A Deeper Dive

There are some critical differences in the product management approach if you have a product aimed at consumers (B2C) versus products for business (B2B). There are some critical differences in the strategies and tactics for product management in these cases.

In B2B and B2C business, the product manager’s role is to build the right product that delights the customer and meets the business objectives. However, there are considerable differences in the tools and methods to accomplish that objective. The differences between the two arise because 1. The buyer of the product and the user of the product can be different. 2. The product may introduce additional costs of adoption downstream, 3. In B2B, there is less urgency or threat of displacement if a product is not adopted 4. The feedback from the customer may not be immediate.

B2C product management is relatively well understood; most current product management literature focuses on this and focuses on user needs and iterating to find the product-market fit. We will not go into the details in this book. I have indicated some excellent resources for PMs interested in learning more about this in the resources section at the end.

In the B2B context, the product manager has to build a product that delights and engages the customer and meets business requirements. A buyer typically evaluates the effect along with these business requirements. B2B product management starts with understanding the buyer, what is essential to the buyer, and the purchase criteria? Interacting with the buyer makes it more manageable as someone you can engage with for direct feedback. But there are downsides to this focus. It means that you are getting feedback that represents the market.

For B2B products selling to enterprises, the adoption rate can be slow, depending on several internal factors, such as buying cycles, Return on Investment, preferred vendor status, and other contractual or legal factors.

There are two key product strategies for companies developing B2B products: value-based or cost-based. Value-based product strategies positively impact the revenue, either directly increasing or indirectly influencing it. Products in value-based strategies are differentiated and have no substitutes or alternatives in the eye of the customer. Alternatively, value strategies can also decrease or positively impact the costs, thereby reducing the costs. Understanding how your product fits into this strategy will enable you to create the right products.

Identifying opportunities: 

B2C addresses a large user base, and various quantitative and qualitative methodologies are available for segmenting users and understanding their behavior. Looking for a strong signal for a new product in B2C requires careful analysis and observation of consumer behavior and the development of personas based on behavioral segmentation.

B2B’s user base is much smaller, but the potential customers are more influenced. Identifying opportunities requires close partnership with a few key customers at the forefront of the technology and early adopters. The nature of the relationships within a potential customer must be at different company levels, from top to bottom.

Defining solution:  

Once you have identified a  problem area in B2C, it is essential to create an MVP and get it in front of customers as soon as possible to start getting feedback and iterating rapidly. The key here is not to wait for all the feedback but get started on the product concept as soon as you have confidence that you have identified the right opportunity and can refine it with additional feedback.

In the B2B case, while the velocity of decision making and the product definition is critical,   it is also important to weigh it with the cost of implementation and all the tools needed to complete the product. In many instances cost of change after implementation is expensive, so the product will need to be sufficiently complete for initial adoption. In addition to the core product, it is necessary that you also include ancillary product tools for managing security. Suppose you are solving a core problem for a customer. In that case, a B2B product can get away with being a bit raw, as the customers are sophisticated and can work around the shortcomings as long as the utility is higher. It is a good idea to roll out a B2B product on a trial basis to a set of customers and gather feedback to help build a better product for GA.

Scaling the solution: 

Scaling B2C will require a variety of growth hacks and a keen understanding of the funnel and various levers driving the different stages in the funnel and marketing drivers for every phase of the funnel.

In a B2B case, scaling the solution requires working closely with the sales organization. The product and sales team needs to work closely to understand the prospective customers’ pain points and position your product accordingly. These interactions are also critical for helping build your roadmap. To create a roadmap that addresses most customers, you can interview key customers to gather in-depth feedback. Typically, the deeper your organization goes, the more detailed the input. A vital tool in communicating your priorities and vision is the product roadmap.

The goal with many customer interactions is to act like a trusted advisor to the customer, with credibility and relationships; as a product manager, you need to rely on your sales team and the customer success team to dig deep into customer pain points and feedback.