Understanding the B2B vs. B2C and Product Development Formats

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Understanding the B2B vs. B2C and Product Development Formats – Transcript

 

Bob Moesta

The difficult part of the story for me or at least when I was growing up doing this work, I was always taught to focus on one or the other. What would happen is I’d never have enough money to satisfy the other, part of this is to realize when you’re in the b2b space, you need to satisfy both. Most conflicts happen between the customer and the consumer, the parent wants this, the kid wants that, suddenly there’s a conflict between the two. If you give what the parent wants, and you give what the kid wants, you realize it’s not going to work.

 

Bob Moesta

Welcome to the circuit breaker podcast where we challenge the status quo of innovation and new product development. We’ll talk about tools and skills and methodologies used to build better products and make you a better consumer. I’m Bob Moesta, the co-founder of the rewired group, I’m one of your co-hosts and we’re joined by Greg Engel, who is my co-founder and chief Bob interpreter. Join us as we trip the circuit, and give you time to reset, reorganize and recharge your brain to build better products.

Welcome to the circuit breaker podcast, I want to give a quick summary before Greg and I jump into things.

 

Today’s podcast is about what we would call the alphabet soup of B2B to B2C, all this other stuff, It’s how does it really work, we dive into the difference between a customer and a consumer, a buyer and a user, understanding how to distinguish between the two and realizing that the jobs would be done with a frame wrapped around it, the principles and the mechanisms are the same in terms of what causes people to do it. It turns out that the buyer may have a completely different way of looking at it than the user. We identify how to think about the tradeoffs between them, and then bring that into your product. Enjoy. 

 

Greg Engle 

Hey Bob, today we’re going to talk about something that we’ve come up a few times in the last couple of weeks, that is developing products from a B2B, B2B to C and B2C format. Everybody thinks they’re special, thinks they’re unique, thinks if I’m developing for a B2B, it’s different than if I’m developing for B2C. Or if I have another B in the middle, it’s different than everybody B2B to B2C. And we think that is BS a little bit, because at the end of the day, everybody’s selling to somebody that is going to try to buy and consume a product.

 

Bob Moesta

There are some more complicated than others, but the mechanisms are very similar.

 

Greg Engle

Let’s start with, if everybody thinks of their product as they have to sell to somebody that’s going to be a customer and an end user. Sometimes they’re the same people, sometimes they’re different, that can happen in a direct consumer, it can also happen on a B2C market as well. An example from a B2C. market is if you’re making snack food, or toys, you often have a parent buying them, and then a child consuming or playing with them.  

 

Bob Moesta

Right, that’s a B to C to C, which business would say is customer to consumer.

 

Greg Engle

The reason we want to do this podcast is because we want to dispel the myth that they’re completely different. Everybody wants to make progress, so it’s the first place everybody uses to align themselves, progress is the important thing here.

 

Bob Moesta

The important aspect of that is everybody wants to progress. But the progress that the customer might want to make is different than what the consumer wants to make.

 

Greg Engle 

I’m gonna make you define those words, what is a customer? 

 

Bob Moesta

A customer is the person buying the product and a consumer is the person using the product. In the B2C world, the consumer and customer are usually the same person. 

 

Greg Engle  

Well, it’s more common for them to be the same person. 

 

Bob Moesta

That’s right. It does not always but it’s more common.

 

Greg Engle  

That’s the first thing everybody needs to do; who is their customer and who is their consumer? 

 

Bob Moesta

I would say consumer and user are the same, some people would say consumer, and some say user.

 

Greg Engle

What we often tell people, and coach them on is, yes you’re B2B or B2C or whatever, but who is your customer? Who’s the person that’s going to make the decision and pull the cash out? We don’t mean the person that has the cash, we mean the person that’s making the decision to pull the cash out and buy it. That’s slightly different than just the person that writes the check.

 

Bob Moesta

I say the person who’s taking the political risk to make this change.

 

Greg Engle 

The first thing is to identify that person then you have to identify; is that person going to be consuming? Or are they going to have another consumer? Forget the B2B, B2C. 

First, who’s your customer? Who’s your consumer? Second, with this research, you then need to make the decision; What’s this thing? Who am I going after? The customer or the consumer? So how do you help people through that, just understanding which one they should go after?

 

Bob Moesta

The difficult part of the story for me or at least when I was growing up doing this work, I was always taught to focus on one or the other. What would happen is I’d never have enough money to satisfy the other, part of this is to realize when you’re in the B2B space, you need to satisfy both. Most conflicts happen between the customer and the consumer, the parent wants this, the kid wants that, suddenly there’s a conflict between the two. If you give what the parent wants, and you give what the kid wants, you realize it’s not going to work.

