B2C vs. B2B product management – 16 differences


Most of my product management career has been spent doing B2B product management. For the last year and a half, I have switched over to B2C product management in my current role as Director of Product Management at Gazelle. Last 12 months has been a lot of fun learning a whole lot of new things in the consumer world. Given this learning, I have been able to create a long list of things that matter a whole lot more doing B2C product management that may not be as important doing B2B product management. Here we go:
  1. It is a millions game – Victory is declared when you have million+ customers, not hundreds or thousands (if your goal is to become the “brand” in the space you are in) unless you are in a niche market.
  2. There is one buyer most of the time – no technical buyer, no economical buyer, no user. The consumer is coming to your website with intention to buy something for themselves with their money. (exceptions do exist – for example, if I am buying something for my wife or kids or my mom – though this is not the mainstream use case).
  3. Short sales cycles – Ideally you want every customer to buy from you on your first visit (never happens, but the goal is to get as many to do this). There are no RFPs, no demos, no data sheets, no whitepapers, no lunches with prospects to convince them to buy. Your website is the demo – if they don’t like or understand something, they will leave and may never come back.
  4. Show me the money  – It is harder to monetize consumer products. A lot of apps, services are available for free, and consumers are used to getting products and services for free online. Consider a limited-feature free product or limited-time free trial offer, setting the stage and expectations that they will need to pay. Make sure that the value proposition is crystal clear to the customer.  Remember, they are spending their hard earned money and not their employer’s.
  5. Short attention span – KISS (Keep it simple stupid) principle applies so much in B2C. Use middle-school reading level language on your site – short, simple, easy to digest. None of the gobbledygook you can get away in the B2B world with (the reliable, scalable, innovative, high performance, architecture marketing BS) works.
  6. Details matter even more – Given the short attention span and the high propensity to go elsewhere (one mouse click away), everything from page load times count. If your page takes long to load (read that as more than 2 sec), chances of your prospect leaving go up exponentially, unless you are an established brand (read Amazon or Google).
  7. Product experience rules – Site usability matters a whole lot. There is no consulting, no professional services in the B2C world. Either the customer gets it the first time or by quickly looking through your FAQs or they just leave.  If your product is not easy to use, expect it to be returned (or if it’s a website, abandoned). Consumers rarely RTFM.
  8. Customer experience rules – You need to deliver a “crazy awesome” customer experience to every customer.  Over and above the product experience, you need to deliver an awesome experience at every touch point – whether it is customer care, online content, surveys, newsletters – you need to aspire to beat your customer’s ever rising expectations. Why? See #9.
  9. Social proof is mandatory – Consumers look for social proof – who else is using it, what do other think about it? Is this site real and trustworthy? Again, remember, they are spending their money and not their employer’s. And by social proof, I don’t just mean canned testimonials (which by the way lot of buyers do not trust), but instead they expect to read both positive and negative reviews about your service on the web, Facebook, Twitter etc. If you deliver an excellent experience, they will tell others. And if you deliver an awful experience, they will tell even more people and you will not even know. However, they do not expect you to deliver an awesome experience to everyone – some customers can just not be pleased and no company is perfect – you are bound to screw up at least in some cases. So if all they see are positive reviews, it could be a cause for concern (trustworthy?). So, instrumenting your product to allow your customers to easily share their experiences (good and bad) is important.
  10. Building brand equity matters – You need to appeal to the masses right from the word “go”, but it will take time. There is no fast way to get there. But once you have built and earned good brand equity, you will retain the consumer mindshare for a long time. For example, when it comes to buying books, do you think of Amazon or Borders? When you think about mp3 player – do you think of ipod or zune? When you think about search, do you think Google or Microsoft? When you think social media, do you think Facebook or Orkut? It took a lot of work for all these companies to get to where they are now. Why? Read #1 again.
  11. Web analytics – In the B2C world, you live and breathe “web analytics” – unique visitors, bounce rates, traffic sources, conversion rates, conversion lifts, funnels etc. become part of your everyday terminology. It is all about getting more customer traffic to your website and getting them to buy or do whatever that helps you make money. If you are running an eCommerce site, you want to make sure they find the thing they want and then buy it from you.
  12. Test, test, test – Getting ready for continuous A/B testing and multi-variate testing becomes part of your DNA. Consumers are fickle, they change their mind all the time. Hence, no matter how many usability tests you have done before you release changes to your site, it can never guarantee success. You need a lot of data points to declare a winner. The only way to find out is to release changes to production and then conduct A/B or multi-variate testing before you declare a winner. Be prepared for surprises, because what you think will win could turn out to be a sore loser.
  13. SEO, SEO, SEO – every page you create on your website needs to be SEO (search engine optimization) friendly. Why? Your highly qualified prospective customers will find you primarily via two mechanisms – 1) search engines when they are about to buy what you are trying to sell or 2) by word of mouth. So as a B2C product manager, you need to have a decent knowledge of how SEO works.
  14. Keep them loyal – As I have mentioned before, word of mouth is huge in the consumer world. Because it is not one person telling another, it is one person telling 10 of his/her family or friends. Consumers love loyalty programs – it is your way of thanking them and keep coming back. I still fly American Airlines because that is where I have the most miles. (I hate their customer experience, but I still remain loyal because of the miles).
  15. Respect their privacy – Ask only for personal information that is absolutely needed. If sensitive personal information is asked, explain how you would use it. If a consumer opts out of receiving marketing material from you, respect that.  Do not require them to “register” with your site to use your product/service unless required. Allow for “guest checkout”.
  16. Stay in touch – via newsletters, Facebook. Get them to “like” your FB page – use your page for periodic product updates, contests, relevant news, etc. Remarket to them with relevant content, coupons etc. But never, ever spam your customers.
Do you agree? What else are the differences between B2C and B2B product management that you have come across? Kindly share your thoughts via comments.

