Product managers (PM) face similar issues and to-do lists whether they are managing a consumer-oriented product (B2C product management) or one aimed at corporate customers (B2B product management). In the end, iteration and audience are balanced in all aspects of product management. Although the terminology used in both PM jobs is the same, the dialects used in each domain vary slightly. Continue reading to find out how they differ and where they overlap. Product managers need to gain a certain amount of industry knowledge in order to manage B2B products effectively. Without conducting a bit more study, it’s difficult to determine what a construction manager, banker, or medical administrator truly cares about.
Product managers sometimes already have practical expertise in the industry they are aiming for. However, the majority usually have little to no prior experience. In order to establish credibility and set priorities, product managers must undertake their research. B2B product managers must visit sites, conduct in-depth interviews with clients, and keep up with industry news in order to understand how their solution could improve, speed up, or lower costs for customers. From newbie to thought leader in this field, it’s a learning curve. However, if the B2B PM is successful, their engineers and sales teams will trust you because they will see that you have a genuine understanding of what the market wants.
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What is B2B product management?
As you may have inferred from the name, business-to-business items are manufactured by companies for other companies. It all comes down to offering one, two, or more solutions that assist those other companies in enhancing a certain area of their business operations. Businesses may appear to be a smaller market to serve, but the stakes are frequently larger than for business-to-consumer goods.
B2B product management encompasses a wide range of sectors and product kinds, from manufacturers who supply all the necessary components for other manufacturing firms to software-as-a-service providers like Slack, HubSpot, and Asana.
What is B2C product management?
Our alternative approach to product management is more akin to what you may see in a mall. The last user of business-to-customer products is the individual customer. There is a lot more focus on marketing to a specific target and personal appeal, whether the product is a trendy new sweatshirt for teens or a meal kit delivery service for working parents. Effective product design is the focus of B2B product management. Yes, appeal is necessary, but compared to a B2C offering, there is less balance between the two. Building strong client relationships is another requirement of B2C product management, which differs slightly from B2B product management.
Key comparables in B2B and B2C product management
There is a fairly solid basis of parallels between B2B and B2C product management when you cut through the first few levels of differences.
1. Customer-centric
A product should solve a problem, whether it is intended for business-to-business or consumer use. While a B2B product can be able to automate a time-consuming activity for enterprises, a B2C product might just be something that makes the customer happy or meets a need. To become a powerful product, every product strategy should be focused on the consumer, their needs, and their problems. It should even aim to surpass their expectations.
2. Solid connections
Both the business-to-business and business-to-consumer sectors rely on the power of relationships to function. This relationship between companies and their clients is very important since it affects how those items are viewed and used. Forging and sustaining such linkages between the forms remains consistent, even as the actual interactions between them vary.
3. Working together across teams
All of the teams involved in product creation must work together harmoniously to bring a project to completion. Development teams work on making the product itself, marketing teams think of ways to attract the audience, and sales teams concentrate on getting the product to market. Regardless of whether you’re in B2C or B2B product management, if one team fails, the entire business fails.
Population management for B2B PMs vs. B2C PMs
Unless they work at Microsoft, for instance, B2C product managers usually have a user population (or total addressable market) that is far larger than their B2B counterparts. That’s no criticism of B2B goods, but even the most successful business-oriented solutions will be utilized by a fraction of people compared to a normal consumer app. However, that wider and more varied consumer base has its own set of difficulties. For a logistics solution, the product manager will likely have a very good idea of who is using it, but B2C PMs need to be aware that the user base for consumer products can include nearly anyone.
For example, B2C product managers often have a far bigger user population (or total addressable market) than their B2B counterparts, unless they are employed by Microsoft. Not to disparage business-to-business products, but even the most effective business-oriented solutions will only be used by a small percentage of users in comparison to a typical consumer app. But that larger and more diverse customer base comes with its own set of challenges. The product manager will probably know exactly who is using a logistics solution, while B2C PMs must understand that almost anybody can use a consumer product.
Other crucial B2C measures that are less important in B2B product management are customer acquisition cost (CAC) and lifetime value (LTV). B2C product managers must ensure that the LTV stays much larger than the CAC when growth depends on increasing the number of users and optimizing revenue streams, or else the entire business model will be upside-down.
Additionally, while B2B product managers could be concerned about how many features or how much time customers spend using their product, these metrics are even more significant for consumer apps that rely on advertising. More sessions, more time spent, and more page views all translate into higher revenue.
Features of B2B vs. B2C
The way that B2B and B2C products interact with their clients is very different. B2B products have customers, and customers have needs and expectations. Customers of B2C products have needs and desires. When they don’t get what they want, either party can leave, but a B2B customer’s dissatisfaction has a much greater effect.
A lengthy sales cycle, onboarding, account management, and customer success contacts have allowed B2B clients to develop intimate bonds with team members. Typically, they have made a significant financial commitment as part of their relationship. In the B2C sector, there is an expectation, often contractual, of assistance, service, and attention that just does not exist.
Because the sales models distribute B2C products without a coordinated sales effort, they also have an impact on product management. They just use advertising and marketing.
However, salespeople are usually needed for B2B items. If there’s one thing that salesmen enjoy doing, it’s pointing out the flaws in products that are costing them business. Despite its value, salespeople’s opinions should always be regarded with caution and properly verified by customer references. A sales team member’s request also generates a sense of urgency that is never present in a B2C user’s complaint. Product managers cannot afford to overlook B2B products because they have comparatively fewer clients at significantly higher price points.
Where is the need for B2B or B2C?
For everyone, functionality and usability are crucial. Customers will avoid an app that is hard to use, but business-to-business users will tolerate a cumbersome user interface if it does the task. This is mainly because, whereas consumers may usually take it or leave it, business users need the product’s primary functionality.
Requests are made by customers, market demands change, and rivals keep coming up with new ideas. B2B product development is driven by the emphasis on features. It’s less about how to do it and more about what your product can do. The need to increase capabilities will never go away, even while investments in new features should be in line with the company’s overarching goal.
There is less pressure on B2C products to keep offering new features. Doing a small number of things properly and simply enough to appeal to a wide range of people with different technical skills and preferences is significantly more important. Since there are probably competitors with comparable characteristics that compete at the same price point, UX and appearance are equally as crucial as core functionality. This is not to argue that B2C goods don’t include new features; rather, they usually do so much less frequently and base their decisions on strategic goals rather than individual client requests.