Most Caribbean tech businesses tend to focus on selling to individuals and neglect the B2B space. Here are four reasons why B2B should be given more attention.
Among Caribbean tech startups, it has been observed that to a considerable degree, they tend to focus on providing products and services for the individual consumer. For many entrepreneurs and startups, the business they seek to develop is frequently based on their own personal needs or desires, that of their colleagues, friends and family, or what they perceive might be of interest to others. Little thought is given to the needs of the business community.
Further, in the Caribbean, and especially with regard to mobile/cellular applications (apps), which is a popular segment in the tech startup space, those ventures tend to struggle to generate revenue, as the business models adopted tend to rely on advertising, or a scarcely selected premium version. Consequently, these businesses tend to flounder, and never move beyond the early startup phase. It could thus be argued that ventures would have a greater chance of longevity and success if they were geared towards businesses and organisations. Four reasons why Business-to-Business (B2B) ought to be targeted are outlined below.
1. The mass market consumers are fickle
To a considerable degree, many Caribbean tech businesses that are focussed on the mass consumer market are targeting a young demographic, around 15–25 years old. Generally, this age group not only has limited funds, compared with our segments of the population, but are rabid consumers of technology with relatively short attention spans. Hence, as can be seen among the big tech brands worldwide, they constantly have to iterate – add fun new features or capabilities – in order to remain visible and relevant.
2. Competition is stiff in the mass consumer market
Again referring to the big tech brands, it can be readily observed that stiff competition exists, which is also driving the speed at which they release new products. In the mobile/cellular apps space, the situation is more pronounced, as there has been an emphasis is on free apps. As a result, in apps stores, where millions of apps are available, it is likely that there will be several free apps providing a specific service, and to some extent, it can be difficult to distinguish on from the other.
3. Longer relationship likely with business customers
Following from the fickleness of the individual consumer, and the competition that obtains across multiples segments of the market, customer loyalty to a particular brand or product tends to be limited. For business customers that intend to roll out a solution across an organisation, be it hardware and/or software, it is likely that they will be prepared to work with the vendor, supplier, or manufacturer (the seller) over an extended period of time, not only to maximise the returns of their initial investment, but also because to minimise the disruption that is inevitable when a major change is implemented
4. More lucrative arrangements likely
Depending on the organisation, its size and needs, it may require specific features or functionality, or that a particular product be customised, or that a certain level of aftersale service be included. All of these “extras” not only allow the seller to add value to the customer, but also can make such arrangements quite lucrative for the former. For example, it could include not just the initial price of the product or service, but the cost for whatever enhancements that are made, and even a maintenance/aftercare arrangement over an agreed period of time.
Image credit: Flazingo Photos (flickr)
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