How to build a reasonable B-side operation system?

This article is a review and summary of the author's actual work, discussing how to build a reasonable B-side operation system?

The unavoidable operational pitfalls

The author was once responsible for the product and operation of an IAAS cloud service on a certain cloud platform. Fortunately, due to the relationship with the same group, during the promotion of cloud services, he easily acquired the cloud service market of hundreds of B-side companies. Through products and technologies, we built a cloud service platform to take over the business of these hundreds of companies.

In addition, an operation platform has been developed based on business development to support daily work such as contracts, orders, settlements, event promotions, etc. However, in the early days, there was a lack of full-time operations staff to take charge of operations, and everyone took turns to handle daily work part-time, sometimes it was products, sometimes R&D, and sometimes even operations and maintenance. Everyone felt that these were operations matters and it would be unprofessional to do them themselves, so we decided to hire an "operation staff".

So, we recruited several professional operations personnel from Internet companies to take charge of the operations. During the interview, the applicants instilled in us the popular Internet operational concepts and practices, which made us feel ashamed. After carefully listening to the professional experience of these applicants, we started various PRDs, various shows on WeChat Moments, organized various high-end activities, contacted various industry bigwigs, participated in various industry evaluations, etc. Everyone was very busy, as if they were about to become industry bigwigs, and the leaders also praised our work.

After being busy for more than half a year, everyone finally came to their senses. The new operator has not yet taken over the work that everyone originally thought was the operation. When we went to talk to our new operations colleagues about these contracts, orders, and settlements, they looked at us as if we were blaming them and said that these tasks did not belong to operations.

Ah, now it’s my turn to be confused, if these jobs are not operations, then what are they?

Of course, I am not belittling our colleagues in operations. I admire their work ability, personal connections, and media resources very much. They expose us to a wider range of people and things and broaden our horizons a lot. However, there is still no one responsible for the work we originally hoped for full-time.

In addition, a more serious problem is that these new and vigorous operations have not brought any actual impact on our revenue. Our customers are still the same old customers. Various new operations such as PRD communication and industry conferences have cost a lot, but have not brought us new customers or new markets. Orders are still growing slowly at the original rate, and even negative growth has occurred.

From now on, it seems that there is actually a difference between C-end and B-end operations. In the end, there is no choice but to recruit recent graduates to start product training and explore B-end operations. Many pitfalls were encountered in this process, and many have not been completely resolved so far.

Recently, for various reasons, the author returned to his original position to continue working on product and operations, and was forced to continue thinking about how to build a reasonable B-side operation system.

Analysis of different operation types

Before we start talking about B-end operations, let us distinguish between C-end operating companies, B-end operating companies, and B-end sales companies based on the type of business.

With the rapid development of C-end Internet in the country, operations have gradually been recognized and valued by people. There are also theoretical guidance for C-end operations, such as the AARRR model, funnel model, RFM model, pain point path model, etc. Even the operation positions are divided into very detailed categories, such as:

• Content operation positions: community operation, hot spot operation, H5/short video operation, new media operation, etc.
• Event operation positions: platform event operation, business event operation, etc.
• User operation positions: fan operation, KOL operation, traffic operation, customer growth operation, etc.
• Product operation positions: resource allocation operation, data operation, APP operation, etc.

These four classic operations have different focuses:

• Content operation: focus on the quantity of content, content views, content interactions, content dissemination, etc.
• User operation: Pay attention to the user acquisition, activity, and retention. For example, to acquire new users, you need to consider where the users come from, such as WeChat Moments, Tik Tok, Weibo, Douban, advertising, offline promotion, and promotion to existing users.
• Activity operation: various activities and the results achieved. For offline activities, we need to consider the scale of the event, the celebrities participating, the influence of the event and media coverage, etc.; for online platform activities such as e-commerce 18 promotions, we need to consider the number of visits, transaction volume, etc.
• Product operation: the operation of a product. The requirements for product operation are relatively more comprehensive. First of all, the most basic requirement is to ensure that the product can survive. Therefore, operations must focus on product functions, user volume, PV, UV, IP, etc.

