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B2B Vs B2C Product Managers- The Startup Board
Does the role of product manager change in B2B and B2C scenarios?
As discussed in my previous articles on Product management, Product Managers (PM) play the central role of working with the various functions across the organization like engineering, marketing, sales, legal, design, customer success, finance etc to get their product out of the door.
They own the decision on what gets built and also work on the aspects of how it will get built and launched in B2B marketing.
The days of the consumer-marketer being able to succeed in the business-to-business (B2B) ecosystem are numbered. Marketers must shift gears by adopting strategies that are insightful and actionable, while researching and integrating consumer expertise.
What has been the biggest contributor to success in the past? It is undoubtedly the product manager.
B2B and B2C product managers have many similarities, but also some key differences that depending on the size and scale of your company, it can be challenging to manage these projects.
Regardless of whether you manage a B2C Product (consumer-oriented product) or a B2B Product (B2B Business Users), PMs mostly have the same challenges and activities. All product management is ultimately a balance between iteration and the audience.
However, their daily responsibilities may differ due to the specifics of the business. In this article you will learn more about B2B product management, B2B & B2C Products, Users, Customers, its Business Models, Metrix, features and more.
What is B2B Product Management?
For effective B2B product management, product managers must attain a level of expertise regarding their target industry. It’s hard to know what a medical administrator, banker, or construction manager really cares about without digging a little deeper and doing research.
B2B products are enterprise oriented and are intended to solve business problems. Examples like ERPs (SAP, Oracle), CRMs (Zoho, Salesforce), Cloud Platforms (AWS, Azure), Collaborative Tools (MS Teams) etc are B2B products.
Here the PMs have to understand the sales cycles, customer requirements, customer engagement etc to ensure that they deliver the best product to the market.
B2C products are consumer-facing and help users solve their personal needs. Apps like Social Media apps (FB, Insta, Whatsapp), eCommerce apps (Amazon, Flipkart), Banking Apps, fitness apps, OTT Apps etc are all examples of B2C products. In B2C, your focus is more on the end-users as you build the product for one key persona - your user.
B2B vs B2C Customer and Users
For B2B products you are actually building the product for two personas: those who make purchase decisions (your customers) and the product users (your customer’s employees).
So you have to focus on the Customers and their Users and understand the problems of both of these personas, how they interact, and ultimately how to prioritize them. The customer might never use the software but they need the product to help them achieve their goals.
Users are the people who are actually using your product on a daily basis. Customers are the people who have deep pain points and will pay for your product.
Source- ashtonmedia
For B2C products, the customer and the user are the same person, since the person using the product on their phone (users) is also the same person who bought the product (customers). In short you have one key persona for whom you have to design and build the product, your user.
This simplifies certain aspects of product design and development, but everything is not as easy as it seems since some users can be hard to understand.
You cannot reach every individual user and ask for their feedback and for this reason, the product scope usually originates from analyzing user behavior patterns, identifying gaps, creating vision through user research, and adapting to the changing needs of the users.
B2B vs B2C Business Model
A major distinction between B2C vs B2B products is the business model.
In B2C products, revenue is generated from thousands or even millions of customers making many small transactions. These transactions could be purchases, subscriptions, ads etc which allows the business to make money. B2C companies spend heavily on marketing to get as many impressions as possible on various channels which will eventually help in getting customers converted into regular users.
The conversion all depends on how effective the UX and UI of the product is and how quickly you are able to convert a user.
In B2B, revenue is generated from a small handful of enterprise contracts, these enterprises could be small, medium or even large corporates. These products generally come at a price point which could be anyways upwards of a few hundreds of dollars to a few million per customer, so the PM should be ready to engage in lot of Pilots, POCs etc to ensure a sale happens.
The typical enterprise sales cycle is 6–12 months which means it is up to Sales to nurture these contracts and bring them to the finish line. The PM helps the sales and marketing with all the collaterals, roadmaps, mockups, demos etc needed to ensure the sales cycle is closed.
B2C vs B2B Product Metrics
B2C vs B2B product metrics vary on a very large scale, B2C products handle thousands and sometimes millions of users which would rarely happen for a B2B product unless you are microsoft.
For B2C, customer churn is a very pressing issue. Users can stop using your product at the drop of a hat, therefore customer retention and loyalty metrics are high up on the radar for a B2C PM. Customer acquisition cost (CAC) and
Lifetime value (LTV) are other key B2C metrics, the target for a B2C PM is to have larger LTV compared to the CAC, else you would be burning a lot of cash. It's OK to have a higher CAC in the beginning of a new product launch but gradually that has to come down and the LTV has to go up.
For B2B, depending on the business model of your product you will have different metrics. Like if you have a SaaS product you would be worried about user churn more than a non SaaS product.
Some other metrics could be developed around usage of the product like no of user logins, session duration etc, to Net promoter Score (NPS), no support tickets raised.
Higher no of support tickets would mean your product has too many issues or customers are not very happy, so you would definitely want to reduce those to reduce future possible churns.
Features and Usability
Functionality and ease of use are important for everyone, even in the B2B domain the demand for a clean and great UX is the new norm, thanks majorly to the over exposure to the tons of B2C apps which they use on their phones.
For a B2C user to stop using an app is very easy, if they find the product very difficult to use they will not take more than a minute to delete the app. Whereas for a B2B business users what really matters is the product’s main functionality and the value proposition it is providing
The focus on features is what fuels B2B product development. It’s about what your product can do and less about how to do it. There will always be a push to expand what’s capable.
B2C products don’t have the same pressure to continue adding on new features. It’s important to do a limited set of things really well and easily enough to appeal to a broad audience. UX and style are just as important as core functionality since there are likely alternatives competing in the market at similar price points.
B2C vs B2B Release Cycles
New, exciting, and different is great when you’re looking to be entertained. But less welcome when you’re trying to get your job done. This reality shapes the velocity and scope of introducing changes to the products that reside in these two categories.
Exciting and brand-new features are great unless it concerns your job and getting things done. This is what determines the speed and scope of making changes to your products. Let’s consider the two categories separately:
Releases for B2B products
In B2B products, customers are not big fans of frequent changes in product functionality. The customer may welcome improvements; however, they might view anything “extra” as “extraneous.” The reason is that changes might cause some product malfunction. The introduction of new features may also require additional testing and staff training, which can take some time.
To mitigate any risks related to product performance, product managers usually put together all major releases. They try to make product updates optional or based on settings while avoiding changing the entire product experience at once.
Releases for B2C products
For B2C customers, things are the opposite: they’re happy to get new functionality, more content, extra game levels… whatever gives them an even better, more engaging customer experience.
As they become familiar with design and experience on other apps, they’ll expect similar behavior in your products and generally will not mind an incremental learning curve as long as there are some user-friendly prompts and the reward of a superior experience. But it’s important to remember that when introducing new features, one should prevent any performance problems.
You should also remember that not every change is welcome, if something they love goes away or stops working, they might, too.
Conclusion
B2B and B2C are different in releasing cycles and road-map, customer acquisition, and stakeholders' involvement. But despite all these differences, one thing remains common, and it is the most important one in the entire digital product development process - you create and build for humans.
What matters most is that your product has to be usable. Therefore, always strive for a better, intuitive, clear, and smooth user experience that will remove all customers’ frustrations, add value, and make them enjoy your product.
This article is written by Ramandeep Singh Bakshi (Product Management Leader)