B2B – short for business-to-business – is familiar to many sales and marketing professionals. But what exactly does the term mean, and how does a B2B company appeal to potential customers? The changes that digitalization is bringing to business processes is presenting new challenges to companies, and the B2B industry is no exception. In this guide, you will learn how to respond appropriately to...
Companies can not only establish business relationships with private consumers, with their employees, or with other companies but also with public authorities. Information is exchanged between companies and public administrations, but it is also possible to establish a business relationship between the two entities.
B2G describes the relationship between an enterprise and an authority, such as a tax office. The acronym B2G stands for “business-to-government.” B2A (“Business-to-Administration”) is also sometimes used and covers both trade and communication between the two.
What is B2G?
In general, B2G includes any kind of relationship between public authorities, such as the government, and companies. Public services are contact points for legal matters, for example, but may also interact with companies in the form of lobbying. A third form of cooperation between companies and public authorities also understood as a B2G relationship is the public-private partnership (PPP).
To simplify processes for both companies and public authorities, communication in the B2G is increasingly taking place online. For companies, the significantly faster applications processing is ideal, and means a more efficient transaction can take place. For example, you can download forms directly or transfer your tax dues. B2G is usually intended to be a long-term working relationship, and is characterized by a high order volume. It is therefore vital that both sides have fast and well-functioning communication.
Possible B2G scenarios
There are very different starting points for a business to government relationship. Companies and authorities interact with each other for very different reasons. Sometimes it is about business relations, sometimes formal processes are dealt with, and sometimes the B2G is a recruiting relationship. The scenario depends on the kind of authority.
Purchase of products and services
The classic form of a business relationship is the purchase of products or services from one party by another. Authorities often resort to offers from private companies. Above all, there is a great demand for technological solutions, to make personal data secure, for example.
The B2G processes online
To simplify cooperation, especially from the point of view of companies, more and more public administrations are offering a selection of services online on their websites. You can download templates for necessary documents or applications and often send them directly to the required administration. Processing payment, updating business information and so on, can also be carried out online.
Recruiting new employees
If you as a company are looking for new employees, working with public administrations can be worth its while. It is worth checking out if your state has a government portal for advertising jobs – this is a classic kind of B2G cooperation. As a company, you can place your job advertisements there free of charge and benefit from their large audience. As both job placement and career guidance are among the main tasks of this portal, a wider range of possible jobs also brings benefits to the state.
The goal of lobbying is to push the influence of companies, for example, on political decisions. Lobbying is part of public affairs management, an interface between companies and society. This is carried out by business associations or public affairs agencies acting on behalf of a company. The focus is on the interests of the company, which are to be communicated within the framework of legislation. Frequently used methods are press releases or advertising campaigns.
Public-private partnership (PPP)
A PPP is an agreement between a government agency, and a private business. A government agency is any federal agency, for example. In a public-private partnership (PPP), both partners contribute their available resources such as personnel, capital, or expertise to jointly support a project of interest. This means that transactions which are only financial are not considered to be PPPs. The respective functions of both parties are specifically defined: The company is responsible for ensuring that the service needed is provided, and the government agency ensures that the common objectives are met. The level of cooperation may vary, but it is always contractually regulated and designed for the long term.
What's special about B2G relationships?
If government agencies require services or products, such as technological solutions for data processing, or making a construction project happen, authorities assign the required contracts to private companies. These kinds of orders are attractive for companies, as they generally represent a secure source of income. Marketing measures in business-to-government transactions are used to convince agencies of the benefits of the company’s products and services. A classic example of this are regional fairs organized for communities. Companies have the opportunity to present products and services that benefit the local community at these fairs. These could be products or innovations for waste disposal or energy and water supply, for example. This is only one example, and relationships between companies and authorities are possible and important in many other areas too.