 

Part of it is the tradeoffs you need to make between the consumer and the customer. That’s the real essence to be asked is, where’s the struggling moment? The struggling moment for the user is different than the struggling use for the customer. In the B2B situation, I always start with the customer, the person who has the business problem, who’s trying to solve that because they’re the ones who have the money, if I can’t even get in the door, it’s very hard to convince the users to make progress because the users usually don’t have the power to implement those things. So, it’s understanding the customer first, and then understanding the consumer is how I go about it, it can vary but that’s how I approach it, you do it different.

 

Greg Engle

That’s the first step, is that’s the first default. Then you need to look at your business. For example, I might change the sequence if you’re selling a lot, there’s no consumption, then obviously studying your consumer becomes more important than your customer, because your customers already buying. Then you know more, it’s about what business problem are you having? Identify that business problem, and then identify who must make the progress so you can sell more? 

 

That’s the conversation we have with people all the time is helping them understand who their targets are. What is their complicated system? Often, we say, ‘Oh, we’re B2B or B2C’, we don’t think about, ‘oh no, we’re actually ‘B to B to C’, because there’s a consumer that needs to be satisfied. There are some products that as a business owner, I can dictate you use, and there are some products as an employer I can give you, but you must consume it, training being one of them. I can give training to people, but they must want to consume it to do anything with it. So, it has to be compelling for the consumer, as well as just the customer.

 

Bob Moesta

That’s right. This is where you have that dilemma of, I can sell it, but they don’t use it or boy they really want it but nobody’s willing to buy it. So, you wrestle with both sides of this thing, to understand where to start and what’s going on, but ultimately, it only works when they both alive.

 

Greg Engle

When you can show somebody that benefit at every stage they need, whether you’re a B2C or B2B. Maybe they’re the same person that buys the same version, there’s still two buys here. There’s the first pie of the money, and the second pie of consumption. Always remember that I think that’s the key that we’ve tried to get to people all the time is there’s two separate times I’m pulling something to make this decision. One is the money, and one is whatever I’m giving up by taking your product, time, effort, whatever that might be. So there’s the big higher, and a little higher.

 

Bob Moesta

The big higher is when do I buy the bottle of Windex? and the little higher when do I spray the Windex? I need both for people to consume my product.

 

Greg Engle

Yeah, we often spend a lot of time trying to talk about is getting out of the jargon of B2B B2C B2B

to BBB, whatever it might be. To who is your customer and who is your consumer? Then where are you having the business problem? But also knowing that you can’t ignore one, just because you’re selling today, doesn’t mean you should never do research on them. How should you structure that? How should you sequence it? Those are the questions that we have to guide people through all the time.

 

Bob Moesta

In some cases, is rectifying expectations for both sides. For example, if you look at Salesforse is usually bought by VP of Sales, VP marketing, somebody high who’s like, we need to make the process visible, we need to collect all the data, we need to put it all in one place. But if you look at the consumer of it, it’s got to be a place where I can put my sales calls, someplace I can put this information and if it’s not enough, if it’s too hard to do all that information, I’m duplicating it, I don’t help sales go up at all.

 

Greg Engle 

Well, that’s where the two jobs you’ve done are in conflict. Because a lot of times VPs of sales, or sales managers will buy it for the reporting, the salespeople are trying to buy it to help them sell, and the information is different. As their producer of a Salesforce or a CRM, we have to know that and then know where the tradeoffs are on both sides. Because I can’t make it all one way or all the other way, I have to find the middle between both being satisfied.

 

Bob Moesta

And that’s about setting expectations between the two contingents of the consumer and the user, or the customer.

 

Greg Engle 

And is satisfaction, being elated with the product, or the product being good enough?

 

Bob Moesta

The way I think about satisfaction is about them making progress. There are many products where people are elated and they’re satisfied, but in more cases there’s people who are not elated, but they’re happy enough that it’s helped them make the progress they want. I always think of a good half step is better than a crappy whole step. I always use the example of QuickBooks, but nobody really loves QuickBooks, yet it helps them make progress.

 

Greg Engle 

We normally see it this way whenever there is a consumer, customer difference, where they’re not the same person. Getting complete elation out of either one is almost impossible, they both have to make tradeoffs, it has to be good enough for both of them. For example, back to our food with kids snacking, I might not let them eat a bag of Chips Ahoy, but SunChips might be good enough. It gets the nutrition I want them to get it tastes good enough for them. But it’s not a bag of Chips Ahoy.

 

Bob Moesta

Yeah, I’ll usually use the, if I designed the toys that parents want, kids usually wouldn’t play with it. And if I designed the toys that kids wanted, parents would never buy it.

 

Greg Engle  

Right, so we need to find out where that threshold is from both sides. 

