All you Need to Know About Building a B2B Product (Example Case Study Included)

Most of the existing content on Product Management is focused on the B2C (business to consumer) model, targeting products for the end consumers. B2B i.e. Business to Business product management often requires significantly different approaches when it comes to product discovery and development. B2B Product managers possess more industry expertise, and understanding of enterprise users and the ecosystem they serve.

In a B2B context, the enterprise users can be CXOs, Team leaders, Project Managers, and other employees in different functions like finance, operations, and procurement. Project sponsors and executive team members have very different needs as compared to the end-users. They all strive to actively collaborate together to make the business successful. The business person responsible for buying the product is not typically the actual user of the product.

The product managers in B2B companies like Microsoft, Adobe, Shopify, Atlassian, Zendesk, Zoom, and Salesforce that serve their enterprise customers, closely work with the sales teams to build new features. They follow industry news, and trends and regularly engage in site visits to understand the ever-evolving needs of the business users. Distribution approaches for enterprise products can be on-premise, cloud-based, or hybrid with either proprietary or open-source licensing. As a PM, it is not just important to build empathy for different enterprise users but also to study their business processes and functional relationships.

Some of the common realities of B2B product management are:-

• Customers and users are business-driven
• Relatively fewer customers but pay higher price points
• Big clients are critical for product success
• Customers have explicit demands and expectations
• Users require specialized sales and customer support (often paid)
• The buying process is complex & takes more time (no impulsive buying)
• Development has slower release cycles and higher testing standards
• User data is limited and feedback loops are longer
• PMs need high industry expertise
• Products are often customized for businesses with support for multiple 3rd party integrations

Some of the common myths of B2B product management are:-

• Clunky User Experience is ok for business users
• Features are mostly prioritized on sales inputs/pressure
• Innovation is low
• Customers only care about business revenue, savings, and efficiency

Let’s understand how to build features for an enterprise/B2B product through the example below:-

Case Study

Problem

You are a product manager for an accounting software product. The product caters to small to medium-scale businesses in the United States with a sizable number of employees and a high number of business transactions month on month. These business owners are looking for product solutions that make team collaboration and delegation easier with sufficient controls in place. They need solutions that can replicate the business processes like the manual approval process for Purchase Orders and Invoices.

Situation

Business Customers need a unified purchase order and bill approval workflow to increase business speed and efficiency while strengthening checks on cash flow and frauds.

Assumption:- The current product lacks an approval workflow for purchase orders and bills which makes it harder for the employees to collaborate. It also makes business owners vulnerable to fraud and cash flow issues. Maintaining physical proofs (paper trails) is time-consuming and inconvenient.

Opportunity Analysis

To assess the needs, we need to do opportunity sizing across geographies by taking into account -

• Customer feedback (survey/interviews)
• Sales feedback
• Competitor solutions
• Alternatives available in the market (3rd party add-ons)
• Market research

As per customer feedback, the approval workflow is manually managed by some customers (assumed). It is tedious and causes poor efficiency and collaboration. Some customers are already using 3rd party tools along with accounting products. Approvals and payments can also be automated. This reportedly can lead to a saving of more than 60% in accounts payable processing costs. It is estimated that processing a paper invoice can cost anywhere between $8 and $60 due to labor costs and costly data errors (source: Invoice management for modern businesses by Patrick Whatman).

As per current market dynamics, small and mid-sized businesses are working to rebound from the impacts of the COVID-19 pandemic. For two-thirds of small businesses, finding new customers is their biggest obstacle, and over one-fourth struggle to manage them*(source: Businesswire).*

Mission

The company’s mission (hypothetical) is to drive global prosperity by assisting businesses in managing their financial problems.

Users

**Primary Users / Customers \ Small to Mid-market business owners - who own companies with

• The high monthly volume of business transactions or cash-flow
• A sizable number of employees (>50)
  

They are concerned about
a) Expenditure and cash flow b) Fraud/loss c) Slow overall workflow

E.g. Manufacturing companies, real estate

Secondary Users

• Finance Dept. employees
• Procurement Dept. employees
• Project Managers
• Dept. heads

Characteristics of other users
a) Concerned about accountability b) Do a lot of manual work

Pro Tip:

External Accountants, Auditors, Suppliers, Legal team, Sales team, Customer Support, Vendors, IT team & Leaders can also be users of the enterprise products as they need visibility to business processes like the billing and purchase process

For more details on “users and customers”, read - How to identify users?

User Needs & Pain Points

Needs and Pain Points of Business Owners

Small business owners want better control over their business by streamlining finances, increasing productivity & reducing enterprise costs. Moreover, they need -

• Faster decision making and execution to increase speed of business
• Visibility/alerts on cash flow, credit cost, and expenditure
• Better collaboration and delegation between employees
• Simplified business processes like avoiding unnecessary approvals
• Checks on misappropriation of funds

Needs and Pain Points of other users

Company employees and their vendors want to manage the accounts payable and billing process smoothly while simultaneously increasing the speed and accuracy of document processing. They also have the below needs and pain points -

• Need for better collaboration - easy tracking and approvals to save processing time
• Manage high workload due to paperwork
• Difficult to audit - lack of proper documentation
• Manage accountability by proper authorization of finances
• Accuracy in data and reporting - prevent and reconcile errors

Solution

Considering the internal capabilities and technologies required to enable the required functionality, multiple solutions can be evaluated. For eg -

• 3rd party partner integrations (like add-ons, APIs)
• Acquisition of existing products in the market
• In-house product feature

The solutions are to be assessed for prioritization on the basis of -
a) Customer Value,

b) Business Value,

c) Development/integration costs,

d) Time to market, and

e) Risks.

Solution presentation

Success Metrics

Various metrics on business value, client success, product usage, engineering, and customer service need to be monitored for measuring the overall performance of the feature.

Some of the key metrics to be measured at the time of launch are:-

• Total number of Bills and PO Approvals processed
• Number of Paid users
• NPS

Also Published here