B2B vs. B2C: 3 Best Practices for Capital-Efficient Growth | Ed Ceballos, Everflow

Welcome to the Biz to Biz Podcast, your number one source for all business news. Hey everybody, welcome to the B2B Vault, the Biz to Biz Podcast sponsored by Nationwide Payment Systems. And today we have a great guest, Ed Sabalos, Vice President, Partner Ecosystem at Everflow, a partner marketing platform, which I'm excited to hear about today. And he's in Orlando, Florida, close to Fort Lauderdale where I am. So that's kind of cool to meet Ed and welcome to the show.

Hey, thanks for having me, Allen Kopelman. It's great to be here.

And, you know, we're going to be talking about some topics related to driving revenue with performance partnerships and related, you know, to B2B. We're going to talk about B2B. What's the difference between B2B and B2C? And are you ready to dive in?

I am indeed.

Okay, so, you know, B2B, it's always a thing with marketing with me, especially when I hire people to work, work in the office, and we start talking about marketing, we talk about, you know, advertising or whatever we're doing. And so, you know, tell us, like, how do you, when you're talking to somebody that's in marketing How do you explain that? You know, I always, you know, the difference between B2B and B2C is basically two different things. So how do you deal with that?

Uh, they are indeed very different in many aspects, but they are very much alike in one aspect. So where they're different is B2B sales processes are relationship-driven. They have longer sales cycles, multiple touchpoints and personalized engagements, which might include activities like lead qualification, proposal negotiations, customized contract, which is very common as well. Now, when you look at B2C sales, those are transactional and rely heavily on mass marketing, e-commerce, and impulse-driven decisions. What else? Well, also, B2B deals typically focus on long-term value and ROI, which is the, the main manifestation of value, while B2C prioritize quick conversions and repeat purchases. Um, and I think last, the last difference that matters is pricing, because B2B pricing is often negotiated, where B2C has fixed pricing models and rely heavily on discounts and promotions. That's where they're different. Now, just for the sake of, of the fun, a point of contention, many people insist that B2B purchases are free from the emotional and irrational elements of B2C transactions. And I think it's not true. People buy products they like, from people they trust, and they are heavily influenced by the people whose opinion they respect. Does it make sense?

Yeah, it makes sense. You know, I think it's important, you know, like, I think one thing that we notice in our business over the last few years, and COVID kind of accelerated that even further, is that I split my customers up into two age categories. So 40 to 45 is kind of the middle. The people above that will definitely see something, send you an email, or pick up the phone and call you. People below are looking to do their research online, and they're gonna look things up and do their research there and then buy. They, you know, they'll sign up with Square, Stripe, PayPal, anything they can just click online and sign up with and jump through, uh, as few hoops as possible. And some of those businesses it works out for, and then sometimes they find themselves in trouble or they get a note, uh, sorry, we do not support your business type. That's where we come in. So, you know, do you find that with the age groups of that their buying habits are a little different?

Yeah, I agree completely. I think— I believe that those habits have changed a lot. I remember around 2012, 2014, there was this amazing LinkedIn research that shows that more than 75% of the buyers will do, would prefer to do most of the research on their website, on digital properties before they are willing to engage with a person. So the moment you sit and speak with them, they already quote unquote know about your product. And that, that trend has only intensified. And that clearly drives what is the taxonomy of digital properties today? What is the type of content you need to have? What are the resources you want to make available to those clients, to those prospects and leads coming to, to them because they expect to find key answers in a very easy way and with not a lot of effort. And that's why you see that gated B2B content has mostly disappeared. We can argue that in some industries, it's still— there is value. But in most cases, gated content has disappeared. You want to make it simple for them following that principle. Uh, that Gary Vee, uh, started voicing in the around 2010, which is give, give, give, and you eventually will get.

Oh yeah, well, you know, I always say there's no free lunch. People will say, oh, I'm getting this for free. No, no, there's always a catch.

