Who is the Customer in Business Marketing?

The 4 critical customer subtypes for tech products

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This is Part 1 in in a blog series on Customer Relationship Marketing.

One of the reasons business marketing is so complex is because the very idea of the customer can be unclear when selling to a company. Who exactly is the customer for a tech product? Is it the person who evaluates the product or the one who signs the check? Is it the employee who uses the product or the IT person who keeps it running? Are they not all customers? If so, should we market to all of them? If not, how should tech brands think about classifying them? Also, doesn’t the type of technology affect the kind of customer to pursue? So, are there any common patterns between the customer for an HR SaaS application and that for a data management tool? In this post, I explore these questions.

The Problem

There is no single entity called a business customer for a tech product at a company. The term “customer” is used without precision, and it can mean different categories of people depending on context. For a tech product, the salesperson may see the customer as the buyer who is going to fund the deal; for product managers, the customer is the user of the product who spends time within the tool; and for the customer success team, it may be the app deployment team within the company. As various programs, partnerships, and channels are activated to reach a business customer, this confusion results in a lot of complexity; poor segmentation, targeting, and positioning; and ultimately, wasted resources across the tech company.

This problem is compounded by the fact that not all tech products are directly used by business users. Most tech products are in fact tools and infrastructure for tech users (e.g. developers) or tech specialists (e.g. design engineers) to build digital products and services for their internal business users. And there are some tech products that both serve the business users directly while being platforms for tech builders (e.g. Salesforce is both an application for business and a platform for developers).

The Customer Quartet in Business Tech Marketing

There is a fundamental division of labor within a business on how it adopts tech products. All companies have this division. On the business side, those who use the product are often different from those who buy the product; on the technical front, those who build from product tools are different from those who buy such tools.

A basic customer pattern can be derived from this division of labor. There are four main customer subtypes: the business user, the business buyer, the tech user, and the tech buyer. Virtually all the software tech products need to target one or more of these customer subtypes. Each of the subtypes in the customer quartet cares about a different aspect of a tech product. And all of these customers are supported by a coterie of IT enablers.

Further, these four customer subtypes should be evaluated using different frameworks based on what each customer cares about.

*Flow Framework

This is the core customer pattern. Let’s build this up in more detail from first principles.

A User and Buyer Dyad

Minimally for B2B tech products, the user and buyer pair (dyad) is the most simple distinction within a customer. Most consumer products do not have this distinction, while the majority of business products do.

Users care about getting a job done and being productive and efficient with an app or service that is made available to them by their employer. They derive personal benefits from the product, such as improved productivity.

Buyers care about economic value created and competitive advantage conferred by a tech product to the company. They are rewarded for the economic value of the product.

This customer dyad is supported by a coterie of IT enablers who ensure that the product works within the company’s tech landscape. They are the keepers of shared technology infrastructure, apps, data, and security policies. They usually provide the users with the product and ensure its governance and sometimes even the operations within the company.

Business marketers often confuse this simple distinction between users and buyers when they create customer programs. It is critical for marketers to understand this division of labor in order to market their products correctly.

While the customer dyad is valid for virtually any tech product, how it manifests depends on the type of tech product and where that product fits in the business IT continuum within an enterprise.

Software Stack: Apps, Infrastructure, and Business Platforms

Software is transforming businesses from both outside of and inside the company walls. From the outside, a business can choose new apps and services from SaaS companies that improve a business function or work process with cloud-native applications that run outside the company infrastructure. From the inside, every large company is becoming a software company and needs to run modern apps, data, and software operations to support their business. They are becoming software factories and are doing so by upgrading and modernizing major parts of their tech infrastructure and tools. Tactically, they need to be cost effective (with cloud computing), data driven (with cloud-based data and AI infrastructure) and agile (with microservices and serverless architecture for new applications). In fact, they need to do this to survive long term.