 

Bob Moesta

It’s about finding the overlap that’s the most important aspect. Understanding one set of jobs of the buyer or the customer the customer, where’s the right overlap between it because they’re willing to make tradeoffs to make it work for both. It’s more a negotiation between the two of them than it is a negotiation between you and them.

 

Greg Engle

Yes, you need to get out of the way, allow both of the parties, the consumer, and the customer to make the tradeoffs for themselves and find the right thing.

 

Bob Moesta

And some of the best companies help people negotiate that between the two. That’s why they’re more successful because they can help satisfy both a little better than satisfying one or satisfying the other 100%.

 

Greg Engle

Well, that’s the advantage of being a software company in these situations, because you get onboard, and you can get onboard differently as the customer, then you do the consumer, with different onboarding things that will fit both parties. If you’re in a food company, you’re so far away from that consumption moment, that you have no control over what has started there.

 

Bob Moesta

The only thing you really know is when people buy it off the shelf, you have no idea how long it sits there, you don’t know when it gets eaten all those other things. So there’s other problems with that.

 

Greg Engle 

When someone comes to you, and says we’re unique, we’re a B2B, or we’re a B2B2C. How do you start that conversation? Because I know a lot of people are probably listening to this going, I have that problem with my manager, my VP of sales or whoever it might be. How do you help people start that conversation of it’s less about the Marketplace and more about serving the customer and consumer.

 

Bob Moesta

It routes back to who’s struggling? Why are they willing to change? What are they changing from? What are they hoping for when they come to you? Ultimately being able to understand the contradictions, or the tradeoffs between the buyer and the user? When you start the conversation, it’s about what are you struggling with? They’ll either say I’m struggling in sales or I’m struggling in and usage. That directs you towards Oh, well for users we have to figure out where the struggling moments are for the consumer, or the user, as opposed to like trying to figure out a sale. It’s separating those things of where do they feel they’re struggling, that mirrors the struggling that’s in the market.

 

Greg Engle 

We’re ranting a little bit, from questions and our struggle of everybody thinking they’re unique. When we really want people to realize that we should not be focusing on what we call ourselves, we should be focusing on what customers want to do with our products and the progress. We’re bringing this up because we hear a lot of it and we’re trying to get people to realize that get out of your own way and think about the customer and consumer and identifying them. 

 

If they’re the same person, it’s a little easier, if it’s different people, it’s harder, and if it’s multiple different people, it’s even harder, but knowing the jobs, and then designing your products and services around the job help you alleviate that. A company can have different jobs done in different level, and if you can service both of those, they’ll still buy you, that’s the important thing is thinking about your business from a customer consumer aspect, then matching what people want to your products and services and then knowing how to identify them. That’s the hard part.

 

Bob Moesta

This gets back to kind of the point of, there are people in the sales process or the buying process that can stop the sale. But there are very few people who make the sale happen so when we talk about who is the buyer, who is the customer, it’s the person who’s got the energy to make the progress. A lot of cases, there’s people behind the scenes who can stop the sales process, but for the most part, they’re only anxiety forces, they’re not necessarily promoting forces. You might have to figure out ways to get to satisfy the objections but just satisfying the objective isn’t going to get you bought.

 

Greg Engle  

This podcast also a little bit about getting out of supply side thinking, because consumer and customer doesn’t care for B2B B2C.

 

Bob Moesta

They want to know; how can you help me make the progress I’m trying to make? In a lot of cases, it’s helped me articulate what I’m truly struggling with. And why I want this because a lot of times people go I just want to buy you, and then and most are like, sure, then you go to sell and the thing is when you sell it, it doesn’t work, because they’re not clear on the problem they’re trying to solve or the energy they have to put in to make it happen. The more you can help them understand the progress they’re trying to make and the fit that you bring to the table, the more satisfaction there is going to be there.

 

Greg Engle  

So that brings us to our homework. And this is a little difficult for homework. But I think what we want to do is just have people stop and think about who is their customer? Who is their consumer? Are they the same or different? If they’re the same, great, how do you talk to them differently? Because you still have to talk a little differently because one is about the big hire, and one is about the little hire. A lot of times people will buy things in a big hire situation and never use it for that situation but buy for a little higher. You have to know all of that even if it’s the same person. Can you identify who your customers and consumers are? Can you write a little bit about what each one’s trying to get done? If you can do that, then you’re on the way to doing right. If you try to do any research, be it segmentation, jobs to be done, whatever it might be, can you identify which one you’re going after? And why? Why are the reasons you’re focusing on them?

 

Bob Moesta

How do you make sure you separate the answers that one group gives to another group because they’re not mixable, because they’re from two completely different reference points.

 

Greg Engle 

To recap, I think all we’re asking you to do is can you identify your customers and consumers and what’s different between them? So as always, thanks for listening.