S1 E13 | Understanding the B2B vs. B2C and Product Development Formats

The difficult part of the story for me was, at least when I was growing up doing this work is the fact that I was always taught to focus on one or the other, that when would happen is I'd never have enough money to actually satisfy the other part of this is to realize that when you're actually in the B2B space, you need to actually satisfy both and that most of the conflicts actually happen between the customer and the consumer. The parent wants this, the kid wants that, and all of a sudden there's a conflict between the two. So if you listen and give what the parent wants and you what the kid wants, all of a sudden you realize like, it's not gonna work.

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Welcome to the Circuit Breaker podcast. Just want to give you a quick summary before Greg and I jump into things, but today's podcast is really about what we would call the Alphabet soup of B2B, B2B2B, C, C2B. All this other stuff, right? It's how does it really work? And we dive into kind of what's the difference between a, a customer and a consumer, a buyer and a user, and understanding kind of like how to distinguish between the two and ultimately realizing that the jobs to be done kind of frame wrapped around it. The principles and the mechanisms are the same in terms of what causes people to do it. But it turns out that the buyer might have a completely different way of looking at it than the user. And then we identify basically how to think about the trade offs between them and then bring that into your product. Enjoy.

Hey, Bob.

Hey, what's going on, man?

Today we're going to talk about something that we've come up a few times in the last couple weeks, and that is developing products from a B2B, B2B2C and B2C format. So everybody thinks they're special, everybody thinks they're unique, everybody thinks that if I'm developing for a, 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. B2B2B, C. And we kind of 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.

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

So let's start with that. So let's start with if everybody just kind of 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 and sometimes they're different. And that could happen in a direct consumer. And that can also happen on a B2C market as well. So an example from a B2C market is if you're making food, snack food or toys, you often have a parent buying them and then a child eating them or playing with them.

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

So I think the reason why we want to do this podcast is because we want to just dispel the myth that they're completely different and everybody wants to make progress. So that's the first place everybody needs to align themselves is progress is the important thing here.

And the important aspect of that, though, is that everybody wants to make progress, but the progress that, for example, the customer might want to make is different than what the consumer wants to make or in some cases.

So I'm going to make you define those words. Yeah. So what is a customer?

A customer to me is the person buying the product, and a consumer is the person using the product. What I would say is, in the B2C world, the consumer and customer are usually the same person.

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

That's right. It does. Not always, but it's more common. Correct.

So that's the first step everybody has to do is actually who is their customer and who is their consumer. That's the first thing they need to do.

And I would also say consumer and user are the same. What we mean by the same thing.

Right.

So some people would say user, but it's like consumer and user.

So what we often tell people and we often coach them on is, so the first thing is, yes, you're B2B or you're B2C or whatever, that's fine. 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 just the person that has the cash. We mean the person that's making the decision to pull the cash out and buy it. Because that's slightly different than just the person that writes the check.

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

So the first thing is you have to identify that person. Then you have to identify is that person the person that's going to be consuming or are they going to have another consumer? Right. That's the first step you have to do. So forget the B2B. B2C. First, who's your customer, who's your consumer? Then you have to make the decision with this research, with this thing, who am I going after? The customer or the research or the consumer? Right. So that's the next step you have to make. So how do you help people through that? Just understanding which one they should go after.

So the other. I'll say the difficult part of the story for me was at least when I was growing up doing this work is the fact is like I was always taught to focus on one or the other, but then what happened is I'd never have enough money to actually satisfy the other. And so part of this is to realize that when you're actually in the B2B space, you need to actually satisfy both and that most of the conflicts actually happen between the customer and the consumer. The parent wants this, the kid wants that, and all of a sudden there's a conflict between the two. So if you listen and give what the parent wants and you give what the kid wants, all of a sudden you realize it's not going to work. And so part of it is the trade offs you have to make between the, the consumer and the customer.

