Understanding B2B versus B2C in product development

There’s a distinction between a customer and a consumer and how you distinguish between the two. When you’re in the business to business (B2B) space, you need to satisfy both the consumer and the customer.

We’ll often hear people talk about their business operating within the B2B (business to business) space or the B2C (business to consumer) space. Then there are those who throw B2B2C in the mix, not to mention B2C2C. These acronyms are used to develop business models, prioritize features, and assign focus to campaigns.

In an episode of our podcast, The Circuit Breaker, we discussed whether these audiences should be treated or prioritized differently in product development.

Here Bob Moesta and Greg Engle discuss the point that when you’re in the business to business (B2B) space, you need to satisfy both the consumer and the customer. There’s no place for focusing on just one; the business won’t work.

There’s a distinction between a customer and a consumer and how you distinguish between the two.  When you’re in the business to business (B2B) space, you need to satisfy both the consumer and the customer. 

You need to identify who needs to make progress for you to sell more, you need to understand the importance of aligning both the consumer and customer. You also need to understand how, by making tradeoffs, ensures customer and consumer satisfaction.

Unpacking the B2B, B2C and B2B2C alphabet soup. 

Everyone thinks they’re special. They think if they are developing for a b2b product, it’s completely different for b2C, or b2b2c. We want to dispel the myth that they are all different, but that’s not the case, because everyone wants to make progress 

We’re all trying to sell something to somebody; everyone’s buying. But, in fact, the mechanisms are very similar. 

Let’s say you’re selling a type of toy for children, it’s likely you have a parent buying it. In this case, it’s B2C2C. 

If I were to design a toy parents want, kids won’t play with it; and if I were to design the toys kids want to play with, the parents would never buy it. 

So, you can see that the progress a customer wants to make is different to the progress the consumer wants to make. 

Who is your customer and who is your consumer? 

What’s a customer? The person buying the product who is making the decision to pull out the cash. They’re also the one taking the political risk to make the change.

What’s a consumer/user? Quite simply, it’s the person using the product. 

When applying this to your business, the first thing you need to ask yourself is who am I going after: the customer or the user?

How do you know which one you should go after?

I was always told to focus on one or the other. However, if you do that, you have no money to make either work. If you work in B2B, you actually need to satisfy both. 

The conflict happens between the customer and the consumer. The boss wants this, the employee wants that. It is your job to understand the trade-offs each has to make between them. You need to understand where the struggling moment is for each, because they are different.  

In B2B, we tend to recommend starting with the customer first because the business problem is rooted in this area, and they are the ones with the cash. Users don’t have the power to implement. 

What business problem are you actually having? Who needs to make the progress to sell more?

Understand who your targets are.

We often talk to companies that say “we are b2b or b2c” but, when actually they are b2b2c because there’s a consumer in the mix that has to be satisfied. 

There are some products that as a business owner I can dictate you use, and there are some as an employer I can give you, but you have to consume it. Training being a good example. I can give training to people but they have to consume it in order to do anything with it.

It only works when they both align.

There are two “buys”: the money and the consumption. We refer to this as the big hire (the money part) and the little hire (the usage).

Look at Salesforce, for example. It’s bought by someone senior, like a VP of sales. They need it because they need their sales data to be visible, to ensure it is all in one place. 

Then look at the consumer side. If using Salesforce is too hard for them, it’s likely to not be used as effectively. This is when the jobs to be done is in conflict. 

So, to create better products we need to work out what the trade offs are for each audience. 

Whenever there is a customer-consumer difference, you need to work out finding the overlap and the right level of overlap. At the end of the day, it’s a negotiation between them, not you. 

Here’s an exercise for you to try in your business.

  • Who is your customer and who is your consumer? What’s different between them?
  • And, if they are the same, how do you talk about them differently?
  • Write a little about what each is trying to get done, what progress they are trying to make?
  • Look at your research method – you may use segmentation or jobs to be done, for example.  From this, look at which you are going after and ask yourself why?

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