For B-side operations, you should master the thinking patterns and common sense!

1. Discussion

The reason for writing this article was an interesting face-to-face meeting. We found a meeting room in a cafe and talked about their company's products and operational strategies for existing businesses.

After I got back, a friend of mine happened to be hesitating whether to go to their company for an interview. The more I thought about it, the more interesting it seemed. So I started a discussion about B-end operations in the Jianfa Operation Community: from the differences between B-end and C-end products, the differences in users to the differences in operation strategies.

The friends in the group had a lively discussion. I have selected a few topics that everyone discussed:

(1) "B-side operations are generally divided into online and offline. Online operations are mainly based on activities, most of which are brand-related and held by the company itself; online operations are the very common SEM and SEO. The characteristics of the B-side are long cycles and many decision-making and business links."

(2) "To put it simply: the B-end focuses on brand, while the C-end focuses on users. This is because the C-end can directly close deals with users through activities, but the B-end cannot. The B-end needs to sort out its brand image, or have a mature packaging case to create a trust endorsement; at the same time, it needs to do some offline activities to increase brand marketing."

(3) "The B-side user decision cycle is long, the decision-making level has many people, the renewal/repurchase rate is high, and the cost of leaving the product is high. The B-side should establish standardized operating processes, product training, and customer operations, and should not blindly apply the C-side operating strategy. For example, the C-side, which has a wide range of application scenarios, gives away red envelopes upon registration, which is not satisfactory on the B-side. The B-side should create its own brand effect and build a star enterprise."

(4) "To distinguish products with similar attributes and to distinguish customer needs, it is not that B and C are different, but that the attributes and needs are different. When making products, whether B or C, I only study product attributes and user needs." After divergent discussions, I found that some partners who operate on the C-end often hold a common mindset, while those who operate on the B-end hold a differentiated mindset.

How to put it, the thinking inertia of some C-end operators will make them apply their previous experience to the B-end. For example, they will say: B-end and C-end operations are both human interventions in products and users, and the objects of operation are all product users.

This seems to make sense on the surface, but if you think about it carefully: the users of B-side services are a group, and the product itself is different from that of the C-side. It is obviously not feasible to directly apply the C-side operating strategy, and it cannot be implemented; even if it is done reluctantly, it will only be half the result with twice the effort. So, what kind of thinking patterns are needed for B-side operations?

Based on the discussions in the community and past operational experience, I have made some conclusions:

2. To B business operations require a mindset

1. Customer-centric thinking

"Customer-centric" thinking is the basic thinking that operators need to have. As the saying goes, “He who wins the users wins the world”, customers are the key consideration for operations personnel at both the strategic and execution levels.

However, what are the characteristics of To B users?

To B’s “o” users are a group with attribute labels, including: decision makers (bosses), managers (heads of business departments) and executors (corporate employees).

Compared with the single individuals on the C-end, B-end users are more three-dimensional. Their value proposition is also based on the company's perspective, focusing on efficiency, cost, control, and pursuing the security, reliability, and stability of services.

In view of the complexity of the user group and the characteristics of the value proposition, the user decision-making chain of B-side operations is long, involving many business departments (finance, administration, procurement, business departments, management), and each role has different levels of personnel. If you simply use the To C promotion method, it will not have much effect on B-side customers.

B-side user operations should start with service, explore what pain points the product solves for users, and break down the demands of each group on the B-side; and conduct relevant decomposition to individual individuals, such as employees who use enterprise service products, and then think about how to use them in combination with the C-side operation strategy.

1. The idea that serving old customers well is more important than serving new customers

For example:

To B's new users are like two young men and women who have established a romantic relationship but have not yet married. Once there is any incident during the relationship, they may break up at any time.

Old users are like a married couple who have gone through the adjustment process of love and marriage, and now live a life of firewood, rice, oil, salt, sauce, vinegar and tea.

Of course, old customers have trust in marriage, and the cost of divorce is very high, so living together for a lifetime is the underlying consistent expectation of both the company and the customers. Therefore, compared with new users, old users have much higher loyalty, trust, and understanding.

Since the cost of separation is very high, unless one party is at fault, both parties are willing to grow old together.

In actual business, in order to provide differentiated services to old users, most To B companies have set up Customer Success departments and invested sufficient energy in serving old customers. This is the practice of this common sense.

