4 Key Differences to PM'ing for B2C vs. B2B

NOTE: I’ve launched advertising platforms at both Google and Flurry and ran Zynga mobile poker (iOS, Android). The notes below are based off my experience in these contrasting consumer and b2b roles.

What’s the difference between product management at a B2C role vs. B2B? A former co-worker asked me recently and it’s a great question. Many aspects (and skill sets) that a PM needs are exactly the same, regardless of whether the end customer is a business or a consumer. At the end of the day, your job is to set a vision, wrangle x-functional resources and launch great product(s). But certain aspects change shift dramatically and I’ve highlighted four key differences below. No doubt that four is an incomplete list but hopefully a good primer on some of the most common, key differences.

Access to the front line
In a lot of B2C cases, there isn’t a large direct sales team, which is a substantial difference. It’s a plus and a negative. On the plus side, with a sales team you’ve got a built in group of people internal to the company that spend all day talking to customers. And as a result they should know the customer perspective inside out, which can be hugely helpful to a PM (eg unlimited feature ideas and concepts are just around the corner!). The flip side is sales will be hitting the street everyday and they’ll be coming back to you to “tell it like it is.” They’ll tell you about what competitors are doing, the new features the product needs and required tweaks to existing features (“But if the product could just do that… we’d sign all these deals!”). Bottom line: more direct customer feedback is at your fingertips in B2B, but cognitive effort to parse and distill it goes up dramatically.

Longer cycles
B2B product releases often have longer cycle - it’s not always true, but often is. A few core reasons drive this. First, a lot of features will require sales team buy-in. And that buy in might come from multiple sales reps, in multiple regions, over many time zones (so right off the bat coordination cost will increase). Second, you must penetrate two layers of operational chaos to launch anything. To put it another way, anytime your team successfully fights off the dogs of scope creep, too many projects, bug maintenance, etc and ships something great, you must then successfully clear those same hurdles at the target company to win new business or get updates adopted (if you require SDKs, downloads, etc). And third, the first two reasons conspire against you to alter how the company approaches each project - because the first two extend the “cost” of any feature, many companies feel compelled to debate the merits / trade-offs ferociously… thus further adding to cycle time. Bottom line: Upfront buy-in and user adoption will be slower in B2B but you’ll gain more time for long term product thinking.

Customer insights
In a successful B2C product, you’ve got millions of customers. There is no “top customer,” there is a top cohort of customers… and even when you’re doing great, you probably lose some every week. In B2B, you operate on a dramatically different order of magnitude of customer numbers. You might get a 1,000 new users a day for a consumer mobile app but 10 new customers a week for an enterprise productivity tool. And losing your top customer might be a catastrophe, not just a blip in a cohort metric. That disparity forces you to analyze customers in a different fashion. In the former, you might study user drop off in the new sign up flow (and insight will come from identifying trends in numbers, eg step 2 has 85% drop-off). In the latter, you don’t even have a statistically significant sample and focus shifts to teasing out insights, motivations, needs, pain points directly from the customer or the account management / sales / support folks that aided them. Bottom line: You’ll have to recalibrate how you study user behavior, balancing what you can get from user data (quant) vs. user anecdotes (qualitative).

The power of one
Finally, in a B2B company it is not unlikely, especially in early or mid stages, to have a single customer be 30, 40, 50% or more of your revenues. This will not happen in any successful consumer product. The benefit is you can get extreme clarity on customer needs, develop products that are laser focused to meet needs and grow revenue almost on demand (eg “they said they’d pay $X for Y, we delivered Y and revenues went up $X!”). The downside is tyranny of the minority - and the key risk is that your roadmap becomes their wish list as opposed to a defining vision of where your product is going and needs to go for long term success.

Reviewing the four differences reveals an underlying truth: the key differences in B2B product management are often driven by the volume of customers you serve.* The smaller volume implies each must be more valuable, to make a successful business. This in turn requires a larger, dedicated sales force, to land these higher value customers. And to aid sales in landing these deals, product and sales need to get in rhythm to deliver.

Thanks for reading. For more on product management, you can follow me here.

*It will be interesting to see how this evolves, and potentially converges, as certain enterprise products “consumerize,” gain mass adoption in companies and start having MAU counts in the MMs

 
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