The daily work of C-end operations is more like short-term project-based work. Each operation work is a specific task with clear task goals or PKI, clear work time plan, etc. The common operation workflow is as follows:

C-end operations: responsible for creating short-term users + assisting products in improving long-term value

In B-side sales companies, there is no concept of an operating system. It may exist in the form of a marketing department, and its job function is more about building the company's brand and influence. It is also common to see some business activities and non-professional content operations, such as year-end customer appreciation parties, self-operated company public accounts, etc.

So what is the difference in B-side operations, and what kind of operations system and core operations workflow need to be built?

There is very little material on this subject. Everyone discusses it from one or several angles, and there is a lack of a systematic reference. We mentioned above several typical B-side operating companies. We can start with the organizational structure. The author lacks relevant materials at hand, but we can start with their recruitment positions and peek into the composition of their organizational structure.

Typical B-side operating company job analysis

salesforce

AWS

Alibaba Cloud

From the recruitment positions of these three companies, we can see that sales are what all three companies need, and operations are not too prominent. However, since the assets belong to the enterprise itself and customers only lease them for use, work in resource coordination, service provision, enterprise certification, account management, fee settlement, etc. all need to be handled by dedicated operations personnel, such as the AWS Billing Center and Alibaba Cloud's Operations Center.

Salesforce is a company that places great emphasis on sales. It has built a world-class sales team. Sales are involved in the conversion process from free to paid. Sales are also needed in the shift of focus from small customers to large customers, because in the enterprise market, especially for large enterprises, face-to-face negotiations are very important for closing deals. To date, more than half of Salesforce's revenue comes from large companies, and the rest is contributed by small and medium-sized companies, but large companies have a strong willingness to renew.

Information officially disclosed by Amazon shows that AWS's cloud service business has gradually matured, from a pay-as-you-go service for small startups to a multi-year contract model for corporate customers. This business transformation requires AWS to focus on sales and solution case by case, provide services and maintain relationships with major customers, and focus more operations on bill settlement and corporate account management.

Alibaba is a strong operational company, and it does a good job in operations on both the C-end and the small B-end. However, when Alibaba Cloud now faces large companies and governments, it cannot obtain them through purely operational means, and more sales and solution intervention is needed. This is also why Alibaba Cloud began to recruit sales and solution personnel from the traditional software industry on a large scale.

Review and reflection on the hard work of B-side operations

The author reviewed and reflected on the operations from multiple aspects including customers, contracts, orders, products, after-sales, channels, procurement, revenue and activities.

1. Customer part

Customers, that is, customer management. Unlike C-end operations that directly face specific and humanized users, B-end operations face customer management with an organizational nature. In simple terms, C-end operations face individual users, and B-end operations face corporate customers.

C-end operations generally carry out user operations around attracting new users, promoting activation, and retaining users. Traditional software manufacturers or industry solution providers sell case-by-case to expand customers, sign contracts and maintain relationships, and often use software such as CRM to manage customer relationships.

In B-side operations, large B-side customers generally require sales intervention to make it easier to reach a deal. At this point, the operation work is more like that of a sales assistant, assisting sales in helping customers with account registration, customer type identification, authentication, order size cost-benefit calculation, etc. However, the relationship with large B customers still relies on one-on-one maintenance by sales.

Small B-end customers can be acquired through operations, channels or market means. Transactions are facilitated by operations (such as free trials, limited-time coupons, etc.). Relationship maintenance is also maintained through operations 1:N, and the corresponding operations platform is often required to assist in online relationship maintenance. If these small Bs adopt the sales maintenance relationship model of big Bs, the company's sales costs will increase dramatically. In addition, operations must promptly identify fast-growing small B customers so that sales can intervene as early as possible to improve the loyalty and satisfaction of such potential large B customers.

Subsequently, customer value management, satisfaction, loyalty, customer behavior, etc. all need to be analyzed by operations, and for large B customers, abnormal situations need to be reported to sales in a timely manner.