However, in order to truly achieve customer success, in addition to establishing standardized customer service processes, we must also provide customers with more support than they expect and help them increase their value; respond to customer demands and questions in a timely manner and continuously tap into greater customer needs.

To put it more roughly, it means not only helping old users save costs, but also figuring out how to increase the value of corporate customers through the services they sell.

If you can retain old users, the LTV will naturally be high. If the CAC remains unchanged, it will be critical for B-side enterprises.

1. Sustainable sales (renewal rate) thinking

Sustainable sales thinking means that in addition to GMV, the more core operating indicators of B-side enterprises are renewal rate, MRR, and ARR.

Because To B services are generally paid on a monthly or annual basis, in theory it is a more cost-effective deal for customers; at the same time, it forces products and services to be continuously upgraded and optimized in order to obtain longer-term business value.

1. B+C Operational Thinking

B+C operational thinking is better than one-way thinking.

Some people who have been working in C-end operations for a long time will copy their previous operational thinking when they switch to B-end products, and vice versa.

The reason for this problem is that most of them only see the similarities between the two and ignore the differences, which results in the inability to implement the formulated operational strategies. In other words, even if it is implemented, it will not produce good results.

So what is the B+C thinking?

In fact, it is to superimpose C-end operation thinking on the B-end operation thinking.

Because among the customers of enterprise service products, the real users are the employees of the enterprise. These employees are actually individuals, and the C-end attributes of each individual are more obvious. When thinking about operational strategies, we must start from the C-end perspective and implement B-end thinking.

Of course, some people will ask, what exactly is B-end thinking + C-end thinking? How to combine?

Specific problems should be analyzed specifically. Here I will make a basic assumption and provide a way of thinking to facilitate understanding.

For example: A certain enterprise service company has gone through a sales-driven and product-driven process, and its products have become relatively mature. Even if sales continue to expand new customers, it cannot bring about exponential growth.

However, in the plate of previous old users, there is still a large number of C-end users of enterprise users waiting to be discovered. There is a piece of pie, but it cannot be eaten.

At this time, C-end operational thinking needs to be involved, combining customer success to explore the value of old customers, analyzing product users, and considering whether it is possible to incorporate commonly used C-end operational methods, such as: introducing a membership system, a points system, a user incentive system, etc., and combining the user's life cycle to achieve secondary growth.

1. GTM (go to market) strategic thinking

Go to Market Turn to market strategy, or in a more abstract sense, it is the framework that guides market strategy, the daily, weekly, monthly, and quarterly activities required to achieve strategic goals.

Develop integrated marketing campaigns by building GTM modules (differentiation, value drivers, sales information) to convert marketing leads into qualified sales opportunities.

In essence, it can be understood as a series of marketing activities related to products and users, the main purpose of which is to bring products to the market and acquire users.

(Source: Wikipedia)

This kind of thinking is particularly important in B-side enterprise operations. Mature GTM processes and methods can effectively deliver product value, improve the conversion of leads to sales, increase the activity of old users, play a role in recalling lost users, and so on.

3. Basic knowledge of B-side operations

When formulating operational strategies, we will inevitably use some classic models or methodologies that we have compiled ourselves, such as: AARRR Pirate Model, RFM Model, User Life Cycle Model, Double Pyramid Model, etc. The enterprise service industry also has some basic common sense that needs to be understood for operations. In addition to operational thinking, operational common sense is also very important and can assist us in specifying operational strategies and judging operational value.

1. Macro classification of B-side enterprises

(1) FI (financial institution) taxation system: for example, it helps enterprises solve payment-related problems, such as finance, expenses, and travel. Domestic related enterprises include Kingdee, UFIDA, and Cloud Accounting.

(2) OA (Office Automation): Domestic related companies include DingTalk, Yunzhijia, and Funshare;

(3) CRM (Customer Relationship Management): Domestic related companies include SalesEasy, Red Circle Marketing, FunShare, EC (Economic Customer Service), and Field 365;

(4) HR (human resources), for example: white-collar and blue-collar recruitment, on-the-job training and pre-employment training. There are many good companies in each segment in the United States. Domestic companies include Liepin.com and Dayi Technology.

(5) ERP (Enterprise Resource Planning): Relatively complex, it is designed for super large customers, such as SAP China.

