C Sales. [0:13:29]
Which Industries are Best Suited to a Higher Volume of Clients at a Lower Price Point. [0:27:02]
ON TODAY’S SHOW
Abagail & Emylee
The Strategy Hour Podcast
We help overwhelmed and creative entrepreneurs break down their Oprah-sized dreams to create a functioning command center to tame the chaos of their business. Basically, we think you’re totally bomb diggity, we’re about to uplevel the shiz out of your business.
KEY TOPICS
Problem Solving, B2B Sales, B2C Sales, Problem Solving, One to One Business, One to Many Business, Business Structure
