B2B vs. B2C Product Strategy: Similarities and Differences

Similarity #1: Even B2C Companies have to consider B2B-like behaviors–and vice versa.

Even if you're a "regular" B2C product company, some parts of your strategy have to consider B2B audiences and their needs. This is true every time the delivery of your B2C product experience involves B2B enablers.

A great example for this is heycar, which sells second-hand cars to consumers. When I talked to Hannah Zambrano, a Senior Product Manager at heycar about this, she gave the example of having to involve local car dealers to create the supply for B2C purchases.

While the vast majority of heycar's product experience is aimed at B2C audiences, they have to plan on serving their B2B audiences as well: for example, actually offering a car from a dealership or paying for direct purchases from dealers. Hannah also experienced a similar challenge in her previous role at Blinkist, a company that packages summaries of books. There the product was about a B2C-oriented delivery of curated knowledge for B2C end users. But the company also paid attention to relationships with publishers as the original owners and creators of the content they were summarizing.

B2B products sometimes have to deal with a similar issue, just in the opposite direction. In B2B companies there are customers, users, and there is the champion who is a regular user but also an internal ambassador with higher influence. The challenge is how to approach this potentially diverse range of segments in your audience.

Lucas Bremer, CPO at Quantilope, a research insights automation platform, explains that “having champions as users definitely adds a new variable to the equation. In our case, we are building a platform whose future capabilities our end users can't really imagine at the moment. So we are also testing this idea with executives and industry leaders just to see how they see this. In B2B, champions function more like early adopters in B2C-like situations.”

“In B2B, champions function more like early adopters in B2C-like situations.”

This approach influences what jobs might find their way into a B2B Product Strategy. You need to consider value propositions and offerings for the tactical challenges of users, who might behave a bit more B2C-ish, as well as the more high-level expectations of customers and champions. That really brings more traditional B2B expectations and needs into the mix.

Similarity #2: The Product Strategy process emerges from recognizing patterns, not filling in templates.

To avoid getting stuck in a rigid template structure, it’s vital to understand the common denominators of strategic thinking that apply to a lot of different business models, industries, and product lifecycle stages. For Hannah and heycar in the used car market, strategy starts with prioritizing the value proposition of supply, before drawing in demand: when they roll out into a new country they first must understand what businesses they can rely on to acquire the used cars before they can approach the demand side for their consumers. Then they go into the new market with a pilot to help find and define their users.

This illustrates that even B2C products can’t work with one-dimensional strategic audiences. As mentioned before, they have to consider the potentially needed B2B-like enablers of B2C experiences.

That the steps to developing a useful Product Strategy is essentially the same across most companies doesn’t necessarily make anything easier. There is still plenty of variation that Product Strategy templates and frameworks can’t accommodate. Stephanie Leue, CPO at Doodle, doesn’t use one particular framework at all. She explains that “none of these frameworks really work properly. It's always a combination of 10,000 different things. You need to summarize and synthesize and understand and challenge and kind of bring together a concept. But from my perspective, there is no one size fits all nor a best practice approach to strategy.”

“None of these frameworks really work properly. It's always a combination of 10,000 different things. You need to summarize and synthesize and understand and challenge and kind of bring together a concept. But from my perspective, there is no one size fits all nor a best practice approach to strategy.”

A useful Product Strategy should leave room for interaction and flexibility. Lucas says that “at Quantilope, we try to structure strategy as a conversation so we can build what we call a storyline: the questions that we need to answer to really get closer to our goals.”

A Product Strategy might begin with a question like ‘where do we want to go? what's our company or product vision?’ Then move on to ‘how can we now contribute to these overarching company-wide goals? Where are we standing right now in the market? Where do we see opportunities? What are the competitors doing?’ Finally, ‘how can we now think about reaching and supporting the goals? how can we see maybe at the product level that we are going this direction? What can be indicators for us?’

Lucas’s idea of a "storyline" acknowledges that Product Strategy emerges from recognizing patterns. If you ask the right questions, then you know what to say no to and how to communicate your strategy with a "custom" structure. Making the Product Strategy process “conversational” is a great way to use whatever Product Strategy patterns you need to engage others and build alignment internally. A Canvas or template won’t do that.

Similarity #3: A clear Product Strategy requires collaboration.

You will know that your Product Strategy is useful if you see clear reasoning behind rejected feature ideas. You will also know it “works” if product teams can use it to set and adapt their Product Discovery priorities and when colleagues can talk about strategic priorities without checking their notes. Lucas keeps his Product Strategy written down somewhere in a compact form of two or three sentences or three pillars: “We try to focus on a high-level description so that it's catchy and easy to remember.”

To get the best buy in, a useful Product Strategy has to emerge from the top-down and the bottom up. Lucas calls it the Ikea effect: “if you build the furniture together, you will really love it, even though it's not the most beautiful one. It's important that strategy is not just top down, but we really developed it together. I get all the input and thoughts from the teams to make sure that it's really helpful for them.” In my conversation with Stephanie she also mentioned that this level of collaboration means that Product Strategy can add new challenges. “You need to get buy in from everyone,” she says, “and as soon as you do have buy in, your strategy is kind of outdated again.”

Difference #1: B2B and B2C audience inputs diverge.

Despite all these similarities, there are a few key differences between B2B and B2C companies. One of the biggest is how to work with the inputs of their chosen strategic audiences. 

In B2B, it’s common to have a lot of qualitative interactions with either your users, champions, or customers. At Quantilope, Lucas mentioned how close the interaction is with their audience. They closely collaborate with the heavy users and champions to figure out how to address tactical concerns like generating insights efficiently. In addition, the nuances within their B2B audience might be more subtle: While the needs of agency-type customers are not that different overall from those of corporate and enterprise customers, the ranking of priorities can be completely reversed. In Quantilope’s case, they make the conscious decision to focus on the Insights departments in corporate and enterprise markets as part of their strategy.

