Improving your PM skills in B2B
How is B2B different from B2C and how can you improve
Hi PMs
I was recently invited on an interview to talk about B2B product management.
So I decided to write my thoughts on how B2B product management is different. And more importantly how you get to become a better PM in B2B.
In the B2B SaaS model, companies develop software products and sell them to other businesses on a subscription or usage basis, typically charging a monthly or annual fee. This software can help businesses perform a wide range of functions, like managing customer relationships, streamlining project management, or analyzing data.
B2B product management is a specialized field that requires a unique set of skills and strategies. Unlike B2C products, which target individual consumers, B2B products are designed to meet the complex needs of organizations.
B2C is like a tree. You water at the root, and all parts of the tree flourishes equally. B2B is like lawn. You have to water every square inch. Ignore some part of the lawn, and it will wither and brown.
B2B organizations can vary from your corner business with 3 employees all the way global conglomerates like GE, IBM, JP Morgan, Citibank etc.
How is B2B SaaS Different from B2C SaaS?
While both B2B and B2C SaaS models involve delivering software over the cloud, they differ significantly in terms of target users, sales approach, and product design. Here are the key differences:
1. Target Users:
B2B SaaS is designed for businesses. It focuses on solving problems that companies face, like improving productivity, managing customer data, or optimizing supply chains. For example, a B2B SaaS like Slack helps teams within companies communicate and collaborate.
B2C SaaS is designed for individual consumers. These products aim to solve personal problems, like managing finances, tracking fitness, or providing entertainment. For instance, Spotify is a B2C SaaS that provides music streaming for individual users.
2. Sales and Marketing Approach:
B2B SaaS sales often involve a longer sales cycle. This is because businesses need to evaluate the software, consider how it fits into their existing processes, and ensure that it meets their security and compliance requirements. The sales process might involve product demos, trials, and negotiations with multiple stakeholders, such as IT managers and finance departments.
Example: A large company considering a CRM tool like Salesforce might spend weeks or months evaluating it, testing it with a small team, and negotiating pricing based on the number of users and features required.
B2C SaaS typically has a shorter sales cycle. It often focuses on self-service—the consumer can sign up for a subscription directly on the website, try a free version, and convert to a paid plan if they like it. The decision-making process is usually much quicker because it involves an individual rather than a team.
Example: An individual might sign up for a Netflix subscription after a short free trial, based on their personal preference for the content.
3. Pricing Models:
B2B SaaS pricing is often tiered based on the size of the company or the number of users. It may also include custom pricing for large enterprises. Pricing can vary significantly depending on the scale of usage and the complexity of features.
Example: A company using Zoom for its entire organization might need a custom enterprise plan with advanced security features, while a smaller business might just use a standard plan.
B2C SaaS pricing is generally simpler and standardized, offering a few straightforward tiers for individuals or family plans. It’s designed to be easy for consumers to understand and choose based on their needs.
Example: A person might choose between Spotify's free, individual, or family plan based on the number of users in their household.
4. Product Design and Features:
B2B SaaS products need to cater to complex workflows and integrations. Businesses often have existing systems, like accounting or ERP software, that new tools need to integrate with. B2B SaaS products often include advanced features for reporting, analytics, and data management.
Example: HubSpot integrates with email marketing tools, customer service platforms, and more, making it suitable for companies that need a unified system for managing all customer interactions.
B2C SaaS products prioritize user experience and are designed to be easy to use for individual consumers. They focus on simplicity, speed, and intuitive design, as users are less likely to invest time in learning complex software.
Example: Duolingo, a language-learning app, is designed to be fun and engaging, with gamified elements that keep users motivated.
5. Support and Customer Success:
B2B SaaS often requires more personalized support and onboarding because the software might be more complex, and businesses want to ensure that their investment is fully utilized. Many B2B SaaS companies have dedicated customer success teams that work closely with clients to ensure successful implementation.
