Small business owners can join forces for purchasing and marketing power.
The concept of group buying online is still in its infancy, yet consumer web-sites like Groupon have really shown what’s possible. Small business owners have had to become more resourceful in the current climate, using social media channels and searching online for deals when making purchasing decisions.
This online community of savvy buyers has created the perfect market for the concept of business to business group buying. A clutch of B2B group buying sites has now emerged, having learned lessons from some of the mistakes made by the big consumer sites.
So, just how does B2B group buying work?
SME group buying sites offer exceptional deals negotiated with suppliers who know they’ll get exclusive access to large numbers of potential customers. Only when a deal reaches the required number of SMEs willing to buy are they committed to fulfilling the offer at the price they’ve proposed, giving suppliers control over structuring a deal which covers overheads whilst acquiring new customers.
This is an incredibly low risk form of marketing, with guaranteed ROI in terms of immediate sales and then the opportunity to forge relationships with these new customers going forward.
Suppliers might include printers, web designers, SEO experts, regional press titles, business insurers, recruitment specialists, leaflet distributors, photographers or taxi firms for example – any area of purchasing interest to a small business owner.
Tips for suppliers thinking of running a group buying offer
• Use the opportunity to demonstrate value and expertise, consult with new customers and get to know their business.
• Give group buy customers the same service and value you would any other customer. Make them want to spend the full price with you going forward; don’t show them what they get if they pay half.
• Use every new customer as an opportunity to gain valuable feedback, give them referral incentives and introduce them to your social media platforms creatively - don’t point and expect them to join.
• Look at what you can realistically take on, financially and operationally, before running ‘uncapped’ offers. Buyers won’t come back if human contact is poor and they receive little attention.
From a ‘buyer’ perspective, by connecting a community of small businesses together B2B group buying sites give each company the buying power of a much larger organisation. This economy of scale provides the opportunity for members to try new products and services, which help a small company expand their business - from online marketing expertise to advertising in the national media.
It may also be as simple as saving money on a purchase you already make or cutting down the time it takes to research something new and check the quality of suppliers - the group buying site has done the hard work for you.
Marketing for a small business can be a bit of a hit and miss affair. SMEs must evaluate the time it will take to research new forms of marketing against the potential rewards, and then assess the risk, financial and otherwise, of giving it a whirl without any guarantees of a return on their investment.
Group buying presents an exciting development for SMEs facing the pressures of a limited marketing spend and the need to keep costs lean in the current climate – an extremely low risk way to market your business. The whole business community will no doubt prosper.
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