Yeah, yeah, yeah. But that's, that's the value exchange. Like, you If they don't want to talk to you unless they have a first sense that your product is fit, the best thing you can do is let them learn about your product in a very easy way with the lowest possible friction. And when they are happy about what they're seeing, they will be ready to reciprocate and say, okay, let's talk. I have questions for you. I wanna hear your answers. Right.

So yeah, that's, you know, I think it's a pretty interesting. So what kind of, what are the 3 best practices B2B companies can use today?

Hmm. I have no doubt that the most efficient customer acquisition motion today for any B2B business-to-business company is a referral program. And it honestly surprised me so few companies use it. For the sake of clarity, let me clarify, let me state this. What is not a B2B referral program? It is not a partner portal. It is not a refer a friend and win approach. And certainly it is not something partnership people will do. Instead, the way I see it is a process in which every customer and market-facing person in the organization participates. That's the first one. The second one is tap into your ecosystem. When you look at most sales processes, they have a pretty obvious interest in connecting with people directly involved in the buying lifecycle. But I would suggest to put special emphasis in identifying and partnering with companies involved in the adoption or use lifecycle, such as service providers, consultants, agencies, other SaaS companies. These stakeholders are uniquely positioned because they're usually walking along your future clients while they are experiencing the need or the problem. So they have a very good vantage point and they can give you insights and recommend your product. The third is partner with publishers who can help you amplify your market reach or, like a war game, reach the right market. A good example is Content Partners. Comparison websites, services, marketplaces are good partners offering NUR. Card linking partners is another great example.

What kind of linking?

Card linking offers or CLO, card linking offers partners, is another great example because they can help you reach high credit limit business card users like CFO, CEO, or purchasing managers. These type of publishers will be very happy to work on a performance basis, um, which means that you don't have to put money unless there is an actual conversion. Um, yeah, we've talked to—

I've talked to some platforms and they're like, oh, well, give us $2,500. And, you know, I'm like, no, no, no, no, no, we don't want to do that. We want to, you know, we'll partner with you. We'll provide content to you. And you can use the content. And if we get referrals from your network, you know, you'll get ongoing residual income and make a lot more than one-time $2,500 from us. And we're willing to do because that way we both have skin in the game.

Yeah, yeah. And I would say that most of these performance partners are very happy to work, uh, in that format. In that format because it's like the rewards are commensurate with the risk. What you describe happens mostly with content partners because for content partners, it's not uncommon that they will want to get some upfront fees to pay for the development of the content, some initial amplification with the media for that content to start getting some traffic. It's kind of a kickstart the thing. But the examples I was giving you, like CLO partners, like the Rewards Collection, those are partners that are willing and ready to work 100% on a performance basis.

Right. Yeah, we've had a few people approach us and say, oh, you know, link your podcast up to our website, which we've done a a couple, we just did one recently and somebody else offered me to link my, uh, blog up to their website, but we'll see where the, you know, if we get traffic from there or not over time.

So yeah, that would change a lot because of what happened last year with the Google search engine changes. They basically hammered everyone on the search results, but the traditional play in the last 10 years has been optimizing your content towards the search engines. And so there was a lot of appetite on getting backlinks and getting traffic to you. And it was mutually beneficial. I think that everyone doing content, especially these players, like the ones that approach you, content partners, are still trying to figure out how to be relevant in this new scenario.

What's, you talk about in the information that you sent me, what's capital efficiency and why is that so crucial?

Why is this crucial? Well, I can use our own example, like what we do at Everflow. We're a business-to-business SaaS platform. In our case, referrals from partners have a higher conversion rate. In our case, partner-sourced leads enjoy that 2.3 times higher conversion rate compared to every other lead from inbound and outbound channels. And second, partner-sourced leads close 3.3 times faster. This is true for us. Some other companies might have smaller or bigger numbers, but like they close really faster. That's a massive increase in productivity for our sales reps. Think like instead of closing 90 days, you're closing in 30 days. That means that you're going to be reaching your annual quota by end of Q3 and you have the rest of the quarter, Q4, to kick it out of the park.