To me, that's the real essence is that to be asked is where is the struggling moment? And what I would say is the struggling moment for the user is different than the struggling use for the customer, if you will. In the B2B situation, I usually 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 actually convince the users to make progress because the users usually don't have the power to implement those kinds of things. And so it's understanding the customer first and then understanding the consumer is how I usually go about it.

Yeah. And what we do, and it varies.

But that's how I approach It. You do it different.

Well, that's the first step. Right. That's the first default. But then you also have to look at your business. Are you. For example, I might change the sequence. If you're selling a lot.

Yes. And there's no consumption.

And there's no consumption, then obviously studying your consumer. Consumer is more important than your customer because your customer's already buying.

That's correct.

So I have to know more. So it's about what business problem are you actually having? Identify that business problem and then identify who needs to make the progress for you to. To you. To who has to make the progress so you can sell more or.

Yeah, yes.

Right. So that's the conversation we have with people all the time. Is. Is understanding. Helping them understand who their targets are? What. What is their complicated system? Because a lot of times we just say, oh, we're B2B or we're B2C. And we don't actually think about, oh no, we're actually B2B2C. Because there's a consumer that has to be satisfied. There's some products that as a business owner, I can just dictate you use, and there's some products I need to. As an employer, I can give you. But you have to consume it. Training being one of them. I can give training to people, but they have to want to consume it in order to actually do anything with it. So it has to be compelling for the consumer as well as just the customer.

That's right. And this is where you have that dilemma of like, I can sell it but they don't use it, or, boy, they really want it, but nobody's willing to buy it. And so this is where you've got to wrestle with kind of both sides of this thing to really actually understand kind of what, what. Where to start and what's going on. But. But ultimately it only works when they both align.

When you can show somebody the benefit at every stage they need, and whether you're B2C or B2B, and maybe they're the same person. That person that buys, the same person. There's still two buys here. There's the first buy of the money and the second buy of consumption. Always remember that. I think that's the key that we try 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 hire and the Little higher.

That's the way we talk. That's where we look at the big, the big hire, like the simple stupid way is like the big hire is when do I buy the can or the bottle of Windex? And the little higher is when do I spray the Windex? And I need both of them for people to actually use, consume my product.

Yeah. So I think what we, we often spend a lot of time trying to talk about is getting out of the jargon of B2B, B2C B2B 2BB whatever, it might be right to know who is your customer and who is your consumer and then where are you having the business problem? But then also knowing that you can't ignore one. Just because you're selling today doesn't mean you should never do research on them. So but it's when, how should you, how should you structure that? How should you sequence it? Those are the questions that we have to guide people through all the time.

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

Well, that's where the two jobs you've done are actually in conflict.

That's correct.

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. So sell and the information's different. So as the, as the producer of a Salesforce or a CRM, we have to, we have to know that and then know where the trade offs 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 and that's about setting expectations between the two contingents of the consumer and the user or the customer.

And the satisfaction being elated with the product or the product just being good enough.

So the way I think about satisfaction is it's about them actually making progress. So my thing is 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. This is where again I use always the example of QuickBooks but nobody really loves QuickBooks but yet it helps them make progress.

And we normally see it this way is 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 trade offs. It has to be good enough for both of them. For an example, back to our food with kids snacking is I might not let them eat a bag of Chips Ahoy but Sun Chips 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.

Yeah, I also always usually use the, you know, if I design the toys that parents want, kids usually wouldn't play with it. And if I design the toys that kids wanted, parents would never buy it.

Right. So we have to find out where that, where that threshold is from both sides.

Right. It's about finding the overlap that's the most important aspect. And the. And so understanding one set of jobs of the buyer or the customer and the consumer or the user. Where do you actually put and where's the right overlap between it? Because they're willing to make trade offs to make it work for both of them. And it's more a negotiation between the two of them than it is a negotiation between you and them.

Yes. You need to get out of the way.

That's exactly right.

And allow them both of the parties, the consumer and the customer make the trade offs for themselves and find the right thing.

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

Well that's the advantage of being like a software company in these situations. Right. Is because you get onboarding and you can onboard differently the customer than you do the consumer with different onboardings that will fit both parties. Where if you're in a food company you're so far away from that consumption moment that you actually have no control over what happens there.