23 Responses to B2C vs. B2B product management – 16 differences

  1. Ranjit Nayak says:

    Gopal,

    Some of the items you list like test,test, test and show me the money are equally important in B2B. I would argue these are not differences between the B2B and B2C.

    The ease of use, customer experience and product experience would be important to Enterprises as well. A term I have heard is “Prosumerization” essentially implies that enterprise and business users are expecting the same kind of features they have on their iPad in their workplace.

    Ranjit

  2. Dan Callahan says:

    Very nice post clarifying the differences in approach for B2C vs. B2B. Do you have any thoughts on best practices for companies that address both markets? any exemplar companies?

  3. Larry Heimlich says:

    As usual, some very good observations that help clarify the differences between the B2’s. Unfortunately, I’ve seen startup companies get into trouble when they believe they can succeed in doing B2B and B2C simultaneously.

    This behavior is probably more a refection of the business plan and strategy that is not focused on a singular market. Defining the differences and the resources required for either might help those who wander back and forth stay on track.

  4. Giles Farrow says:

    Great post.

    My background is B2B and I have often thought about how B2C must be different as the volume goes up and price points come down.

    I would have thought that your connection and feedback is less direct in B2C as you have more layers of distributors and retailers between you and the customers. Sure you’ll hear a few loud voices, but do how you hear back from your mainstream customers?
    – market research?
    – social media

    Maybe a topic for another post, but how do you think your B2B experience is helping a B2C company? What can B2C learn from B2B?

  5. Mohamed Aneez says:

    Very nice post Gopal — agree to all your comments.

    –Mohamed Aneez
    http://passionatepm.wordpress.com

  6. Pingback: How B2B Product Marketing is Different from B2C | Rocket Watcher: Product Marketing for Startups

  7. April says:

    This is a great post! I think the people underestimate the huge differences between B2B and B2C when it comes to product management and product marketing. In fact you inspired me to write a post on how B2B is different from B2C here:
    http://www.rocketwatcher.com/blog/2011/05/how-b2b-product-marketing-is-different-from-b2c.html
    Cheers!
    April

  8. As a branding expert, I totally agree with the fundamental underlying premises put forward here.
    Essentially, consumer brands are far more sophisticate–and therefore require much more work to develop and execute (successfully) than B2B brands.
    Ironically, however, the amount of finance and attention put into them is frequently inverse–that is B2B brands are often better organized/categorized.
    This helps explain the (very) high mortality rate of new B2C brands…

    Bryce Winter
    Brand Architect,
    Brand CEO Coach
    CEO The MarkBrand Group

  9. Vikas says:

    Good post!!

