Deals Come to B2B

When it comes to daily deals, the mind immediately wonders to discounts for leg waxes. But what about $25,000 worth of cloud computer services?

Ajilitee, an Illinois-based information technology consulting company, last month used Groupon for a half-off deal for either  a “cloud opportunity map or business intelligence audit. The deal was $25,000 worth of services for $12,500. By many accounts it was the most expensive ever run on Groupon.

To be sure, the overwhelming amount of the daily deals market is still for consumer services. But more and more businesses are exploring the model in order to reach other businesses, like in Ajilitee’s case for some big-ticket items.

Groupon continues to dip its toes, somewhat tentatively, in the business to business space, mostly through Groupon Stores, a number of daily deals sites that cater exclusively to businesses, mostly of the under-100-employees variety, are popping up all over.

BizGrouper, B2Bucks, and GroupPrice, among others, have gone into the business with businesses. According to Robert Ball, CEO of Atlanta-based OfficeArrow, the mindset of the small business owner looking at a daily deals email is different than that of a consumer. Price isn’t as important when a small business owner needs a copier versus a meal at a Thai restaurant.

“The deals that do best offer business owners some product or service that they need and are already buying,” said Ball.

OfficeArrow began life as an online business community where small businesses owners could interact and get and give advice. It only recently started dabbling in deals and has done well with deal offers for office supplies, cloud apps, software, business magazine subscriptions and office coffee services.

Because almost all of the deal redemptions purchased through OfficeArrow happen online, the voucher-issuing business has the opportunity to connect with and collect data about the voucher-purchasing business. Rather than being on the receiving end of a single-time coupon redemption – a common complaint among businesses that offer daily deals to consumers — deal makers that offer discounts through OfficeArrow and other B2B deals services have the opportunity to create long term relationships with deal takers.

“We encourage them to cross sell, up sell, look to engage them further,” said Ball.

Ball’s customers are not the most likely takers for a $12,500 information services makeover. Most of the 250,000 unique businesses that use his service and more than 50 percent have fewer than 250 employees.

Businesses tend to put much lower limits on the number of deals offered in the B2B space. According to Heidi McBride, co-founder of MarketBlitz, a Denver-based B2B site set to launch on April 27, businesses signing on are keeping the number of specific deal being offered pretty low.

“We’ve had a few 20s; we have one that’s 200,” she said.

MarketBlitz is charging a 25 percent commission on the deals it offers its customers, a better deal than Groupon’s consumer service, which takes a 50 percent cut. The attraction is similar for B2B advertisers, however: “It’s advertising that you don’t pay for until it works,” McBride said.

She said that MarketBlitz has already lined up a number of deals that it will be offering Denver business come next week, including an audio visual conference room package, digital signage, a startup web package and a business productivity suite. She said they are in discussions with area printers to offer print services and vehicle wrappers.

The problem is B2B marches to its own drummer. Consumers make impulse purchases all the time, but the sales cycles for B2B are notoriously long. Ajilitee tried to make it easy for businesses to pull the very expensive trigger. Interested companies didn’t have to buy the deal until they contacted Ajilitee to make sure they knew what they were getting. And a company that purchased the deal had a year to redeem it. The problem: nobody bit.

Over time as the model becomes familiar and ingrained in practice, economics will draw in the enterprise buyer,”Ajilitee’s CMO Diann Bilderback wrote on the company’s blog.