B2B App Marketing – Creating The Product (Part 4 of 9)

By now you’re probably starting to think B2B is looking pretty good…so where do you start?
You’ve learned what B2B is all about (part 1), the mindset required to get started (part 2) and how to identify your market (part 3). The next natural step is learning what exactly you should be be building.
And selling 🙂
That’s an important distinction – you’re not just creating something for yourself, you’re building something that you’re actively selling. The reason I bring this up is because it opens you up to realizing that often an “out of the box” solution is just as good (or better) than the traditional app products.
When you think about it that way, you realize how much more B2B is about the model and not about the product.
An example of this is in software. Let’s say you know hair salons need a really good scheduling software solution. You can either build something yourself to sell them…OR you can just sell them a copy of the leading hair salon scheduling software out there and fold it under your company.
You pay the original software company a nominal fee and charge the hair salon whatever you’d like. You make money on the difference.
In this section, you’re going to learn:

• What type of model you should choose
• How to build value of that product
• How to organize your team to support the product
• When and how to use games
• Functions to include

By the end of this, you will have a clear understanding of the product you will be using in your B2B business!

What Type of B2B App Model You Should Choose

There are three “buckets” to choose from when it comes to the B2B business:

1. Custom solution for each client
2. Custom build template used for clients
3. Existing software that you resell

I want to give you a quick overview of each in hopes that it helps you make a more informed (and profitable!) decision.

1. Custom Solution

This means that you will be creating a brand new app for each client. Surprisingly, this type of model is popular, especially among creative types.
In my lawyer website days, this was the local web firm that charged $30,000 for a website and had a team of designers who would create something totally from scratch for the client. They might use a common CMS like WordPress or Drupal, but a ton of the functionality and layout was all custom built.
These projects took a long time, often went way over budget and rarely left clients overjoyed with happiness.
On the other hand, this allowed the web shop to have a really “cool” brand and show people that they could build something very specific and listen to the exact needs of the client.
With B2B apps, this would be building a custom app for each new client you close. This is not unlike owning a development agency – you just focus on one niche (as best you can).
Personally, I would not recommend this to anyone reading this blog. These models are VERY hard to grow over the long term unless you can land some whales (like national clients who have long term retainers).
On a call a few months back, I was talking to Perry Belcher (Co Owner of Digital Marketer) about the app business and explaining how source codes worked. He told me that he works with two house development firms.
One makes $3M a year, the other makes $400M a year. The only difference?
The $400M firm does no customization.

2. Using Templates

This is the obvious next option – get a source code (or build your own) and use that as your de-facto product for your sales.
You offer less customization but know that you could easily update the code if you need to in order to cater to specific clients. Doctors needs X function, plastic surgeons need Y function.
There are some good reasons to use a template: you own the intellectual property (complicated, but essentially you would have the “master” template that has a lot of value in the eyes of an exit), it’s vastly more scalable than custom builds and you can customize the code as needed.
You have something that is YOURS but also has the upside that if you need to get into the code for any reason you can.
That being said, there are some obvious down sides as well: you’re responsible for all the bug fixes and updates (usually), your product offering can look “stale” compared to custom apps and your prices are not as high as with a custom app.
If you have something built or have a dev/design team on staff, this can be a great solution.

3. Reseller

This is the least “cool” and the easiest to scale. You take an existing platform like Biznessapps.com and then “reskin” the templates for the client you get.
Most of you out there probably like this the best because there are the least pieces involved. And you’re right.

Here’s how it works: you signup for an account on the platform, then for each new “build” you pay an additional license fee. Then you turn around and sell that license to someone else – your local massage therapist or florist. You charge them a flat rate + ongoing fee and then reskin the template for them. 
You make a profit on that deal (wipes hands).

Upside: you get a turnkey platform that is constantly updated from the inside out (meaning they take care of all dev and support stuff), you spend 10x more time selling and prospecting, you need very little money to get started.
Sound like free money? Well, it’s close. But there are a few…
Downsides: you own nothing except the cash flow and relationships (they go out of business, you’re done), you are NOT unique so you will need to basically turn into a sales machine + win on the numbers, there is little barrier to entry which means if it works you can expect competition very soon.
If all you want to do is focus on sales and marketing tactics to get new leads, this is the way to go.
Whichever path you choose is secondary to how well you run the business, but I would urge you to focus on #2 or #3 – #1 is just a pain.

Building Value For Your Product

So – you’ve figured out what MODEL you’re going to use. Now you need to determine exactly how to take the product and make it so that it has immense value for your potential client.

The key here is to take whichever model/product you chose and think of it as the best possible solution for the client.
For example, if you choose to resell a platform, you are NOT competing with a custom development firm. Your client is not in the market for a custom solution – they are in the market for an app solution. Your competition is other people selling app solutions at the same price point with the same value proposition.
The reason I’m telling you this is to make it crystal clear that what you are selling is not trying to be something it’s not. You’re selling a template, not a vision. If someone says “I want it to do XYZ” you tell them that you’re happy to introduce them to a local firm who will do that for $10K.
Once you accept this, you will begin to realize what an amazing offer you have. It’s not cheap or crappy, it’s the RIGHT solution for the RIGHT client.
You start to build value from this mindset.

