USS Enterprise 101
In our experience, we have found that there are a lot more resources on the internet to understand B2C product management, than B2B/enterprise. At the core, product management for B2B and B2C rely on the same fundamental principles, i.e. understand your users well and solve problems for them. However, when you get down to the details, there are some notable differences. If you have ever been unable to relate to metrics like DAUs and session duration, then this is the place for you.
In this post, we want to talk about a few things that a B2B/enterprise product manager has to do differently from someone in B2C.
What’s easier?
Better access to the customer
Your company usually has a sales team who can get you direct access to your customers. You can talk to the actual users and buyers about their experience with your product. You do not need to infer too much from data since you can just pick up the phone and call a lot of your customers.
Outcomes are directly measured by revenue
With most B2B products, there is usually no need for proxy metrics (like DAU) to measure how well your product is doing. It is usually tied to a revenue number (i.e. your product needs to sell $X in licenses in Q1), which makes it easier to understand when you are doing well (or not).
No need to solve for daily/weekly activity
Enterprise products (with some notable exceptions, like Slack, Zoom etc.) have a different view on user engagement. Daily or weekly user activity is not a good indicator of anything in Enterprise products, so you do not need to solve for it. NPS (Net Promoter Score) and direct customer interviews are usually good enough to understand more about adoption issues with your product.
What’s harder?
Not enough data
A flip side of enterprise products is that the volume of data that you get from your users is not even in the same order of magnitude as consumer products. When consumer products add thousands of new users every day, a good week for an Enterprise product is when a few hundred people adopt it. You must be okay with taking decisions based on a smaller amount of data and anecdotal evidence. Additionally, measuring the efficacy of a newly released feature is much harder, especially when your product has on-premise deployment models.
User != Buyer
This is one of the hardest problems to solve for an enterprise product manager, and well, there’s no silver bullet for this. As a wise man once told me, “Solve market problems for sales, usability problems for adoption”. Your buyers, who are usually SVPs or CXOs, are looking for products which help them increase revenue or reduce costs. You have to clearly demonstrate how your product helps them meet either one of those goals. The actual end users have little decision making power when it comes to getting your foot in the door.
However, the renewal of your subscription is dependent on the users’ feedback of your product. Here is where you will need to really understand your end users and build features to make their lives easier, even if it may not directly impact the revenue or cost for your customer. Understanding the balance between features to build for your buyer v/s the end user is an art (we are still trying to get better at this too!).
You cannot ignore some users
The per-user sway on your product is a lot more in B2B Enterprise than B2C. It is not uncommon in Enterprise products to build features that are useful to only one or two customers. This goes against the B2C product management ethos (do not solve a 1% problem), but when one of these customers contributes to 20% of your revenue, you have little choice in the matter.
Competitive analysis is harder
Understanding your competition is much harder in B2B. Consumer product managers can directly get access to their competitors’ offerings since they are easily available. However, enterprise products are notorious for requiring potential buyers to talk to their sales team before they give you a trial, and in some cases, even if you want to understand the pricing of their product. And rest assured, they will not talk to you if you are a competitor.
What’s just different?
Professional services
As an enterprise company, you cannot avoid the reality that customers need help implementing your product. And even if you focus on making your product easily deployable, large customers will almost always require customizations to make it work with their internal processes. Having a professional services arm or working with a third party to provide this service is a given. As a PM, you will need to consider their input when building features too. So you now have three parties to think about: the buyers, the end-users and your professional service partners.
Security, audits and certifications
Enterprise product managers spend an inordinate amount of time, especially when building new products, in ensuring that the product meets the stringent security standards of large companies. This cannot be taken lightly since B2B companies sign legally binding agreements with their customers which leaves you open to lawsuits if there are security breaches. Security certifications like PCI DSS (if you are working with credit card data) and HIPAA (if you are working with healthcare data) are table stakes if you want to have a shot at working with the largest companies in the world.
Longer lead times
Enterprise products take longer to go from the first meeting to the first deployment. It is not uncommon to see this cycle take over 6 months in some companies. A product manager needs to think about what they can do to reduce this, since this directly affects the profit per customer. Building features alone will not help this. Creating the right collateral, writing FAQs for potential customers, crafting customer case studies among others, also helps reduce this time drastically.
User feedback
Growth in B2B is a holistic approach that targets different personas in the entire sales funnel. Products such as Slack or MongoDB or Twilio used a bottom-up approach where they targeted developers for adoption and the popularity of the tool bubbled up. As a product manager, understanding the end user persona and targeting the right group is paramount. Additionally, having active feedback channels in terms of NPS (Net Promoter Scores), CSAT (Customer Satisfaction Surveys) to capture the customer response will help PMs fine tune the product strategy and feature set.
Monitoring community forums often yields the most pressing pain points customers face. Having vocal customers is akin to having them on your sprint planning meetings helping PMs prioritize features. In the early days of AWS, one outspoken customer, Lowflyinghawk, was often consulted on new features, pricing etc. The team often sought their help so much so that one of the Amazon buildings is called Lowflyinghawk. Early adopters and active community forums are a PM’s biggest assets. PMs can use their help to test out early versions of the product, fine tune it with them and then address the bigger market once the kinks are ironed out.
We hope this helps new or would-be B2B/enterprise product managers get a sense of how their work is going to be different. We are going to dive deeper into specific topics in our upcoming posts, so stay tuned!
PS: Follow us on Twitter at @pallavi_sreeram and @shreyas94!
PPS: Connect with us on LinkedIn at Pallavi Sreerama and Shreyas Karanth