    So, as per your experience how easy/tough it is to transition from B2B to B2C Product Management.

  10. I feel B2B products can do a lot better by picking up the good things from “B2C” products, chiefly delivering a better customer experience.

    I transitioned from a B2B to a B2C product management and when I was a B2B product manager the chief learning I had from my customers was that they always bench marked my products with other B2C products e.g. I led a project to improve “search” function in my B2B product and it was sooo much better than what it was but it was still not as good a experience as it was finding things on Google. I would get comments like oh why don’t you have the “Did you mean?” feature.

    So yes some differences are just due to the nature of business like large number of users, shorter sales cycle – but at times it’s also because the management of B2B companies have not fully woken up to the fact that their “B2B” user is more than just that – because they expect an experience equal to that they get from “B2C” products that they use in their personal life.

  11. Pingback: B2B vs. B2C « LaunchPad's Ready-Aim-Fire

  12. I would like to thank you for the effort which you have made in this article. There are really some nice tips to grab.

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  16. Ronnie Lapidus says:

    Awesome post! Key messages:
    Build and Protect your brand.
    Deliver and excellent experience. This means the online and the service experience. If you have negative reviews on service, new consumers won’t take a chance on you and you lose your repeat business.
    Make it easy! To find you in the marketplace, to understand why you should buy (what’s the VALUE for my hard earned money!), to understand how it works, to resolve issues through service when they arise (as they always do).

  17. Tamy Lockhart says:

    I think something that is not mentioned is that women do 75 to 85% of the buying for households and they currently feel that they are not really understood in advertising. I also agree that much of what is listed for b to c is valid for b to b. A bad reputation spreads in either environment.
    To understand online consumerism you should plug into demand by women. They are a great source for testing your UI. Men and women process differently.

  18. jpascalw says:

    Item 2 on your list is the main differentiator. I would add another, related, differentiator: It is not uncommon for personnel working on B2C products to have a natural need to use the product they are building (aka eat-your-own-dog-food). That is a huge advantage over B2B, where the product sometimes can become “loveless”.

  19. Times have changed! SaaS has really changed the way B2B companies will be doing business in the future. For a number of leading SaaS companies delivering B2B today, the only real difference is the ‘Top 2′ on this list – millions of paying customers and multiple buyers. That’s it! For example, the traditional sales cycles are vastly different than a few years ago. Consulting services will be focused on “configuration” or “integration” with enterprise systems and providing services that drive adoption, however no longer hired to “correct” product usability. The majority of this list will fall under responsibility of product marketing and product management roles at B2B vendors. The key question is, how will this change the way you do your job, or the skills required in the future? I say the writing is on the wall.

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  21. Alan Arnfeld says:

    This is an interesting topic, having also experienced both domains. I would argue that most of your points apply equally to both environments but that one important difference to add to your list is that in the B2B environment one is typically required to sell the product through a sales team rather than direct to consumers when comparing services delivered on the web. In order to overcome some of the challenges this brings it is important to train the sales team on a regular basis and deliver to them clear guidance through a best practice sales book on how to approach each product feature and present to the market.

  22. Pingback: The Fundamental Differences Between B2B and B2C Product Management

  23. Great post. Unfortunately, many startup founders do not fully understand these differences when they decide to start a B2B business. I wrote Lean B2B to help tech entrepreneurs understand the differences between B2B and B2C customer development. To me, the main differences are around the importance of the return on investment (ROI), the depth of the client relationships and the complexity of the decision-making process, which you mentioned in this list.Thanks for the great resource.

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