When I was selling lawyer websites, people always told me I should charge more. “Your competition is charging $15,000 for a website, so should you!”
But I always had a weird feeling about that.
One day, it clicked – I shouldn’t be in a room where people look at the value of my offering compared to a $15K website, I should be in a room where people are STOKED that I have a $4K solution.
It’s the same thing as when I started selling source codes to people like you. The value to Customer A who has a $100,000 budget was “wow, what a cheap solution” but the value to Customer B who has a $2,000 budget was “YES! This is amazing.”
The same is true in B2B. You must leverage that value switch. Instead of trying to show how much cheaper you are than the custom $50K solutions, show how much epic stuff the client gets for $3K.
Make sense?

When you have your product, make a list of all the awesome things it can do. If you resell on BizApps, they give you full sales materials AND all the information on their website – you just need to spin it towards your client.
Focus on how much value this app has, how much the client is getting for such a low price. Full support, ongoing updates, ASO advice, complete uploading to the app store, full design services. The list goes on.
The key takeaway here is to find clients that want an APP, not clients that have an APP IDEA.
People that want apps want the features, functions and value. People that have an app idea want the glory, the dream and the ego boost (and the $50,000 bill).
Once you start building value this way, you’ll start selling a lot of B2B apps 🙂

How to Organize Your Team to Support the Product

Ok. Now we’re onto something.
You have your model, you know how to position it to your specific industry and clientele that will show maximum value.
Now you need some people to help you.
Whether you choose #2 or #3, you will still need people to help you out, specifically developers and designers. You will be going out and selling the apps to clients, then turning around and having your team make these apps happen.
I’m going to assume that most people are going to try model #3 (reselling) and will explain this section in that light, but it’s applicable to any of the 3 models.
There are 4 main positions that need to be covered:

1. Sales – get new leads, close deals
2. Development – package the code, implement new graphics,
3. Design – create custom graphics, get/organize photos, potentially create or integrate logos
4. Management – make sure this all happens on time

I keep saying  “you will out there selling” because that’s usually how it goes (and the hardest to outsource from the start since that’s where the money is), but realize that you can assume any of these roles if you hire or partner with the right people. Most likely you’ll be doing Sales and Management at the beginning.
This may look familiar…because it’s basically the same setup as reskinning. The only difference is that instead of paying for each project yourself, you’re making a few thousand bucks! haha.
The most important piece to this entire puzzle is having CLEAR AND DOCUMENTED operating procedures. This will make or break your business. Remember – B2B is built on processes.
So, you need to have someone who will get leads (you), someone who will organize and deliver the code (developer), someone who will get graphics dialed (designer) and someone who will make sure this all gets done (you until you have a lot of clients).
Good?

When and How to Use Games

A lot of people ask me about using games in B2B apps, which is a great question.
For the most part, games are not going to work in B2B. Think of it more as a “one time” event as opposed to a real, repeatable business.
Games typically work in the following B2B situation:

• Business has a huge audience
• They have given the audience as much stuff as they can to keep them excited
• Getting a white labeled game makes their audience even happier
• They are willing to pay for that

Think about how many businesses you know that have this type of problem. Probably not many. Maybe a local club team for triathletes who has 3,000 members? Even that is a stretch.
My point is that you should have the game option as a “yeah we could do that” option where you REALLY charge the client because it will be a custom job vs making it your business model.
If you want to go games, you should focus on 1-2 big clients and do big deals with them…not the mass market B2B model we’re talking about here.

Functions to Include

The last piece of this is talking about what functions you’ll include in your product.

If B2B is so ‘template,’ obviously there is a winning source code, right?
Not quite.
I wish I could sit here and list off a bunch of core functions you should include in your app to make it a total no-brainer, but that’s kind of like telling you that some source code will definitely make you a ton of money in the app store.
Typically, you’ll be including functions as it relates to the business information. Specifically information that will help people find and contact the business. Examples include:

• Map integration
• Social media integration
• Contact form
• Push notifications
• Payment options
• Email opt in

The list goes on and on. In B2B, the “nuts and bolts” are more important than the bells and whistles. People make decisions based on what will make them more money, which cuts through the fluff quickly.
My best recommendation is to use a model from Biznessapps.com  and then add any additional functions based on feedback you get from clients.

Part 5 – Getting B2B Leads

Yowza! You’re almost half way through this blog series on B2B app marketing. In this post you learned:

• What business model + product model you should be using for your business
• How to add big value to your app (and separate yourself from competition)
• How to setup and organize a winning team that has killer systems in place
• When and how to use games
• Functions to include to get started and grow

After reading parts 1, 2 and 3, you also know:

• How to get started in B2B
• How to think about B2B (vs building apps for the app store)
• How to pick your B2B market

In our next part of the series, you’ll learn one of the most important parts of the business – getting leads. We will walk through how to do inbound lead generation (leads find you on auto pilot) as well as outbound lead generation (you control the size of your growth).
Here’s the link to Part 5 – Gone Whaling (click here)
 
See ya,
Carter