SaaS Strategy Series: #2 Are you B2B or B2C?

Know your company's core strengths and what is it good at! For some SaaS companies that might be knowing if you are B2B or B2C. In the billing and subscription space, B2B versus B2C is actually way less relevant. It's really about what sales model your customer's need; Product-Led Growth, Sales-Led Growth or both.

Identify the dimension(s) that are most relevant to your business.

The question “What is your company best known for today?” is really important to answer as it determines how you sell, who you sell to, and aligns your company on what product capabilities to build. It is also critical for buyers evaluating your solution to understand who your solution is best at and who it is primarily used for.

Depending on the SaaS software and services you sell, whether you sell B2B or B2C may be more or less meaningful.

While at a vendor in the sales tax automation space, B2B is truly meaningful to their business as B2B sales transactions are sales-tax exempt and require exempt certificate management. In other SaaS spaces, B2B versus B2C may be way less meaningful.

In fact, in the revenue management and subscription billing space, B2B - B2C is often conflated by both SaaS companies and buyers as being way more meaningful that it is. B2C or direct-to-consumer associated with product-led growth capabilities (tiered plans with self-service attach), and B2B is the billing space is often related to sales-negotiated invoice-based billing.

The reality is: B2B vs. B2C may be the wrong question to ask, but rather what product capabilities does a customer need to support their various sales models?

PLG (Product-Led Growth) is not solely aligned with B2C businesses as B2B businesses use PLG sales models too. The PLG capabilities used selling to businesses are also not that different from the PLG capabilities used for direct-to-consumer. Also B2B businesses are not only aligned with SLG models; they can use PLG, SLG or both. Good examples are:

The B2B versus B2C dimension is much less significant from a “capabilities required” perspective than the sales model required; PLG, SLG or hybrid.

Why is this so important for SaaS commpanies in the billing space? It is really the PLG, SLG, and Hybrid models that dictates what buyers need, what buyers are looking for, and what product capabilities a SaaS billing vendor needs to provide.

One subscription company Maxio understood this was the right dimension to focus on as they merged Chargify - a product-led billing solution provider with SaaSOptics - a sales-led billing solution provider. In this piece, they explain the importance of providing both capabilities for their customers.

How Product-Led Growth is Changing B2B SaaS

?Here is a framework that can help SaaS billing and payment companies evaluate our product capabilities, help customers and sales determine where there is a good product fit, and identify your product gaps.

PLG for B2C attach, PLG for businesses., SLG for businesses, and supporting companies needing hybrid models all entails a different set of solution capabilities billing and payment companies need to be offering their customers. Note: SLG is further divided into two different sub-segments; high dollar - low volume (HDLV) and low dollar - high volume (LDHV). The product capabilities and pricing?model for each can vary.

One more dimension it is important your company keep clear. Separate the solution capabilities you are offering customers (what you are building and selling) from your own sales model. Confusing the two can create communication and planning disconnects across your company.

Here are two examples to clarify the difference:

• Stripe or other SaaS CPQ company can sell their invoice-based SLG solution is a self-service attached, product-led growth way.
• Zuora or Recurly selling direct-to-consumer product-led capabilities into a larger publishing company could do so using a negotiated sales-assisted or sales-led process.

The choice of using product-led self-service onboarding or sales-assisted / sales-led motions is more aligned to the size of company, size of deal and market segment than it is whether the customer has PLG or SLG solution needs.

Here is a framework to help distinguish your company's own go-to-marker sales model (and the solution capabilities you may need to build around self-attach for downmarket) from the solution capabilities you are building and offering customers as part of your platform. It can get confusing!

Questions SaaS leaders and strategists may want to ask themselves:

1. Are your capabilities more B2B or B2C?
2. Is B2B versus B2C really the right dimension as the driver for the product capabilities you build and offer?
3. Are the capabilities you offer more focused on product-led growth models for customers, or more on facilitating sales-led growth models for them?
4. Separate from your own solution capabilities, what is your own sales GTM model?
5. Can you effectively sell both product-led self-attach and sales-assisted negotiated models at the same time? How do the capabilities for each different? See SaaS Strategy Series: Market Segment Focus

Please feel free to add your own tips and tricks for how your SaaS company thinking about the capabilities it offers customers from its own GTM sales model.

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