In contrast, for B2C companies segmenting users is often the main challenge: there are so many dimensions to consider, and you need the quantitative data to support your decision-making.

How, then, do you use more “distant” user inputs in B2C settings when creating your Product Strategy? Hannah perfectly captures the different situations when dealing with B2B and B2C Inputs. Sometimes, B2B users are internal and thus much closer and easier to hear. “That voice can really scream in your ear,” she says, whereas “the B2C customer can seem very, very far away. The only way they can reach you is maybe send an email or give you a bad review in the App Store, right?”

“Sometimes, B2B users are much closer and easier to hear. That voice can really scream in your ear, whereas the B2C customer can seem very, very far away.”

The B2C end user is very important, but much harder to quantify than the voice of the often-talked-to B2B heavy user or champion. So it becomes very difficult to advocate for that voice when it comes to Product Strategy. If you want to make qualitative data a stable input for your Product Strategy, you need to think about how to capture and measure these intangible metrics.

One tactic that Hannah used at Blinkist was to aggregate those customer voices: she established an NPS-like score that aggregated all the various qualitative data points from users into a metric. That allowed her and her team to measure and account for those quieter voices that are further away—and thereby made focusing on them a viable option for Product Strategy choices.

Difference #2: Strategy choices in B2B and B2C come with different risks.

The different natures of strategic audiences lead to different levels of risk. Changing course in B2C is often simpler than in B2B. When it comes to strategy, you may have a couple of different target segments. You can build a product for them and change a target persona fairly easily (as long as you understand it). B2B is more complex. You have longer sales cycles and different approaches to marketing so deciding to change course in B2B product strategy is way more challenging. You might have to invest upfront in reaching a (new) set of users, champions, and customers, and establish specific distribution mechanisms to deliver a solution to them– before seeing it adopted in their organizations or learning more about the struggles they face in their daily work.

“The path to recognizing when you have to change course in B2B product strategy is way more challenging.”

In B2B, if you take a risk, you are committed for a longer period, and a longer time frame raises the stakes for your company. “In B2C a user is a user,” Stephanie says, “and if their needs change, you probably don't have to shift your entire organization into a different setup. While in B2B, if you make certain decisions it also means that you have to reorganize your team, so the impact of your decision is bigger and riskier, and the evaluation takes longer. So until it pays off, it might take more time.” That means that experimentation is probably a little easier in B2C, because testing and piloting is faster. 

How much risk your company should take on in your Product Strategy is hard to gauge. If your company is running smoothly and meeting growth expectations, then you might take on more risk. If your company is struggling to fit in your market, then you might want to delay taking additional risks. “Finding that balance is challenging,” Stephanie says. “I think you need to clearly articulate what's the risk of that bet, what's the evidence behind it, and how big are the risky bets over the next 12 to 18 months. That discussion needs to happen: how much risk do we really want to take and how much risk do we want to avoid as an organization looking at our current setup and at our current business growth?”

“You need to clearly articulate what's the risk of that bet, what's the evidence behind it, and how big are the risky bets over the next 12 to 18 months.”

Difference #3: B2C products can expand to B2B from their proven strategy core.

There’s a lot of talk about the “consumerization” of business. While that mostly applies to the design of user interfaces and acquisition channels, it can also be applied to unlocking new business models by bringing proven B2C products into a B2B market.

A great example of this is Doodle, an online meeting scheduling tool. When I talked to Stephanie, she quickly pointed out how difficult it was to categorize Doodle strictly on a traditional B2B vs. B2C scale. Doodle might still be widely perceived as a B2C solution due to the origins of its brand. But five years ago, they made the decision to become a subscription-based service and therefore also address B2B users. This leads to a blend of business models: "We're doing both B2C, which is more monetized for advertising, and B2B, which is monetized through subscriptions,” she explains.

Another example can be observed at Hannah’s previous company, Blinkist. While traditionally a B2C product, they have expanded their offering into a Blinkist Business product that allows companies to offer structured upskilling to teams.

Both Doodle and Blinkist expanded from B2C to B2B by offering their established and proven offerings to a new market with similar needs. They only had to repackage the offerings and add B2B-specific strategy elements like high touch sales or onboarding for Enterprise clients, as well as single sign-on and administrative functionalities.

The reason this direction of expansion works is that nearly every consumer is part of a business where they bring their “B2C-ized” behaviors with them that influence selection and usage. But the opposite is not true. Needs relevant in a professional business context don’t necessarily translate into private consumer life and choices.

A prominent example of this is Slack, which started as a product for business teams, but saw their solution getting adopted by communities as well. However, instead of leaning into this new opportunity to monetize from a community-specific offering, Slack stuck to its B2B focus and even deliberately encouraged Discord to break into the B2C space. When asked, Slack CEO Stewart Butterfield said that he regularly said “no” to people who suggested moving into the B2C market for community software because “we can only do so many things well.”

For B2C companies, expanding proven offerings and value propositions into a B2B market might be a viable strategic choice to (continue to) grow, but for B2B companies, expanding into B2C markets can be a deadly distraction.

The main difference between Product Strategy for B2B or B2C is in the tactical execution, not the fundamental patterns.

As Stephanie concludes, “strategy is freaking hard! No matter how experienced you are, and no matter how many companies you have seen, you always start from scratch. You might have your preferred frameworks. You might have your structure on how to approach strategy. But in the end, it always depends on so many different factors: the environment of the organization, the state of the organization, the success of the organization, the growth, the organization itself, the mindset, the people. There is no one size fits all approach, nor is it done in a week.”