The customer operation work is as follows:

In summary, we are basically missing and misplaced in customer operations:

(1) Lack of sales and pre-sales. The original large B customers were obtained through the same group affiliation. The company did not recognize the need for sales investment in these customers and did not provide sales commissions. Although we do not need sales to acquire these customer resources, in reality each company and we are independent legal entities, and transactions between companies are basically conducted in accordance with normal market operations, including contracts, transactions, settlements, etc., which are all market-based behaviors. The lack of sales makes it difficult for contract work and settlement work to be completed as planned.

In addition, customers often ask for professional architects or solution engineers to help solve problems in the cloud migration process, but we, the newly graduated operations colleagues, can only serve as messengers, and actually leave the work tasks to R&D or operation and maintenance colleagues. The quality of pre-sales service to customers can be imagined.

(2) Misalignment of operational work. As mentioned before, our early operational work was actually based on the C-end model. These operational methods can appropriately increase the exposure of the company's products, but it is difficult to attract the interest and actions of rational B-end customers.

In the absence of sales, the platform's initial B-side customers generally require ecological connections or channels to acquire, and they are basically small B customers. For example: Alibaba Cloud's e-commerce ecosystem was able to attract many small B customers within the ecosystem in the early stages. We also acquired the first batch of external small B customers through channel cooperation with the entrepreneurial park. Although the quality is not very high, we have found the right direction in this area. Unfortunately, due to many reasons such as product quality, product service costs and changes in the company's business strategy, this group of users was not well developed.

(3) There is no subsequent customer relationship maintenance, customer value analysis, etc. The lack of these basic customer management tasks makes it difficult to promote our services to large B-end customers outside of related relationships.

2. Contract Section

Unlike C-end operations, since the products and services involve large amounts of money and are a long-term cooperation model, a contract is generally required to protect the rights and obligations of both parties. In addition, the contract is also the basic basis for both parties to provide subsequent services and settle fees.

Unlike traditional software sales contracts, operational contracts are generally framework contracts, which require the agreement of core contents such as service or lease term, settlement cycle, product discounts, service catalog, etc. The specific fees are formed by the products and services purchased by the customer's order, and ultimately form an invoice settlement.

The signing and renewal of contracts with large B customers requires one-on-one tracking and promotion by sales. These customers are generally the main source of business income. For example, for the business I am responsible for, the top 10 customers already account for 55% of the revenue. If the signing and renewal of these large B customer contracts are not carried out effectively, it will bring great obstacles to the subsequent financial settlement work and have an adverse impact on business income and cash collection. In addition, large B customers generally have their own compliance processes, and contracts are basically signed and renewed offline.

The signing and renewal of contracts for small B customers is generally the responsibility of operations personnel, which can be done online or offline and the process is relatively quick.

During the contract review phase, operations need to review the contract's service cycle, product discounts, service catalog, etc. based on operating costs, customer repayments, existing service catalog, etc.

As shown below:

In summary, the problems we have in contract operation are:

There are no full-time sales staff, and it is basically the operations staff who are promoting the signing and renewal of contracts. These operations staff who have multiple roles are basically delayed in promoting the contracts of large B customers. Operations staff have no commission incentives, lack the ability to negotiate contracts, lack the ability to maintain relationships with senior customers, and find it difficult to overcome internal obstacles within customers (for example, the technical department does not recognize our products, the purchasing department has its own channels, the finance department strictly controls the budget, etc.). These tasks that require professional sales promotion are given directly to operations staff, which is like forcing them to do something they don't want to do.

During the operation process, even if we and our customers are affiliated with the same group, since both parties are independent market entities, we often encounter external competitors and lose some core customers in the process of business advancement.

3. Order section

Daily order work is basically completed automatically by the system platform, and basically does not require much involvement from operations. Operations mainly involve tracking order data, adjusting product strategies based on order data, calculating business revenue, making procurement plans, resource replenishment plans, conducting customer follow-up visits, etc.

