B2C vs B2B Product Planning Approach: How Are They Different
Updated: Mar 13, 2021
The majority of software products can be split into two main categories, B2C and B2B. B2B products are focused on selling their software to other businesses (e.g., Google GSuite for business productivity tools, Slack for business communications, etc.). And B2C products are built for the consumers, who typically are the end-users of this product (e.g., Facebook, MyFitnessPal, Uber, etc.).
Product managers are generally familiar with this difference between B2C and B2B products but do not always know how it affects the product roadmap planning approach. Let's look at specific differences between B2C and B2B products, which might affect the product roadmap planning process.
First, B2B and B2C products differ in their way of approaching customers.
B2C products are focused on building a very tight emotional relationship with an end-user. An example of it is the user checking Facebook page for the 20th time in a day or looking at Instagram feed to see what's new. These customers rely on these products to be available to them whenever they need them, but they aren't using them to solve any particular business goal. B2C customers typically don't have specific new feature asks, or least not on a specific timeline but appreciate any improvements to the product's overall user experience.
On another side, B2B products are intended to solve a specific business problem (e.g., Slack to enable communication within the company, GSuite to improve business productivity). B2B customers, most of the time, are very opinionated about new functionality they might need to stay on top of the game in their respective markets. Most B2B companies typically have an Account Management function, whose responsibility is to engage with existing customers regularly and understand their current and future needs. These needs are brought up to the Product team for prioritization.
Another significant difference between B2C and B2B products is customer expectations around product availability.
In a B2C scenario, customers typically don't think about product availability since they are using it for personal needs. For example, if FAcebook isn't available for a couple of hours, its users will be disappointed or annoyed at most, but it wouldn't impact their business. It doesn't mean that customers will be happy if the product is intermittently available all the time, but occasional hiccups aren't disastrous.
While in the B2B world, where each B2B product is powering multiple businesses with lots of employees using it, the product's availability expectations are very high. For instance, if GSuite isn't available for a few hours, it would mean that companies using it for an internal collaboration will be severely impacted and won't be able to perform their business functions during that time. The costs of such hiccups are very high as well.
Lastly, B2C and B2B products differ significantly by their potential customer commitments, either coming from the top customers or during the sales cycle for the B2B products and the absence of the following for the B2C products.
Successful B2C products hopefully have millions of customers, where it's almost impossible to have close relationships. Instead B2C companies will look into the customer cohorts to understand behavior patterns, and improve their experience typically by experimenting.
B2B products typically have a smaller number of customers, which gives these companies a chance to build much closer relationships with the select group. B2B companies typically have so-called top customers (either famous brands or high paying customers), which they want to keep happy. Most of the time it means that their feature asks need to be treated with higher priority. Because of the direct sales approach for B2B software, some deals might be signed with promises made to make some functionality available to the prospective customers. Such promises will land on a product roadmap.
There are just a few examples of how B2C and B2B products differ, but even they give a sense of needing to choose a different approach to the Product Release planning.
B2C product planning process is typically more lightweight, has a lot of room for experimentation, and typically follows Agile/Scrum approach. Absences of direct customer commitments allow the process to be more focused on the outcomes/goals needed to be achieved and bets/experiments that might help to get there. The product might be shipped directly to customers after each sprint or even daily, have experimental capabilities that can easily be reverted back, and have less predictability when certain capabilities become available.
B2B products, on the other hand, require a more thorough approach, which is typically a combination of Waterfall method for the larger release planning, but Scrum for day-to-day operations. Most people refer to it as an Enterprise Agile, which allows to have a clear backlog upfront, but still use Scrum to iterate.
Its product planning process requires more predictability when certain features are going to be available to the customers (especially if they are contractual commitments to the customers); it also requires mid-to-long-term product roadmap visibility for its customers, so they can plan activities on their side as well. Customers of B2B products typically aren't that open to experimental feature capabilities, especially if there is a risk of introducing backward-incompatible changes that might be very expensive at the end.
Because of the B2B products complexity, there are multiple teams building the same product and thus require some approach aligning on priorities so that teams can unlock the most critical business value first. B2B products, while they can be released daily, typically do it behind the feature flag and make the new functionality available to the customers when the most value is unlocked to minimize disruptions to the business flow.
Most B2B products typically have a more thorough approach to quality management, thus treating critical issues as an important part of the product roadmap, sometimes needing to have predictability and visibility when the fix is going to become available.
While there's a trend to follow an outcome-driven roadmap planning approach, B2B product planning still requires a more thorough approach because of its nature, customer commitment, and possible financial implications. B2C products, on another side, are less sensitive to mistakes and can be managed to outcomes and driven by product experiments/bets that can help solve the problem.