Example: A company like Zendesk might assign a customer success manager to help a new client set up and optimize their customer support platform.
B2C SaaS usually focuses on self-help resources like tutorials, help centers, and automated support. With a large number of users, it's impractical to provide personalized support for each customer.
Example: Spotify has a comprehensive help center and community forums where users can find solutions to common issues.
Examples of B2B SaaS Products:
Customer Relationship Management (CRM):
Tools like Salesforce and HubSpot help businesses keep track of their interactions with customers, manage sales pipelines, and automate marketing efforts.
Project Management Software:
Products like Asana or Trello help businesses coordinate tasks, assign responsibilities, and track progress across teams.
HR Management Tools:
Workday and BambooHR help companies manage their employees, from recruiting and onboarding to tracking performance and managing payroll.
What are the unique challenges of B2B?
While all software development is challenging, let me outline a few specific challenges for building in B2B.
Heterogenous Needs: Even businesses in the same industry can have different ways of doing things. This makes it hard to create a product that works for everyone. For example, think about accounting software: every business needs to track its money, but they might have different rules or methods for doing it. For example, one airline might depreciate it’s aircraft using a specific method while another airline uses a different method. There are 14 methods of depreciation at least. Now add other complexities like revenue recognition rules, tax rules and things can get complicated. And this is within an industry. Span across industries like health care, manufacturing and you have apiary ball of mess in your hands.
Multiple Personas and Role Based Access: In B2B, there can be multiple personas who use your product. e.g. sales reps, sales operations, finance, sales leaders, CEO. Each of them have their own unique needs. Designing for every persona while keeping the core experience is quite challenging. Further, organization limit access to actions and records which require building robust role based access. e.g. Sales reps cannot view other sales reps sales opportunities but sales leaders can, employees cannot access personal information of other employees but managers can. And when you build these tole based accesses, your product starts to become complex, reporting slows down, testing becomes a challenge.
Risk and Stability: Large companies want products that are stable and secure. They don’t like surprises or disruptions. So, product managers need to focus on security, reliability, and planning for emergencies. Organizations will choose not to invest in a product if there is a small risk of shut down or down time.
Getting People to Use New Tools: When introducing new products to large companies, it can be hard to get employees to change how they work. It’s not just one person who needs to change their habits but an entire department or company. And it takes time to manage the change. It’s important to have strategies to help people adapt and see the benefits of the new tool. Adoption is always a challenge across an organization. Mixed adoption is a bigger challenge i.e. some users adopt while others don’t.
Working with Existing Systems: Enterprise products often have to connect with other tools and software that a company is already using. This can make building and launching new products more complicated. Without these integrations, your app is an island and its overall utility is diminished. B2B customers might prefer something less valuable as long as it has the various integrations to other systems. The overall value of having interconnected systems is far more valuable to an org.
How to be a better PM in B2B?
Improving as a Product Manager (PM) in the B2B space requires a mix of deep customer understanding, strategic thinking, and domain knowledge. Here are some actionable ideas for growth in B2B product management:
1. Understand Customer Needs Deeply
Conduct Regular Customer Interviews: Engage directly with customers through interviews to understand their pain points, workflows, and desired outcomes. For example, shadowing a customer’s workflow for a day can reveal inefficiencies that your product could address.
Host Customer Advisory Boards: Create a group of power users and decision-makers from key accounts. Meet quarterly to discuss product direction and gather feedback on recent releases.
Use Customer Journey Mapping: Map out the end-to-end journey of how customers interact with your product, from initial onboarding to everyday use. This helps identify friction points and opportunities for improvement.
2. Build Strong Industry Knowledge
Immerse Yourself in Industry Trends: Read industry reports, join relevant webinars, and subscribe to newsletters that cover the latest in your customers’ industries. For instance, if your product serves the financial sector, staying updated on new regulations can give you a competitive edge.
Attend Trade Shows and Conferences: B2B events offer a chance to meet industry leaders, customers, and competitors. You can gather insights into emerging trends and network with potential users or partners.
