Direct-to-consumer (D2C) platforms emerged as an early winner of the business landscape’s digitization.
From consumer goods to healthcare, D2C platforms and their transformative go-to-market strategies caught fire, disrupting traditional silos and sales channels by activating new technologies and leveraging digital solutions to better democratize access to products and services.
But D2C lives and dies by brand recognition and customer loyalty. Absent those two engines, it is notoriously difficult for a company to scale.
And in a challenging macro environment full of uphill battles like today’s, the entry cost and maintenance required to merely stay afloat in the D2C space, much less make a splash, have risen just as high as inflation and contemporary interest rates — if not higher.
That’s why the digital health industry is undergoing a shift in strategy away from D2C-first to a stronger digital B2B approach that favors employer and payor partnerships.
After all, the business-to-business (B2B) space comes with a stickier customer base that features less churn and lower acquisition cost on a unit economics basis than legacy business-to-consumer (B2C) approaches.
These clear advantages are only growing more attractive in the face of ongoing economic challenges — particularly within healthcare, where moving to an upstream B2B environment can still create a meaningful impact.
Read more: Why B2B Tech Will Drive the Next Innovation Cycle
And while the D2C healthcare space, with its acquisition and retention costs and unavoidable churn, is becoming a more hostile landscape to operate within, the B2B healthcare space offers higher margins and the ability to borrow from and reframe winning D2C strategies.
Research in the new PYMNTS report, “Changing Economy Sparks New Priorities for Systems Spending,” a collaboration with Corcentric, revealed that healthcare businesses are prioritizing digital investments to streamline their performance, and leveraging B2B platforms to increase opportunities.
In an economic downturn, consumers are less able or more unwilling to spend money. Enterprises, however, are generally looking for ways to save money while operating more efficiently.
The pivot in digital health toward B2B is an indicator of this macroeconomic situation, but also represents the culmination of next generation technical capabilities, and the intersection of broader marketplace education around the benefits of digital solutions.
“You don’t have to look much further than B2C today for the future of B2B tomorrow, when it comes to things like efficiency and digitization. Some of the newer generations rising up in organizations just won’t accept some of the things that have been taken for granted as status quo for decades — they’ll say this is too difficult, this needs to change,” Corcentric President and COO Matt Clark told PYMNTS.
See also: The Trickledown Consumerization of B2B is Helping Firms Win Business
“The B2B portal is giving us a way to be more [operationally] streamlined,” Tivic Health CEO Jennifer Ernst told PYMNTS in May about her firm’s new digital B2B platform.
“The entire healthcare industry has been built around pharmaceutical sales representatives calling on a doctor’s office whether the physician wants them there or not. … But the doctors don’t love having people taking up time and sitting in their waiting rooms,” Ernst added.
B2B healthcare solutions can generate profitability and scalable unit economics by allowing firms to take advantage of the under-penetrated but highly addressable B2B market.
That’s because, at least for now, the landscape remains relatively uncompetitive when compared to D2C.
Beyond just healthcare delivery and provider solutions, there exist a bevy of B2B opportunities within the back-end of healthcare operations by tackling historic problems to enhance workflows.
Administrative bottlenecks obstruct healthcare systems, and software solutions that can streamline legacy processes and workflows will ultimately benefit patients downstream.
Research by PYMNTS has repeatedly shown an increased desire for a unified digital healthcare platform that lets patients access their health data, schedule appointments, pay for care and more. It stands to reason that hospital administrations and key provider decision makers may be looking for the same.
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