Yeah, and it's definitely— we notice when we get a referral You know, we close it a lot faster. Some of my referral partners, they're like, oh, I want to learn the business. I'm like, okay, I'm doing this for 25 years. Like, I can't give you like the Spock mind meld, you know, and I download all the information into your, into your brain. There's just, you know, payment processing, you know, with AI and then just technology in general. And I'm sure you see it in your business too. Everything is moving at the fa— we're moving at the fastest rate that I've ever seen as far as like changes going on in technology. The, the, the quickness that everything is moving at right now is just crazy.

Yeah, yeah. And actually, you, when you were mentioning that, uh, example, uh, something that comes to mind When you look at every business-to-business sales organization, you know, it's very difficult to scale B2B sales teams. Like, great seasoned account executives are hard to recruit, and training new account executives takes time. So that's always a challenge. And if you look at the cost of user acquisition using pay media, that cost just keeps trending up. Google and Meta have almost doubled the revenue in the last 3 years, but there was only a 20% increase in monthly active users. So it's very expensive to acquire clients using pay media, and it's hard to get a sales team that is scaling because like you have these great 5 sales reps, it's hard to get 10 of these great sales reps, right?

Right.

And it's hard to use money for that because your media buying budget is limited. So I would say those are 2 really big drivers for companies to think more on why they should be using performance partnerships. And the beauty is that that portion of client acquisition that you do with these partners can be really greatly optimized to accelerate the partners driving those high-value or high-converting clients. You can literally add more fuel there to bring more speed, which means that at the end of the day, if you look at any client acquisition motion or strategy in any go-to-market of any SaaS and any B2B company, you want to de-risk your go-to-market. So adding performance partners is a way of diversifying your client acquisition sources.

Right. And what about AI? How do you think, how do you think that's gonna play out? Like all of a sudden I see every other day there's another company. I just watched a huge launch by this company for their AI and you can build this AI and you can use it for for— you can build one AI, use it as a chatbot, you can set it up on your website to talk to people, you can, um, have it answer the— have it go to a phone number and they'll answer the phone, and you just program in like whatever you wanted to say. And it was— there was like 8 things this, this, um, AI robot thing could do. It's just crazy, like You know, that when you— that's not— and that's not— AI is not automation. I'm not talking about like you answer the phone and you hear the person say, hi, welcome to Nationwide Payment Systems, press 1 for sales, press 2. No, it's somebody you can have a complete conversation with. It's, it's pretty crazy. But do you think like people, people are gonna like that when they go to a website, when they see an AI on there, or people are going to think like, hey, this is very cheesy.

This is another technology disruption, right? Right. I personally believe it's the biggest disruption we will experience as humans, even bigger than the internet or the industrial era. It's going to be the biggest thing in our history now. We still need to see where this will go. We as humans have a very— it's very hard for us to think exponentially. We tend to think linearly. A good way to put this is when you think about the first cars, people were imagining cars like a carriage that instead of having horse was having an engine until there was a true disruption and the true value and opportunity for having different vehicle types was actually developed. Today, I think that beyond the fancy chat piece, there are some interesting implementations, interestingly, on the side of automation, especially AI agents. I think AI agents are inevitable, will be the shortest time-to-value implementations of AI. But it's still very early. It's a technology people are, we are all learning to use it. There are some already funny cases like a super famous AI company, one of the top 3 leaders who have been posting job search ads in the last month asking people to not use AI to apply, which, here goes the irony, or cases of a buy now pay later company one of the top 4 by now, Paylater, who went on last year to fire everyone in customer service to replace with agents, only to visit a retreat a couple of weeks ago and start rehiring people. So yes, it's a new technology, but the potential is undeniable. It's going to be massive. It's going to be an incredible transformation. And we're still, we're just seeing the early stages and it's here to stay because the potential is Incredible.

