B2C and B2B Product Management: What’s the Difference?

We’ve already covered several different topics explaining product management and breaking down what it typically entails. We know that a PM’s role can vary depending on the industry, company size, and product nature. One important differentiator a PM needs to consider is what type of product they’re working with. In this case, B2B or B2C. Many products serve both groups, so being able to differentiate which group needs which features is essential for a PM when building these products.

Understanding the difference between a consumer product and enterprise product is the first step of learning the persona of the end-user, and mainly where we see differences between the role of a B2B and B2C PM. Let’s break down a few examples:

Consumer/User Persona’s & Audience Size

In a B2B scenario, your product has an enterprise focus; meaning, success is derived from your product delivering value to the business and its users. Consider an enterprise-type software, designed to improve functionality and efficiency in an office environment. The buyer is the enterprise (typically not the end-user), and the users are the employees who populate the enterprise. On the flip-side, the buyer of a B2C product is usually also the end-user. Further, enterprise users are also likely to have different uses for the product, as well.

Rajat Harlalka, of MindtheProduct, gives a great example of how B2B enterprise software can have different functions depending on the user: “Here, there is tremendous space for variation in user context and user needs. An IT administrator in the CIO’s organization would use such a tool very differently from a developer who reports to a VP of engineering. Each audience would need to have their needs (both features needs as well as UI design/consumability needs) met, or ignored, as a strategic decision by the firm building and marketing the product.”

In most B2B cases, your end-user audience is likely on a smaller scale than a B2C product. B2C products, on the other hand, tend to have a much larger, more diverse user-base of individual consumers. For a B2C PM, you’re focusing on the end-users as individuals, paying close attention to demographics like age, gender, location, etc. Whereas a B2B PM will focus on the end-user as a professional, paying attention to things like job titles, company size, budgets, and departments.

Product Features and Usability

When it comes to product features and what exactly consumers and users are looking for in a product, B2C and B2B PMs tend to see a pretty drastic difference. While both consumers and users pay attention to product features, according to ProductPlan, in a B2B setting it’s more likely for users to “put up with a clunky UX if it gets the job done,” while “consumers will head for the hills if an app is difficult to use.” So, it’s important to remember that in most cases, B2B users pay more attention to what the product can do, its main functionalities and features, and less attention to how to do it. The product features are what fuel its development in a B2B product scenario.

For B2C products, it’s not so much about the features, but more about the usability and functionality; so here, UX is critical.

Pricing, User Volume, and Expectations

The way users and consumers pay for their products is also a significant difference between B2B and B2C products. How they pay commonly dictates what their expectations are. In a B2B purchase scenario, there’s often a sales cycle with contractual agreements and feature requests that bring along various terms and conditions; according to ProductPlan, there is more leverage within the relationship. “Not only can they threaten to not renew or expand their number of seats, but they could also demand refunds or bring up legal action if a product impacts their regular course of business.”

B2B products also tend to have fewer buyers at a much higher revenue than a B2C product, with more expectations and demands. A B2C product, however, may have consumers paying a lower cost and fewer contractual expectations regarding support and service. So, individual consumer losses would impact a company much less than losing high revenue enterprise accounts or contracts.

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This article was originally published on davesilverstein.co. For more of Dave’s insights, check out his blog of follow him on Twitter.