We have our own operating platform in this area, and it is easy for operations staff to conduct analysis and monitoring. We basically have no major problems with the order-related work.

4. Product section

On the B-side, product pricing is one of the most important tasks of operations. Operations are responsible for the overall business revenue of the platform, cost management, procurement plans, etc. Operations personnel must be clear about the fixed and variable costs of the products, be able to calculate the break-even point of the products, and finally make the final product pricing based on the break-even point and the market prices of external competitors.

For other product operation work, I personally think that you can refer to the C-end product operation model. Operations require familiarity with product functions, user usage, product usage feedback, promotion of a new product, product life cycle management, etc. Of course, this is more the responsibility of the product manager.

It is embarrassing to say that due to many reasons such as operating costs, R&D capabilities, and resource scale, we only provide about 20 kinds of product services in IAAS services, including the most common cloud servers, load balancing, elastic scaling, VPC, cloud hard drives, EIP, etc. Compared with the industry leaders with hundreds of products, there is still a considerable gap in product richness, price, performance, and ease of use.

The best product strategy should be to carry out refined operations based on one's own business conditions, and not pursue large-scale and comprehensive product operations. In order to ensure the product's functionality, performance, and ease of use, and to reduce product prices through cost control, one can have a better living space.

5. Settlement

There are actually two types of settlement, and we belong to the second type:

• One is a strong platform, such as Alibaba Cloud, which basically requires customers to pay in advance to use products and services. For example, they must pay or recharge before placing an order. This settlement method is the simplest.
• One is the weakness of the platform, especially before the product or platform has been recognized by everyone, it is difficult to ask customers to pay in advance. Generally, customers use or experience the product first, and only when they feel it meets their needs are they willing to pay the corresponding fees. At this time, a contract is needed to protect and restrict the rights and obligations of both parties, and to make settlements based on the use of products and services (expressed as orders).

In the second case, the operations staff must send bills to customers in a timely manner and collect payments based on the settlement cycle of the contract.

6. After-sales service

It is the customer service job, dealing with and solving problems that customers encounter in the process of using products and services. Any colleague who first comes into contact with operations basically has to work part-time as an after-sales customer service representative to answer questions that customers encounter when using the product, especially when the product is not perfect.

7. Channel section

Traditional software sales channels: distributors, agents, partners and other channels.

C-end operational channels: various platform channels, big V cooperation, media and other channels.

B-end operational channels: For customer acquisition, refer to software sales channels; for brand promotion, refer to C-end channels.

8. Procurement

Since it is an IAAS service platform, it is necessary to purchase physical servers, storage, network equipment, etc. according to business needs in a timely manner, and build or supplement the resource pool. Operations need to calculate the resources that need to be supplemented based on contracts and orders, and provide corresponding procurement plans. IAAS service is really an asset-heavy operation project. The purchase cost of these equipment basically determines the cost of product services. The operation must control the purchase cost of these equipment to enable the business to develop for a long time.

Since procurement is prone to corruption, most companies have a strict procurement process to purchase various materials. Whether these procurement processes and systems are reasonable largely determines whether we can quickly and reasonably obtain low-cost materials. Any company's procurement more or less involves the interests of some stakeholders, and it is difficult to make reasonable adjustments from the bottom up.

For this reason, I currently have no better solution and am often driven to panic by these rigid procurement processes. I have even suffered major setbacks and am still haunted by material procurement.

9. Revenue

B-side operations require management and control of operating income, such as cost management, revenue estimation, and cash flow collection, to ensure the survival of the platform.

10. Activities

Similar to C-end operation activities, it also includes offline and online activities. For offline activities, we need to consider the scale of the event, the celebrities who will participate, the influence of the event and media coverage, etc.; for online platform activities, we need to consider such things as product promotion activities, etc.

In conclusion

Operations, like products, seem simple and have a low entry threshold, but it really takes a huge price to do it well. As the saying goes, it is easy to get started but difficult to practice.

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Author: Lao Ge

Source: Lao Ge