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  • Writer's pictureMatheus Reis

A Business Vision for Product Strategies in the Enterprise Market

Updated: Mar 27, 2023

How to improve product value delivery by understanding business.




To understand more about product development strategies in this sector, it is first worth saying that in the B2B market there are differences. We can divide it into 3 major groups. Small and Medium Business (SMB), Small and Medium Enterprises (SME), and Large Enterprises, commonly known only as Enterprise.


I particularly don’t like to describe large enterprises as slow or bureaucratic as we hear about. I prefer to refer to them as a politically and operationally complex universe. It better portrays the reality of what an environment with more than a thousand employees, with well-segmented and independent departments, and with revenue of over a billion dollars a year, is like.


With my experience being Head of Product of a SaaS Startup for this niche, I understand that product executives need to recognize this complexity in their Product Strategy. Specific characteristics of this market will directly influence how to position and deliver your solution, which differs from the traditional B2C model we see in many sources about this topic.


 

That said, a first understanding that I see no escape from is that;

It is just not a good idea to automate your entire customer relationship.

From a product perspective, automating all your touchpoints is giving up the best way to ensure impact, maintain engagement, and realize expansions. Your sponsor, who bought the solution, sees the purchase as an investment and his concern is to optimize it. Your user has as a priority to deliver the job-to-be-done of their position. So you need to manage multiple expectations and bridge that gap between these two stakeholders. Make operational touchpoints, like Onboarding and strategic touchpoints, like Business Reviews with the sponsor, those opportunities. Stay close to your customers.

 

The more complex is your solution, the greater the need for that proximity.

So, don’t ignore your service lines, they will serve as a complementary tool to your product.

There is a universe of systems, paradigms, and cultures that have been built over the years that do justice to the complexity of these corporations, making them unique. To fit the product into this environment, Enterprises seek a very high level of consulting and customization. By design.

Therefore, your service lines will serve as a mechanism to decrease the need for a product change, while engaging and maintaining the conditions for the value delivery of your solution, over time. As well as the possibility of monetizing or leveraging them to form a network effect. A subject for another time.


 

The person who buys a product in Enterprise is probably not the owner of the money.

Even if it is a director or vice president who owns his own budget, that person will have to be accountable to his board of directors, for example. In short, all business arguments are around financial justifications, about quantitative proofs of value delivery. As a product, we can facilitate this process.


A good way to do this is to think about your features as if they were small business cases that solve a well-defined problem, improve customer perception of your product, and are possible levers for upsell or cross-sell. In other words, they must be linked to financial arguments.

To accomplish that, look for “champions”, influential and powerful people within the organization who are willing to work hand in hand with you. They will be the sponsors of your features, responsible for helping you prove value and quantifying them, during the conception phase. In this way, you can measure the ROI of your product and new features, on each customer, based on their usage profile of your product.


 

The adoption and scale strategy of your product, in a large corporation, depends on how it is positioned, whether it will be a “Bottom-Up” or “Take it All” solution.

There are solutions that are specific, that will serve small groups in the organization as a Java development library. These, are solutions that a manager can buy for his team, sometimes even with a corporate credit card and there will be no use for other departments. Others, like an ERP from SAP or Oracle, are usually complex projects that affect the entire company and have their Business Cases reviewed and approved by the board.

This impacts your Growth and Retention strategies, and will also determine your average ticket. It does not mean that having a low average ticket, you are out of the game. Just like in B2C, you need to form habits. The more adherent the product is to the organization’s routines and processes, the harder it is to replace it.


The replacement cost is a strong lever in your favor in the Enterprise, mainly because the sponsor, who was charmed by the sales team, used his political and financial capital to mobilize internal teams, made a Business Case, and defend his purchase, sooner or later will move position and he is going to leave this project. The change of stakeholders is among the main factors for the discontinuity of initiatives in large companies. This is also why you cannot automate entirely your relationship with them if you remember from the first topic.


While Account Executives are running after engaging new sponsors, your product will be ahead in the field. Because those who sat in your sponsor’s seat are questioning every line of the budget they received. So if your solution has a good Business Case and a high replacement cost, the risk to discontinue it is going to be high. The higher this risk, the higher up in the hierarchy of the company the decision-maker is and the more strategic it is going to be.


 

As you may have realized, a large part of the influence of doing business in this market is through maintaining a good and healthy relationship. For a good product to generate impact in the Enterprise, it will need space to do so. The challenge lies in, after conquering it, how can you maintain it in the long term. For that, you need to develop mechanisms that create opportunities for interaction and collaboration through your platform. And when this occurs, it must be so intrinsic to the company’s routines and culture that it has now become part of it.

The saying “those who are not seen are not remembered” can be raised to the maximum in this context.
 

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