And the only thing you really know is like when people buy it off the shelf, you have no idea how long it sits there. You don't know how long it actually gets when it gets eaten, all those other things. And so there's other problems with that.

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

And consumer. And so to me it's, it kind of always roots back to who's struggling. Why are they willing to change, what are they changing from and what are they hoping for when they come to you? And ultimately being able to understand.

Not.

The conflict, the contradictions or the trade offs between the buyer and the user. And so to me, and when you start the conversation, it's really about kind of what are you struggling with?

And they'll either say, I'm struggling in sales or I'm struggling in usage. When you do that, that directs you towards, oh, if it's a usage, then we actually have to figure out where the struggling moments are for the consumer, the user, as opposed to trying to figure out how to sell. It's separating those things of where do they feel they're struggling. And my belief is that mirrors the struggling that's in the market.

So I mean, this is kind of an all over kind of thing. And we're kind of ranting a little bit, I think, from questions and kind of our struggle of everybody thinking they're unique. Right. 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, the progress.

That's right.

So it's kind of a we knee jerk to this. And the reason why we're bringing this up is we hear a lot of it and we're just trying to get people to realize that. Get out of your own way and think about the customer and consumer and identifying them. And if they're the same person, it's a little easier.

It's a little easier, yep.

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. Because a company can have different jobs done in different levels. And if you can service both, all of those, they'll still buy you. And that's the important thing is thinking about your business from a customer, consumer aspect and then matching what people want to your products and services and then knowing how to identify them. That's the hard part.

That's right. Well, and this gets back to kind of the point of, you know, there are people who are in the sales process or in the buying process that can stop the sale, but there are very few people who make the sale happen. When we talk about who is the buyer, who is the customer, it's the person who's actually got the energy to make the progress. In a lot of cases, there's people behind the scenes who can stop the sales process, but for the most part, you need to be able to make sure that you move. They're only anxiety forces, they're not necessarily promoting forces. And so part of it is you might have to figure out ways to get to satisfy the objections, but the reality is just satisfying the objection isn't going to get you bought.

And it's kind of this podcast is also a little bit about getting out of the supply side thinking. Right. Because the consumer and customer doesn't care for B2B. B2C.

They want to know, how can you help me make the progress I'm trying to make? And 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 like, I just want to buy you. And most people are like, sure. And you go to sell. And the thing is, that's when you sell and 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. Part of this is the more you can actually help them understand the progress they're trying to make and the fit that you bring to the table, the more satisfaction is going to be there.

So it brings us to our homework. And this is a little difficult for homework, but I think what we wanted to do is just have people stop and think about who is their customer, who is their consumer, Are they the same or different? And if they're the same, great. How do you talk to them differently? Because you actually still have to talk a little differently. Because one is about the big hire and one is about the little hire. And a lot of times people will buy things in a big, higher situation and never use it for that situation, but buy for the little higher. So you actually have to know all of that, even if it's the same person. But can you identify who your customers and consumers are? And then can you write a little bit about what each one's trying to get done? And if you can do that, then you're on the way to doing right. And then if you try to do any research, be it segmentation, Jazz V. Done, whatever it might be.

Can you identify which one you're going after and why? Why are the reasons why you're focusing on them?

I think the more part is how do you actually make sure you separate like the answers that what one group gives to another group because they're not mixable, because they're actually from different two completely different reference points.

So just to recap, I think all we're asking you to do is can you identify your customers and consumers and.

And how what's different between them and.

Then what's different between them?

Yep. Thanks.

So as always, thanks for listening.

Thanks for listening to the Circuit Breaker podcast. If you haven't already, please subscribe so you won't miss an episode. If you know somebody who's stuck on the innovation treadmill, please share it. If you'd like to learn more information, visit us atthe Rewired rootcamp.com to find out how we work, how we can help. Some resources, some books, some software. Join us next time as we trip the circuit breaker to help you recharge, re energize and refocus your new product development.