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The Future of B2B Software is B2U

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A few years ago, Slack grabbed attention by plastering billboards across the country with pictures of office workers surrounded by unicorns, rainbows and ice cream cones. The campaign itself was delightful. But more significantly, it highlighted a huge change in the way companies buy and sell software. Slack wasn’t targeting bosses; it was targeting employees.

These days, tech adoption goes bottom-up, not top-down. Execs aren’t the ones choosing software; employees are. In fact, since founding my company in 2014, I haven’t bought a single piece of software from a salesperson. I’ve never had to—because my employees discover products for themselves. If we graduate to need the paid version, that’s when it’s brought to my attention that we need to start paying for the software (some examples we use are: Trello, MixMax, Dropbox, Pipedrive, Slack). At that point, value is derived and the decision is easy.

I’m not alone in this. The business-to-business sales model is rapidly being supplemented with a new paradigm: business-to-user. This shift is flipping the software industry on its head. Everything from initial development to lead conversion and customer support is changing. It’s no longer a B2B world. And if you haven’t clued into the B2U mindset yet, you might be building your product the wrong way and marketing to the wrong audience.

Okay, what does “B2U” really mean?

It used to be that if you were selling business software, you focused on winning over corporate decision-makers. You’d try to land meetings, then pitch them on your product—sometimes a long, involved process. But if your prospect decided to buy, it was a big deal. Your onboarding team would help with the rollout (which could take weeks to months), and you’d have just won a long-term customer.

But that’s not how it works anymore. The B2U model bypasses traditional sales channels. Instead of pitching decision-makers, a marketing department directly targets the end user. One employee starts using the software, then shares it with a coworker, who shares it with another, and so on until critical mass is reached. Soon everybody’s using it and asking for the premium version until decision-makers implement the software company-wide and pay for premium features.

Think of it like the cereal aisle. In a B2B model of cereal, you make your case to parents—selling them on nutritional content, price and quality. In a B2U model, you market first to kids, wowing them with the features they care about (in this case, bright colors and good flavor). Then they make the case to their parents, saving you the time and energy of a pitch. Ultimately, parents still call the shots, so nutrition, price and quality do matter. But they’re no longer your point of entry.

So how does the B2U model change the product?

When your primary audience changes, so does everything else. There’s plenty of variation in the way B2U companies operate, but most share these traits in common:

  • Online conversions: The website clearly explains features and benefits, and a user can sign up without talking to a sales representative.
  • Personable branding: In general, a B2U brand is more playful and conversational, almost like a consumer brand. In contrast, traditional B2B brands tend to be formal and professional.
  • Plug-and-play setup: There’s no lengthy onboarding process. Getting started is quick and painless.
  • Tiered features: The product has both free and premium versions, so users don’t have to get the expense approved before they sign up.
  • In-product upsells: The product acts as its own sales channel. It tells users about paid features and prompts them to sign up for the premium version.
  • Viral adoption: The product is so helpful that users want to share it with coworkers and friends.

Does the B2U model make sense for me?

I can definitively say: maybe. I’m not going to sit here and pretend that every client industry is ready for B2U software. In fact, some industries may never be. And some products simply can’t be sold to the end-user first.

You’ve got to know your industry and your own product to say for sure. But here’s a list of questions to help you get started as you evaluate whether or not the B2U model makes sense.

1. Can your onboarding be simplified?

In the B2B model, purchase and implementation can be an extended process. But in the B2U model, users expect fast service. They don’t want to get on the phone, meet with a representative or wade through a long setup.

If they’ve got to import tons of data or customize a lot of settings before they can even begin a trial, users will probably jump ship. Your sign-up should be entirely online, and onboarding should be intuitive—with tutorials and templates, if applicable.

2. Can users see benefits immediately?

If time-to-value is measured in days or weeks, a B2U model makes sense. If time-to-value is measured in months or years, think B2B.

Whereas executives can be slow to make up their minds about software, users adopt tech quickly. But that also means they’re quick to abandon what’s not working well. If you go the B2U route, your product has to prove its worth before users grow impatient. I use this rule of thumb: If time-to-value is measured in days or weeks, a B2U model makes sense. If time-to-value is measured in months or years, think B2B.

3. Can your features be tiered?

For the B2U model to work successfully, users have to be able to get started without committing to an expensive package or long-term contract. They’ll want to try out a service before going out on a limb and asking their employers for funding.

That means you’ve got to be able to scale your product from a free or very inexpensive tier to a premium version. Ask yourself: Would your product still be useful if it were just the top 2-4 features or if you limited the number of boards, documents, users, etc.? And if so, is there sufficient incentive for a company to pay for the premium version?

4. Can you make a viral play?

Like consumer products and services, B2U software lives or dies by word-of-mouth. If only one guy at the office is using your product, his boss probably won’t spring for the premium version. You’ve got to be able to turn users into fans and fans into ambassadors.

You can make your product more contagious by embedding prompts to invite friends, or creating incentives to recruit new users. For instance, Dropbox gives away additional storage space when a user gets a friend to join. Ultimately though, your product needs to be so excellent that users want to share it in the first place.

You’ve got to be able to turn users into fans and fans into ambassadors.

5. Are you targeting small-to-medium businesses?

The B2U model makes it possible to target several smaller businesses at the same time. And once your product has grown its user base and demonstrated success, you’ll find it’s easier to land the big fish.

It’s not that it can’t work for enterprises, but if you pursue enterprises, you’ll typically have to follow-up with more direct sales activities and customization. Though, the B2U model can get your foot in the door at large enterprises.

Of course, some industries and companies still function with top-down tech adoption, and certain kinds of software can’t really have the kinds of features and setup you need for a successful B2U product. So if you answered “no” to those questions, don’t despair.

But if you answered “yes,” it’s time to take a hard look at the way you’re doing business now and consider big changes. For many companies, a B2U model can speed growth dramatically. Converting prospects into users online takes less time and energy than pitching to corporate decision-makers. And when it’s easier to expand your customer base, it’s easier to achieve that coveted hockey stick growth.

A B2U model also allows you to stay nimble without sacrificing scalability. With so much of the sales and support processes digitized, B2U companies can operate with much smaller teams. And of course, lowering overhead reduces risk because it requires a much smaller upfront investment.

A B2U model also allows you to stay nimble without sacrificing scalability.

Most importantly, the B2U model is what today’s customers expect. Users are more sophisticated, and they want to be able to buy software for work the same way they buy software for personal use. That means it’s more important than ever that your product be useful, intuitive and delightful. It also means that the best products are the ones that succeed. You get to make your case directly to users, and if you can make their jobs easier, they’ll choose you every time.

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