Learn from Sales and Customer Success Teams: Your sales and customer success teams are constantly interacting with customers. Schedule regular syncs with them to understand the most common objections, feature requests, and areas where the product could deliver more value.
3. Strengthen Necessary Technical Skills
Get Comfortable with Data Tools: Learn to use analytics tools like Mixpanel, Google Analytics, or even basic SQL to analyze product usage patterns. This allows you to identify underused features or areas where users may be getting stuck.
Understand Security and Compliance Basics: In B2B, especially in regulated industries like healthcare or finance, security and compliance are top priorities. Familiarize yourself with standards like GDPR, SOC 2, or HIPAA, which can inform your product’s design and roadmap.
4. Focus on Building Relationships with Key Stakeholders
Develop Customer Champion Relationships: Identify power users within your customer base who can advocate for your product internally. This can help improve product adoption and retention. For example, if a particular feature solves a big problem for a customer, work with them to create a success story that they can share with their peers.
Align Closely with Sales and Marketing: Understand the sales cycle and messaging that resonates with your target customers. This alignment ensures that the product’s value proposition is effectively communicated.
Engage with External Partners: If your product relies on third-party integrations or partnerships, spend time building strong relationships with those companies. For instance, co-marketing with a complementary software provider can expand your reach and show customers how the combined solution meets their needs.
5. Improve Your Strategic Thinking
Develop a Strong Value Proposition: In B2B, customers care about ROI and efficiency gains. Focus on how your product drives measurable results like time savings, increased productivity, or reduced costs.
Create a Clear Product Vision and Roadmap: A well-defined product vision helps align the entire team. For example, if your vision is to simplify data management for enterprises, all new features should tie back to that goal.
Focus on Building for Scalability: Think about how your product can grow with your customers. For example, consider how features like multi-tenancy or user permissions can support the needs of larger enterprise clients.
6. Enhance Your Leadership and Influence Skills
Practice Storytelling: Learn how to communicate the product vision in a way that resonates with both internal and external stakeholders. This is especially valuable when pitching new features or initiatives to senior leadership.
Manage Upward Effectively: Keep senior leaders updated on key metrics, wins, and challenges. This ensures you get the support needed for critical initiatives and helps demonstrate the impact of your product decisions.
Host Internal Training Sessions: Sharing insights with other teams about new features, customer feedback, and industry trends can position you as a go-to expert within the company.
7. Focus on Metrics and Outcomes
Identify Key Metrics for Success: Define metrics that align with the business goals of your customers. For example, if your product improves sales productivity, track metrics like "time saved per sales rep" or "increase in closed deals."
Set Up Feedback Loops: Use customer feedback, analytics, and user behavior data to constantly refine your product. This could include running A/B tests for new features or collecting feedback through NPS (Net Promoter Score) surveys.
Study Churn and Retention: Understanding why customers leave or reduce their usage can provide valuable insights. Regularly analyze churned accounts to find patterns, and use those insights to make product improvements.
By focusing on these areas, a B2B product manager can better understand their customers, the market, stakeholders and build stronger relationships, and create products that truly solve business problems. These strategies will help you become more effective in navigating the unique challenges of the B2B market.
Can you cross domains?
Finally, a million dollar question.
If you are a B2C PM, can you transfer over to a B2B domain. And vice versa.
Short answer…it depends.
I have seen some PMs successfully do the transition. After all, having the product related skills is much more important. Which incudes, understanding your market, customers, users, alternatives etc. So in theory, any PM should be able to work in any domain.
But in practice, it’s a bit complex. For example, if I am a fast growing startup in say Health care, then I need someone who is experienced in that domain. It’s going to be a challenge for getting a PM from say a gaming company to lead a product in Health care. The DNAs are different.
If you are interviewing cross domain, then I suggest to learn as much about the target industry you can and be knowledgable enough to answer the questions. Your chances might increase.
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