B2B represents an enormous opportunity for MVNOs in the US, but many MVNOs are reluctant to approach this market, whether that’s due to the complexity, or limiting beliefs about the ability to serve these customers.
This topic was explored in a fascinating discussion among Alex Besen, CEO, The Besen Group, Rebecca Stone, Director, Global Channel and Distribution Sales, KORE Wireless, Trevor McLaughlin, CEO, Networkfx, Jeff Holley, CEO, boom! Technologies, and Jonas Cedenwing, Founder and CTO, Telness.
Moderated by Alexander Tsao, the panel talked through the way for MVNOs to enter the B2B space and unlock opportunities for growth in an exciting new segment of the market.
Why is B2B such a great opportunity for MVNOs?
The B2C space is becoming increasingly saturated and commoditised. With some of the trends discussed throughout this eBook, that may continue to become an even bigger challenge for MVNOs in the coming years.
With so much talk of “niching down” and differentiating your offering in this eBook, the B2B market is an opportunity for MVNOs to do exactly that with an untapped group of customers.
“Especially in the US, the B2C market is very saturated, but the B2B market isn’t,” said one speaker. “So, those B2B customers give you a niche that’s very attractive.”
MVNOs across Europe have recognised the value of working with B2B customers, as around 80% of MVNOs that launched recently were B2B, taking advantage of benefits like:
- Greater margins
- Longer contracts
- Premium prices
- Lower churn.
Why are these advantages present when targeting the B2B market? As mentioned in a previous chapter, this connectivity is critical to the successful running of a business today, so these organisations are dependent on the service to survive.
Additionally, however, businesses have sector-specific needs, more complex requirements, and larger scope, making them ideal customers for MVNOs willing to niche down.
Another speaker said, “In the B2B space, you pick a vertical, become an expert in that sector, and you become their trusted advisor, so the customer relationship is more of a long-term strategic partnership. Because they’re businesses, they’re not looking to buy on lowest cost, you actually have to do a lot less “selling” with these customers than you probably do to each individual consumer, because they have far less options.”
And the total addressable market for B2B is huge, with SMEs making up more than 90% of businesses in the USA.
What’s holding MVNOs back from approaching the B2B market in the US?
A better understanding of some of the key challenges you’ll need to overcome in order to succeed in the B2B space will help you determine whether it’s the right move for your business.
1. Caution
There is a degree of fear, or at least caution, when it comes to entering a completely new, unfamiliar part of the market.
Working with B2B and B2C customers is very different, and it’s understandable that fear is holding back many MVNOs.
“It’s scary to go into something different,” said one speaker. “If you do, it’s natural to worry if you’ll lose sales on the consumer side, spend money hiring new employees, go through too much trial and error to be profitable, and so on.”
But the panel suggested the opportunity in the B2B market is worth the risk if you take the right strategic, customer-centric approach
2. Education for customers
Educating customers in the B2B space on the value of working with MVNOs is another challenge holding many back.
One speaker explained, “It can be hard to find the right ways to get in front of these B2B companies. But you also have to speak their language, address their very specific needs, and gain their trust as an expert in their vertical.”
The panel suggested a strong, relevant value proposition tailored to your target audience is crucial to overcome this problem, as it is in the B2C space.
Additionally, understanding the nuances of building successful relationships with B2B customers is another important area of focus for MVNOs targeting this niche. Those nuances include distribution, where B2B customers are used to traditional sales and distribution processes, instead of the self-service approach that has become standard in the B2C space.
Of course, that self-service element can still be introduced at a later stage with B2B customers. One speaker said, “To get into that market, use the traditional distribution channels. But once they’re in your system, and they see self-service is so much easier, whether to cancel a subscription for an employee or add a new one by themselves without your help, they’ll start doing that over time.”
3. Cost
The costs of working in the B2B space can also make MVNOs hesitant. However, again, with the right strategy, the opportunity may outweigh the costs for many MVNOs.
A key part of managing this challenge is working with the right partners and leveraging support from them.
Examples of vertical opportunities in the B2B market
There are many verticals that MVNOs can target and serve with sector-specific products and services, especially with the growing use of IoT devices in almost every industry. Still, some sectors that have the greatest need for MVNO services currently include:
- Healthcare
- Fleet
- Utilities
- Asset monitoring
- Manufacturing
Of course, there are many more. If you’re an MVNO considering targeting the B2B space, the same advice given earlier applies here:
Go deep into customer research and get to know your target audience extremely well, so you can become the best possible solution to their specific problems.
The panel emphasised the importance of targeting specific verticals, developing extensive knowledge and expertise in that sector’s unique requirements and conventions, and becoming the MVNO expert for those businesses.
Another niche within the B2B space is small and medium-sized businesses who need UCaaS and VOIP, which is another under-served market in the US.
“That could be hairdressers, carpenters, or any other business that wants to have a centralised number, to publish on the website,” said one speaker. “They don’t want to get calls 24/7, so they distribute the calls depending on their configuration. They usually want something they can self-configure and self-maintain, so that’s another opportunity for MVNOs to meet a need as well.”
Partnerships are just as valuable for B2B MVNOs as B2C
As touched on in an earlier section, much like for MVNOs working with B2C customers, partnerships are critical for B2B as well.
The panel agreed that an essential part of your success in targeting verticals in the B2B space will be forming healthy, valuable partnerships to help deliver better products and services to these business customers.
Select the right partners in each key area based on your business model, your technological capabilities, and the verticals you decide to target.
What does the opportunity with private networks in B2B look like?
Many enterprises and organisations need their own secure networks, whether that’s on-site like a hospital or across large geographical areas for businesses in other sectors.
Everyone today needs connectivity, so the use cases and the vertical opportunities with private networks are literally everywhere across the B2B space.
One speaker said, “Now you can take all the different technologies and segment them out, and utilise them most efficiently for the specific use case that you have in your vertical. Hotels would have very different use cases to manufacturing. Some enterprises will need more security, where others would need more speed. But once you have the capability to deliver, you simply right-size and pick which lane for your target customers. That’s where the private networks fit into the whole equation.”
Key considerations for MVNOs entering the B2B space in the US
The panelists had some important considerations that they recommend you make if you’re planning to enter the B2B space and begin working with business customers.
1. Opportunity costs and ROI for businesses
One speaker said, “One of the most challenging things for MVNOs working with B2B customers is to determine the opportunity cost for the enterprises, and the ROI. To define that is going to be different in each vertical, and that’s an important consideration to make when you’re planning your strategy.”
2. Educating B2B customers
Another speaker added, “Another big challenge is getting these customers to understand why they should be working with an MVNO, and why they could leverage one for connectivity, quite literally around the globe, as opposed to going to each carrier in-country alone. You have to educate these customers to think about it differently.”
3. Technical differences between B2C and B2B
A speaker explained, “On the technical side of things, you really need to choose your platform to be B2B-specific. You don’t become a B2B MVNO just by supporting multi-line B2C, as you’ll need more than that. You need permissions, hierarchy, where you can have employers manage the employee subscriptions, cost structures as well, so employees can’t incur costs without having approvals and set limits. There’s a lot more to managing that than B2C.”
Key take-aways and guidance for MVNOs
There are tremendous opportunities for MVNOs to grow by targeting the B2B side of the market in the US, if you take the right approach. Perhaps the key take-away here is to understand the differences between B2C and B2B.
Some fundamentals of B2C still apply, like gaining deep knowledge of your target audience and tailoring your offering to those customers. But, clearly, there are some very unique nuances and conventions of working with B2B customers – both technical and cultural – that you must get a strong grasp of before trying to approach this space.
