You’d think that the Great Recession, only 10 years ago, would have made it clear that the businesses that thought they were somehow insulated because they were B2B …weren’t! They took a big hit with everybody else because the business they were selling to was selling to another business that was selling to the general public. When the general public ceased buying, all the so called “B2B” businesses up the line of dominoes collapsed.
This time the general public was in effect ordered to stop buying certain products and services that required personal contact for safety reasons. But the same dominoes fell all the way back to the “insulated” B2B businesses at the top.
We became painfully aware of the fallacy of B2B when we were building Barefoot Wines. The product we made was destined for our ultimate consumer, the general public. But we sold to a distributer, who sold to a retailer, who sold to the general public. We could have said we were done when the first sale was made to the distributor, and in fact, we suffered from this delusion for the first few years.
But as time went on and sales stalled, it became more and more clear that if we really wanted to grow our brand, we had to do much of the work our distributers would not (even though it was in their financial interest). Not to mention, most of the work we thought our retailers would do. What a wakeup call!
It wasn’t long before we realized that our distributers wouldn’t re-order from us unless their retail clients reordered from them. And they wouldn’t re-order unless the general public was able to access our products and buy them. So – next thing I know is I’m in a suit and tie on the linoleum floor of a supermarket in Florida with a pricing gun in my hand, pricing my own products! Even the retailer needed help with our products so they would get sold or reordered. But it went deeper: We also had to bring in the customers from the general public to purchase our products at the retailers.
To say the least, we were not insulated from “that kind” of work just because we were B2B. We began to realize that selling B2B meant making sure the business who bought our products also got orders for our products from their retail customers and that our retail customers got purchases from the general public. So much for the B2B insulation fantasy!
So, why is that lesson so important right now? Well, for one thing, we are already seeing the collapse of supply chains that have no more general public customers. Plus, now many of those so-called B2B companies are rethinking the independencies of that chain and thinking about what they can do to help their “downstream” customers reposition and solve the delivery problems brought about by the lockdown.
If restaurants, for instance, can’t have sit-down customers, what does that do for restaurant supply companies? If commercial spaces are no longer needed because employees are working from home, what does that do for commercial real estate and all the businesses that sell to commercial real estate? And the cause-effect chain goes on. It’s interesting to note that in the early days of the Great Recession, we were told that the collapse was strictly limited to the Real Estate market. It wasn’t!
So basically, whatever business you are in, you are not insulated. There is a “C” at the end of that B2B2B string that’s driving it. We must be our brothers’ keeper when it comes to our own welfare.
The businesses that are being hurt right now need our support. Without it, those businesses can’t buy from us or our customers. Let’s learn the lesson this time and realize there is no such thing as B2B, It’s B2B2B2C! We are all in this together – in so many ways!