To sum it up in one sentence, B-side enterprise services are to help companies manage money, people, and customers intelligently and efficiently.

1. LTV/CAC=3

The basic model that is considered a healthy SaaS company is:

CAC (Customer Acquisition Cost) = Total of all marketing and sales expenses / Number of newly acquired customers

LTV = ARPA (average MRR per customer) × customer lifecycle

1. TTDDD

This is a basic model for a SaaS company’s growth from its initial five years to its IPO: T stands for 3x growth; D stands for 2x growth, indicating that with 3x and 2x growth as indicators in the first five years, the company will basically meet the listing requirements by the fifth year.

This has also become a comparison standard model for many SaaS companies to measure their own development.

1. PFM (Product Fit Market)

Products must adapt to the market, and B-side services must provide companies with products that solve a problem. Many products do not solve user problems. Products that do not solve user problems are not good products and have no value in existence.

1. PaaS (Platform as a Service)

It means providing a complete software development and deployment platform, including application design, application development, application testing and application hosting, to customers as a service.

It is an ideal product, but PaaS requires foundation and process, a large and verified user group, and complex and configurable customer needs. These two parts are the basic soil for the formation of PaaS, or in other words, PaaS is the result of growth, not the product of design.

1. MMR (Monthly Recurring Revenue)

A SaaS product should use monthly recurring revenue (MRR) and churn rate as core drivers, while also considering the estimated customer acquisition cost and monthly marketing budget.

ARR (Annual Recurring Revenue) = MRR x 12

4. Enterprise services: China is still a "blue ocean"

When talking about enterprise services, we have to mention Salesforce. In 2012, Salesforce's revenue exceeded 2 billion, reaching 2.26 billion US dollars. Looking at domestic enterprise service companies, Fenxiang Sales, SalesEasy, Red Circle Marketing, DingTalk, etc. still have a considerable gap with international giants in terms of market share and corporate market value. Of course, this also shows that there is still a lot of room for development, which is why BAT has been planning to enter the enterprise service market.

According to data released by CNNIC as of December 2018, enterprise services and online finance companies constitute the first echelon of cybersecurity unicorns, accounting for 15.9% and 14.2% of the total number of companies, respectively;

According to investment data released by the investment community: the number of companies invested in enterprise services in 2018 was 522, accounting for 13.8% of the investment companies in 2018, and the investment amount was approximately RMB 349.47 billion (the exchange rate between the US dollar and the RMB was calculated at 1 US dollar = 6.75 RMB).

Judging from the number of investments in enterprise service companies, the amount of investment, and the current share of unicorn companies, it can be seen that investors and Internet giants are beginning to stake out their territory in the enterprise service market.

(Distribution of cybersecurity and informatization unicorn companies by type)

(Internet and IT unicorns: new generation of unlisted Internet and IT companies with a valuation of more than US$1 billion in the most recent round of financing. The definition standard also refers to the financing data of start-ups and the valuation level recognized by mainstream investment institutions in the primary market.)

Alibaba and Tencent are increasing their investment in enterprise-level services, while the domestic Internet C-end market has become saturated. The embarrassment of most C-end products at present is the lack of traffic monetization, the desire for user growth without traffic, and C-end users are no longer the "newbies" they were a decade ago.

Compared with the C-end, I am still very optimistic about the development of enterprise service companies, not only because domestic unicorn companies are far from Salesforce.

Another reason is that compared with C-end products, the B-end threshold is relatively high, and the business model is more like a business. Although sales are sometimes the main focus and still a bit traditional, in the "cold winter" season, being able to support yourself and survive is the key.

Back to the operation personnel, for enterprises, it is time to choose candidates with C-end operation experience.

Regardless of whether they have experience in B-side operations in the past, as long as they have B-side awareness in their operational thinking and operational strategies, it will be better than pure B-side operations. Because combining the two will bring new creative ideas.

For operations practitioners, they need to change their mindset. This does not mean that they do not need to consider growth, activity, and retention, but that they should consider more practically how to create more core value for the company.

Putting aside the mentality of a worker, another way to make yourself more valuable is to bring higher value to the company. Therefore, we should prepare for the future and cultivate B-side operational thinking to welcome the new wave of "trends" of the times.

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Author: Wang Yanfei

Source: Wang Yanfei