Why Product Management for Enterprise Companies is Different

Product Management for the Enterprise Customer is Different

The role of a product manager can differ by industry, company culture, and other factors. Some product managers are technical; others are not. Some spend most of their time overseeing the day-to-day logistical details of the product’s development. Others keep their focus high-level and leave the daily tasks to product owners or project managers. Another factor that can affect a PM’s role is the type of customers the company’s products serve. Product management for the enterprise customer is different from building products for consumers or small businesses.

In this article, we’ll discuss what makes enterprise product management unique.

What is an Enterprise Product Manager?

First, we need to define what we mean by enterprise product management. This definition requires clarification because we use the term to describe two different scenarios, including:

1. A product manager (PM) whose company develops products for large organizations.

2. A product manager whose company is a large organization itself.

For this article, we will discuss the enterprise product management role further by using the first definition above: developing products for large organizations.

Let’s narrow this definition further by describing the PM’s customer—the enterprise—as a business with at least 1,000 employees.

What Are Their Challenges?

Product managers face many challenges, no matter how their companies function or who their user personas are. The job requires making the best possible strategic decisions for the product while juggling competing demands from multiple stakeholders. But enterprise product managers also face several unique challenges. A few examples include:

1. Satisfying numerous levels of customers

When you build products for an enterprise, you need to understand the objectives, challenges, and desires of several people or teams in your customer’s organization. Each of these personas will have their reasons for wanting your product or their purposes for objecting to it.

An enterprise product manager, for example, needs to understand the user persona vs. buyer persona distinction. This differentiation will require developing both the product itself and its selling messages with two different audiences in mind.

2. Dealing with the too-big-to-turn-down customer

Another unique challenge facing enterprise product managers is the pressure to prioritize demands from larger corporate customers.

Often the company that spends the most on your product, or the one with the most name recognition and clout, will demand adjustments to the product that the rest of your users won’t find useful. These requests put PMs in the awkward position of having to shift priorities and resources around to do work on the product that won’t add much strategic value to it.

3. Obtaining market validation can be a slow, frustrating process

When you develop a product for consumers, you can push an early iteration of it—the minimum viable product—out to the market and quickly learn whether or not it resonates with users.

Enterprise products typically have a slower market-feedback trajectory. Business customers often require internal approval to begin using a product. The end-user within the company might need to obtain the budget to purchase it. And even if your company offers a limited-time free use of your product—such as a 30-day free trial of your SaaS application—the business customer might still have to get an okay from the company’s IT or cybersecurity team before using it.

For these reasons, it can take longer to learn if your product is achieving a market fit with enterprise customers.

How does an Enterprise Product Management Organization Operate?

Enterprise product management also differs in several ways from consumer product management in terms of how the cross-functional team is structured and how they work together.

Here are a few of the key structural characteristics of a typical enterprise PM team:

1. They use a direct selling model

Consumer PMs have several methods available to them for turning their products into revenue, such as giving the products away for free and leveraging their users to sell advertising.

Selling products to the enterprise market, particularly complex technical products such as B2B software, typically require a direct selling method. This method includes selling either licenses (seats) or subscriptions to the software.

2. They use a high level of cross-functional collaboration

Because selling into a large business can be complicated and involve many stakeholders in the customer’s organization, the enterprise product management team must enlist the help of many stakeholders across its organization.

The enterprise PM must work closely with marketing, sales, customer success, development, and other departments and keep these teams informed of the product’s progress at all stages. With so much to monitor and manage, enterprise product managers should maintain a product roadmap for a high-level view of their goals and objectives.

3. They focus on meeting the needs of several personas

We listed this above as a challenge unique to the enterprise PM, but it bears repeating because it’s such an essential part of successfully building products for large organizations.

To build a product that an enterprise will purchase, you will need to keep two distinct audiences in mind throughout the development process: the end-user and the buyer. In an enterprise, these will rarely be the same person.

Enterprise PMs develop products to improve the jobs and lives of the employees at their customer’s company. Because a product experience that remarkable earns the interest and loyalty of the end-user. At the same time, they prioritize functionality that will help solve significant problems or create strategic opportunities for the company itself. This organization is how the PM earns the interest and loyalty of the customer’s buyer persona—often a company executive.

What About the Other Type of Enterprise Product Manager?

As we noted above, enterprise product management can also refer to a PM whose company itself is a large organization.

We’ve written about why product roadmaps look different for enterprises and startups. The structure of a company and its objectives can change as it grows from a startup into a large organization.

If you’re wondering how the product management role might change when the PM’s company crosses the “enterprise” threshold read our most recent annual survey, ProductPlan’s Annual Report: Product Management in 2020.

The most significant distinction we found in 2020, surveying more than 2,500 product professionals, was this:

“Enterprise product managers (1000+ employees), in particular, struggle with internal politics and that what small to medium-sized businesses (SMB) product managers (less than 1000 employees) like least are having reactive tasks vs. proactive strategy.”

— ProductPlan’s Product Management in 2020 Report