Yeah, I guess, you know, it's, it's more or less kind of a thing where you have to try it out. I mean, we use, um, AI every day in the office. I mean, to help with writing, we actually deployed an AI on our website to do the SEO, and we went from a, a score of about an 8 to a 95 in a matter of a couple of weeks. I mean, that's just literally insane that because you're not having to type all this stuff. I mean, I would not hit the button on it and go, yeah, fix everything, boom, and hit that button. I'd be too scared. I have too big of a website because— and they tell you not to do it even though it says it can do it. But I'm just saying a tool like that you're talking about, it marked in like we got a report after using it for a month and it says, oh, you saved like 10 weeks of work. It's just, that's crazy, right?

Yeah, there are so many disruptions coming down the road. They are inevitable, right? Yes. But it's still like one of the interesting things about any disruption of any technology is that the biggest disruption rarely come, really happen, or are driven by the natives on that industry. It's disruption driven by people not native to that industry. So the biggest payment disruption didn't happen because of payment experts, right? It was people thinking out of the box. The biggest disruption in healthcare, it was led by people not native to the healthcare industry. And so I think that we have to go a couple of cycles until we start seeing the biggest opportunity for AI. And then we happen. And just like in the '90s, a lot of us started saying digital camera. And the kids born in the '90s, they would just say camera because there is only one type. So they are digital natives. While I was an immigrant to the native, to the digital universe, not a native. You will see a lot of people who will be native to AI. And they will be able to see the potential with true disruption in a way that we, the people who have a different paradigm in our heads, might not be able to do. Makes sense.

That, yeah, that's, that's probably— I think that's true. Like, kids today, they're born with a phone in their hand, right? And then they just, they think of— like, I think about things, I have to write it down or type it up, right? But younger people, like, they're doing it in their head more because they're— that's just, I'm used to like, oh, it's here and now I'm putting it there. They're just putting it on the screen. Right, like that. So if you're going to leave us with, um, 3 actionable things a business can do to help them grow, what would you— what, what would be 3 things a B2B company can do today? What would be 3, 3 suggestions?

Well, the first one I definitely would say, start your referral partner program. Referral partners program, we help you in tapping the power of the network effect. And there is a lot of power in using that because you're tapping on the power of all these people using your product, your service, and they have a unique perspective and it will help you craft better content that will be more relevant and meaningful to the prospects coming to your website. So definitely using referral partners will help in creating proof of concept for the best content. And all forms of partnerships, not only referral partners, but service partners, agencies, consultants, etc., will definitely help you tap on the network effect. At the end of the day, you want the highest percentage of your clients coming to your website and, and telling you, uh, I heard about you, uh, someone mentioned you to me, or I read an article mentioning you. Uh, so if you can build that network and if you can tap in the network effect by connecting all the people that that are involved in that ecosystem, and there are different ways to add value to each of them so they will want to connect with you. You're building something that is very organic, very capital efficient, and it requires dedication, but it's very doable. We've done it ourselves. We have a case study where we're telling on that white paper how we have done it today. We get 50% of our revenues coming from partner source leads. You can also look at the HubSpot case study. HubSpot is a company, is a CRM SaaS company making above, well above a billion dollars a year in ARR. So it's also a great case study that you guys can look and get some ideas. And ultimately, if you don't know where to start, get a marketing agency, and there are many good partners, um, agencies out there who can help you get that going.

All right, anything else you want to add to the podcast today?

No, that could be all. I really appreciate, uh, you having me and appreciate the opportunity to talk to your audience.

Well, I enjoyed the conversation today, and thank you for Ed Sabalos from everflow.io if you want to check out his website. You can also connect with Ed on LinkedIn. He's on LinkedIn. And, um, thank you for listening to the podcast today. You can catch us on Spotify, Apple Podcasts, YouTube. Follow us on LinkedIn. You can connect to me on LinkedIn. And thank you everybody for joining us on the podcast. Peace out and carpe diem.