Building products for consumers, businesses and internal stakeholders
The role of Product Managers has been gaining importance in the organisations over the past few years and it varies with the organisation’s growth phase, size and type of business. Even in the same organisation, the expectations vary from PM to PM. Having worked in three different types of environments building products for the consumers (referred as B2C products henceforth), businesses and internal stakeholders, I have observed differences and similarities in the role of PMs managing products across these environments. The objective of this post is to highlight the nuances of Product Management among these 3 environments. Generally, we hear about the differences between B2C and Enterprise Product Management. Here, I’d like to delve deeper on enterprise products built for external businesses (referred as B2B products henceforth) and for internal stakeholders/users separately.
What is Product Management?
It’s commonly heard that a Product Manager is like the CEO of the product or as someone who acts as an intersection of business, technology and user experience. I perceive Product Manager as someone who does the following
- Identify the business problems
- Validate if it’s worth solving the problem based on its size
- Devise a solution to the problem
- Build the solution
- Measure the impact of the solution
Product Management — B2C product Vs B2B product Vs Internal product
While the above 5 aspects are common to Product Management of all the three types of products — B2C, B2B and internal, there are significant differences in the following dimensions, as explained further.
- Goals
- Product discovery
- External factors
- Pricing
- Impact
- User experience/UI design
- Goals
Products are built to help the organisation meet its revenue or operating income goals. One of the biggest components which impacts the operating income is SG&A (Sales, general and administrative) expense. Most of the internal products are built to bring down SG&A expense. For example, in a retail business, the employees may spend a lot of time in identifying the location of an item in the warehouse or on managing cash in the store. Such problems could be solved by building the right solution to reduce the expenses.
On the other hand, Product Managers (PMs) managing B2C or B2B products contribute directly or indirectly towards improving the top line (revenue) or ‘growth’ of the organisation. The primary objective of all the products is not to scale up the revenue alone. In B2C products, say, in an eCommerce business, the focus could be on improving the user acquisition, engagement, or retention. The PM focusses on keeping the users happy and ensure that the product is delivering value to the users. All these products indirectly lead to an uptick in the revenue eventually. Some examples of direct revenue generating products are subscriptions, monetization products, and purchases. Similarly, we have SaaS products in B2B space with revenue generation as the primary focus.
2. Product discovery
Product discovery is a critical process of understanding the customers in detail to develop products which perfectly meet their needs.
In B2C products, the data captured in the web/mobile app and heat-map analytics tools helps the PM derive many insights. Besides the data analysis, it’s also important to interview the users and perform user testing to understand their needs and apprehensions. The PMs can also leverage customer support chat sessions and call recordings which are like a huge gold mine to understand the users.
In B2B products, the most important source of insights on customer needs is the sales team who directly interact with the clients. It’s important for the PM to join the sales pitch meetings to gauge the customer needs and competition. Of late, the behaviour of the end users of B2B products are also being tracked using web/app analytics.
In an internal product, the internal stakeholders act as a primary source of insights. However, it’s important to validate the needs and problems by doing research with the end users.
3. Focus on external factors
It’s very important for the PM to keep a track of the external factors and competition in order to adapt fast to the changing conditions.
Talking about an example of B2B environment, Apple announced that it’s making a radical change in its new iOS 14 which is expected to impact the way mobile advertising works on iOS devices. In such cases, a PM managing AdTech products should ensure that the product addresses such changes by keeping himself/herself updated of the changes in the industry
Even in B2C products, it’s equally important to track the external factors especially the direct and indirect competition. Sometimes, it’s fine to not reinvent the wheel. The PM can emulate and enhance the competitors’ features which have become popular with the target group. For example, WhatsApp added Status feature with the success of Snapchat’s Stories which improved the user engagement.
On the third side, the product strategy and roadmap of an internal product is not likely to be influenced by external factors unless the product is tightly coupled with a 3rd party product.
The PM should also be watchful of regulations by the regulatory bodies like FinTech products irrespective of the type of environment.
4. Pricing
Pricing is one of the critical skills needed in PMs as it has a significant impact on the conversion rates and profitability.
In B2B SaaS products, PM plays a critical role in determining the price and the factors on which it should be priced like the number of users, events and storage etc. The PM should analyze the competition and understand the apprehensions in adopting his product.
Talking about a B2C product, the PM managing in-app purchases (IAP) in a mobile app game, should price the purchases at an optimal point to maximise the revenue while focusing on user engagement and retention.
On the other side, pricing is not a relevant aspect of PMs managing internal products. However, they do need to evaluate whether the product should be built in-house or should go for an already existing 3rd party solution.
5. Impact
Measuring the impact of the product/product features is one of the most important skills of a PM. It’s important to track the right metrics aligned to your business goals depending upon the type of product.
In a B2C product, impact can be measured by tracking the metrics on conversions, engagement and retention etc. using web/mobile app analytics tools.
In a B2B product, metrics like revenue, active users, number of clients and average time taken to complete a task etc. should be tracked. We can use analytics tools to track most of them.
In an internal product, the total time taken, no. of man hours needed to complete a task or cost savings etc. can be tracked.
6. User experience & UI design
In a B2C product, the consumer is the decision maker whether to continue using the product or not. Hence, it’s of utmost importance to ensure that the experience of consumer is of supreme quality. It’s important that the PM identifies those interaction points which lead to poor experience and points where they are getting stuck.
In a B2B product, users might come across instances where they get stuck. In such cases, they may need to resolve the ambiguities as they are obliged to use the product. However, with increasing competition, it’s important for the PM to ensure that the user experience is not ignored as the decision makers consider the experience of the end users as an important factor in the decision-making process.
In an internal product, UX is important to ensure that the user efficiently completes his task efficiently. However, the focus on the visual design may not be as high as that of a B2C/B2B product.
As a conclusion, all the three types of Product Management need different skillsets and strategy. At the end of the day, the PM’s objective is to help the business reach its goals. Some PMs may switch across the three types while some may have strong inclination towards one over the other.
