B2B vs B2C Product Management
There are many similarities for Product Managers who work either for a consumer-oriented product (B2C product management) or for specific business users product (B2B product management) -- similar to the company's size which I talk about here. There are some key differences that I will try to focus on from my experience.
(1) Business Model - How do you make money?
We all want to create a product that users love, but of course it needs to make money.
B2C products typically generate revenue from many customers (i.e., thousands or millions) with small transactions (i.e., subscriptions, purchases, ad impressions, etc.)
B2B products typically generate revenue from a handful of companies (i.e., tens or hundreds) with larger annual contracts (i.e., 5-7 figure contracts). For example, the first B2B product I worked on had 2 companies that comprised 80% of our revenue and enabled us to be cashflow positive.
B2B products could have 1-5 customers who drive the majority of their revenue; thus these customers carry a lot of influence over product development priorities (especially when first launching a product).
(2) Stakeholders - Who do you mainly work with?
The sales funnel is fairly different with different points of emphasis which influences who you will work more closely with.
B2C products perform well with high volume of impressions (led by marketing) to the product while user experience and usability will keep users and converted to paid conversations (led by Product and Design). Customer Success Managers will engage with your many customers to ensure they are happy for retention. You will run more experiments which means either you will analyze the data yourself or you will work with data scientists or business analysts.
B2B product sales cycle are more complex and can longer to develop larger meaningful contracts ($XXXk contracts will have a lot of hoops to jump through). For example, I have worked with B2B products with 30 day sales cycles (very short) and others with 6-12 months. Talking to the right people at a company to nurture a successful contract is essential (led by Sales) while created business value and functionality will help convert prospective users to customers (led by Product and Design).
You will work with similar stakeholders in either B2C or B2B products, but in general B2C Product Managers will work more closely with Customer Success and Analytics while B2B Product Managers will work more closely with Sales and Design.
For example, as a B2B PM I would commonly be part of our sales cycle to help our Sales team to answer difficult questions and hear directly from prospective users about their needs. When I was B2C PM, I would often meet with Customer Success to learn about common user problems or questions.
B2B requires more stakeholder management and caution. Losing 1 customer could be big (whereas losing a customer in B2C is not as big of a deal) which requires to get more team alignment (especially with sales). B2C has more leeway thus can experiment more.
(3) Discovering User Needs - What do users care about?
Great Product Managers understand their user needs deeply to quickly figure out who they are building for and why. Determining who will use your app is essential for effective marketing and sales.
B2C users are typically everyday person who is focused on their experience. You tend to break these users down by demographics (e.g., location, age, gender, income, hobbies, interests, etc.).
B2B users are often more targeted to a certain persona or industry who is focused on increasing revenue, saving time, or decreasing cost. They tend to be more sophisticated about their problems which means you need to understand your user more. You learn significantly more from a B2B customer call than a B2C customer call. You tend to break these users down by demographics and firmographics (e.g., job title, department, company size, industry, etc.).
How you discover a user's needs is fairly different.
B2C needs tend to be discovered more quantitatively. The higher number of users can be leveraged by using analytics and surveys to isolate which personas are most common (or have the most favorable metrics). To confirm user needs / wishes, experiments (A/B testing) can be ran with statistically significant results. Identifying needs leans more towards behavioral psychology.
B2B needs tend to be discovered more qualitatively. Each user is more influential and more knowledgable about their nuanced needs, so you can learn a lot more through user interviews. It is especially important to build relationships at different levels of a company (c-suite to junior) as your product might have multiple users and/or customers (more details below). These users typically are looking for you to remove a blocker or make a workflow more seamless to help their business.
For B2B products, the person buying the product isn't usually the one who uses it. This means you might tailor your marketing and sales towards the Customer (i.e., Boss) to convert a sale but your product's functionality towards retaining the user (i.e., employee).
Solving customer problems and user problems concurrently, while very difficult to do, is how you build great product for enterprise.
(4) Product Roadmap - How should you prioritize?
Great Product Managers ensure their roadmap is properly prioritized and syndicated with the entire team. The roadmap is critical to ensure everyone has the same vision and goals; however I think there are subtle differences with B2B and B2C products.
B2C roadmaps tend be more flexible (because of the more experimentation nature of features releases) and less visible. Because
B2B roadmaps are absolutely essential because it distills your company's strategy. People use the roadmap to determine if they will remain or become a customer. Prioritization is often more rigorous to weigh influential customers vs your end vision (more of a balancing act). More factors go into the roadmap prioritization such as the sales funnel, existing big customer accounts, marketplace activity, technical feasibility, etc.
Because the B2B product roadmap is more visible and is used more often with stakeholders, there are higher expectations on its prioritization rational. The Sales team will also have more influence on roadmap prioritization. For example, I have worked at B2B startups where I would often discuss our roadmap in sales calls to either (a) an influential existing customer to help convince them to upgrade or retain or (b) with a prospective customer to help convince them to use us.
(5) Launching features - How do you release features?
B2C feature releases can be launched more adhoc and typically have a A / B test plan. With a A / B test, a Product Manager will launch a new feature to a smaller cohort of users and measure predefined metrics to determine a new feature's success -- if the A / B test is successful then the Product Manager might roll out the feature to more users or if there are mixed results then the Product Manager might experiment with other changes.
B2B feature releases are often bundled together and launched at the same time in order to avoid disrupting a customer's workflow. Since B2B users often use the product for something related to their work, B2B products should avoid disrupting a users work as this will create a high level of frustration along with potential large revenue or cost impact. Releases might need documentation or a method to get feedback accompanied with a release.
Functionality and ease of use are important for everyone. B2B users will put up with a clunky UX if the product solves a main piece of functionality (more about what your product can do and less about how to do it) -- these users will always be pushing to expand capabilities. B2C products don't have the same pressure to continue adding new features -- it is more important to do a few things very well and easily to appeal to a broad, diverse audience. B2C products typically launch features less frequently based on strategic objectives instead of specific customer requests.
The responsibilities of B2B and B2C product managers are still very similar and require many of the same skills and tools; however their goals and day-to-day execution can differ significantly. A Product Manager might even work at a company with both B2B and B2C products (i.e., I worked at a labor management startup with this scenario)
Both B2B and B2C products have their benefits and pitfalls, such as B2B product managers might get frustrated that decisions are made with less data while B2C product managers might get frustrated with a wide range of users and lack of clarity.
For your own career, you might find yourself more excited about B2C products or B2B products, but luckily there are enough similarities that you can alternate between different products types throughout your career.