What are the top problems product management teams face?
Todd: Product managers, especially those new to their jobs, get buried in the tactical and underinvest in the strategic areas of their work. They often spend too much time on sales support, technical support or program management, and spend far too little time on market, customer and competitive analysis, strategy development, opportunity discovery with their engineering teams, pricing, etc. With the right balance between the strategic and the tactical, product managers can have far greater impact on their companies and products.
Varun: I agree to this. There has to be a mix of tactical and strategic work activities of PMs. Customer problems bring PMs closer to their product reality. However, they can’t afford to miss strategic areas such as problem discovery, competition and market trends tracking and analysis which give them opportunities for exponential growth. I believe an open question here is – If a product manager can play both inward and outward roles related to product management? The inward role means focusing on product development and outward role entailing product planning & marketing areas. If yes, how can you scale? Ideally, product management and product development need to be specialized functions.
What is the key difference in product management for B2B SAAS and Consumer internet (CI) products?
Todd: Developing a deeply analytical and intuitive understanding of customer needs is a fundamental part of product management – whether you are working in the B2B or consumer space. However, the tools to do this vary across the two areas. In both cases, product managers should get out and talk to customers – qualitative, ethnographic research – to develop a deep understanding of gains, the customers are looking for, and the pains they are looking to avoid.
We also want a quantitative, analytical understanding of our users – for example, how they use our software, what they click on, what features are used extensively, what areas are ignored, and where they get stuck. Some of this analysis has more meaning, and yields more insight, with the larger number of users in the consumer space, versus a smaller number in the B2B space.
Varun: As per my experience, the customers bring fundamental differences in product management approach although, the idea to serve them remains the same irrespective of the product. When we talk about customers, the observed differences are in terms of customer market size, customer expectations, their needs, risks, buyer-user personas. In CI, the end consumer is the buyer and the user itself. The segment size in case of CI is much larger and hence it requires more of a standardized product for a greater volume of customers. However, in case of B2B SAAS the buyer segment (companies/ individuals) is relatively smaller (ranging from few thousands to 100 thousand) and it is required to match the expectations of both the buyers and users of the product. A major part of the problem for B2B SAAS products revolves around solving needs of different businesses with standardization and making a necessary room for customizations.
The problems related to customer behavior and product acceptance is highly data-driven in case of CI, given the sheer amount of customers using the consumer app and making voluminous transactions. However, in case of B2B SAAS, it’s a mix of data-driven analysis where is application data points and customer feedback are equally important. Smaller customers base brings both advantages and challenges as they are relatively approachable for feedbacks. However, the captured data points might not help PMs paint a holistic picture.
Market Sizing problem seems straightforward for B2B SAAS as the size, industry, revenue and other parameters can be clearly defined and PMs can always get the answer to their problems with B2B databases available. However, for CIs market sizing is an abstract problem where the demographics of a targeted consumer comprise of emotional, behavioral and personality traits.
How does product speed vary for B2B SAAS and Consumer internet products?
Todd: Driving fast product evolution is one of our primary goals as product managers, both in the B2B and consumer space. This can be easier in the consumer space, for a few different reasons:
- Prioritizing and testing new ideas can be faster with consumer products because you can use tools like User Voice or AB testing. These tools can also be used with B2B products, but with a fewer number of users, you get less insight (and lower product speed).
- B2B software companies can get inundated with enhancement requests from critical enterprise clients, and these requests often provide little value to other customers and don’t help evolve the product.
- B2B customers, unlike consumers, can be resistant to change – they have stable business processes and don’t always appreciate fast product evolution.
Varun: I would rank the speed in the order of highest to lowest: CI, B2B SAAS, Enterprise Software for all the valid reasons as mentioned by Todd.
How does Competition Analysis vary for B2B SAAS and Consumer internet products?
Todd: In the B2B space, competitive analysis can be challenging. Competitive prices are hidden, user interfaces and workflow can be hard to access, and B2B customers may be limited by contractual agreements from sharing their experience with you. I’ve always wanted to sign up for competitive services, as a customer, but unless you mask your identity (which corporate lawyers discourage), you’ll get flagged by your competitor and they won’t sell to you.
All this is easier in the consumer space, where pricing is apparent, and it is much easier to get firsthand experience as a user.
Varun: PMs could see the CI competition moves on the front end as everything is open for the public access. Though CI products become tough to analyze from backend tech and design philosophies as there lies an abstractness in terms of competition’s layout of user experience and interactions which impacts consumer behavior and affinity to similar products. Say, it comes to a tough call to know why a customer would buy a mobile phone with same price and delivery time from Amazon or Walmart or eBay. For B2B SAAS, it’s relatively harder to find differences due to limited access to the product. Having said that, published B2B SAAS product demos, marketing material, videos, product manuals etc. can be easily available to make a first level analysis.
Pricing Strategy is one of the most significant parts of Product Management. Can you make contrast from different products perspective?
Todd: With B2B products, you may have sales representatives that can effectively position a product for an individual customer, promote its value, and consequently charge a higher price. With consumer products, you are often limited to more broad-based promotion through marketing communication materials (websites, videos, etc.).
Also, it is much easier to craft customized price proposals in the B2B space – giving you more flexibility to maximize revenue and profit.
Varun: CI products pricing is publicly available and lowest price point for same products is one of the key decision drivers for the larger customer segments. Though there are other major conveniences and emotional drivers of CI application and service can be directly and indirectly co-related with money. PMs need to crack the economics behind all the costs which the customer would pay to you rather than competition. For B2B SAAS, the competition pricing may or may not be publicly available. However, I see a trend nowadays of making the pricing publicly available by most of the B2B SAAS companies be it salesforce, HubSpot, Talk desk and so on. The main challenge lies in positioning your product at the price point basis your targeted customer segment – lower price, higher market size/ higher price, lower market size. That’s the call, a PM needs to make.
How to go about GTM Strategy for B2B SAAS and Consumer internet products?
Todd: With B2B products, the customer set is typically smaller and narrower – allowing companies to be more targeted in their outreach. As an example, if you are selling SAAS services to trucking companies in the US and Canada, then almost everyone you want to talk to shows up at the American Trucking Associations’ annual trade show. This target customer group may also read the same media, and follow the same news – giving you another focused and easy method to communicate with them.
With consumer products, each individual customer is less valuable to you than in the B2B space, and you can’t spend as much on a per customer basis to generate leads and find new buyers. This steers you toward more mass-market methods – internet ads, buying Google keywords, social media, etc.
Varun: The buyer personas can vary tremendously with professionals in one hand and wider consumer personas on the other. For CI products, as PMs generally target broader segments, the medium of outreach can be both digital marketing and traditional ATL advertising (print, TV, radio ads). As the audience is not focused, the marketing job gets tough for PMs.
For B2B SAAS, the outreach can be a mix of digital marketing, outbound sales and BTL advertising (events, promotions, meet-ups). The marketing is highly focused on targeted personas from specified industries and business functions.
Assumptions – Consumer Internet products considered in this discussion are the ones with greater market size and customer base like Amazon, e-Bay, Yelp. Though there can be focused CI products with smaller target segment (say few 100s or thousands in number)
Todd is a principal consultant at Kevolve Product Management, and works with product management teams to gain a deeper understanding of customer needs, develop long-term product strategies, and systematically find growth and profitability.