Any tech brand selling to a business needs to understand this transformation. While there is enormous complexity in software stacks within an enterprise, most of the tech products within a business can be simplified to three categories for marketing purposes:

1. Business apps and services are consumed directly by the business. All business apps and data solutions, from Salesforce, Marketo, and Adobe to Netsuite, SAP, and Oracle, fit in this category, as do all the niche SaaS offerings covering various business processes. Business-specific data AI solutions also fit here, since their primary audiences are business users.
2. Tech infrastructure and tools are consumed by technologists either within the company or on behalf of the company. Examples include cloud software stacks for developers to build cloud native apps; data platforms like Spark or Kafka for data engineers to build data pipelines, reports, and monitoring; and AI frameworks like TensorFlow for data scientists to build machine learning models. In fact, the vast majority of the tech products fit in this category of tools targeted at tech builders and practitioners and that don’t touch the business user directly.
3. Business platforms bridge the two categories. Here, the software stack acts as a platform that serves both the business users with some ready-made apps as well as the developers who can use lower level primitives (e.g. APIs and open source frameworks) to build custom use cases. Examples include the Stripe payment platform for merchants, industrial IOT stacks for frontline manufacturers, gaming stacks like Unity for gamers, and marketing stacks like Adobe for marketers.

Let’s apply these distinctions and see how the customer and product subtypes segment the landscape.

Business Customer Dyad for Business Apps

For all business apps and services, two major subtypes are the business user and the business buyer, both supported by IT enablers who ensure operations of the business apps and services for the company.

Business users interact with the product (e.g. through clicks, swipes, and talks) as part of their business process or to get their job done. These are mostly knowledge workers who do digital work, but increasingly, frontline workers and even customers and partners are getting empowered with business apps through connected devices and networks.

Business buyers write checks for products. Ultimately, they are responsible for the business value generated from the product. They usually own and run a business function like marketing, sales, manufacturing, or finance and are responsible for business metrics improved by the technology.

IT enablers are often part of business IT teams supporting these business functions. They take the product and enable it for a specific solution to the customer’s unique business problem. They ensure this solution is made available to business users to get the job done and to the business buyers to track benefits from the product. Typically, these IT enablers are on the sysadmin, dev ops, app and data integration, deployment, and support teams.

Examples: Business Apps and Services

*Dropbox
*Coupa
*Google Classroom
*Bluecore

Tech Customer Dyad for Infrastructure and Tools

For software infrastructure and tools, the two major customers are the tech user and the tech buyer, both supported by the IT enablers who ensure that these tools and infrastructure operate within the IT landscape of other tools, architectures, and policies. Tech customer users and buyers should be treated as a distinct category from all the IT enablers who serve support functions for all IT needs.

Tech users are typically the workers who run the software factory for a company. They use various tools to build, deploy, and operate software artifacts across the entire software development lifecycle.

The largest group of tech users is the software developers (over 20 million worldwide), who code new apps and services for the company. With the rise of big data and AI, another major group is the data engineers and data scientists who build data pipelines and create machine learning models to feed the software. The third group is IT ops who integrate, test, deploy, and manage the software operations of a company — both new and old and in the cloud and on premise. All these tech users may work directly for the in-house IT teams, the technology service partners, or other intermediaries.

Increasingly, in engineering-intensive industries, such as manufacturing, energy, and telco, the tech users are product engineers who build core engineering products and services using specialized tech tools for their tasks (e.g. computer-aided design and emulation tools).

Collectively, these tech builders are the largest pool of laborers helping build and deliver the software that is “eating the world.” Developers are the bricklayers that are building tech ramparts for innovative companies to breach the large enterprise incumbents; now, they are also working for the incumbents who are transforming from within.

Tech buyers write checks for these tech products. Ultimately, they are responsible for the economics of the tech infrastructure (total cost of ownership) at the company, the long-range agility and scale of its architecture, and tech governance and regulation. Typically, the buyers of tech tools are the leaders of the core IT buying centers in a company, such as VPs of apps, data, integration, infrastructure, and network. For engineering or specialised tools, the buyers are the heads of engineering or product functions.

IT enablers bring these tech tools to life for developers and engineers and maintain the infrastructure and operations around the tools. Typically, these IT enablers are the sysadmin, dev ops, integration, deployment, and support teams from core IT departments. In case of specialised tools, the IT enablers may be dedicated IT or engineering support teams who maintain the tool.

*Google Apigee
*Google AI
*Confluent
*Splunk
*Autodesk

Customer Quartet for Business Platforms

In the last decade, we have seen the emergence of business platforms that target both business and technical users and often require both business and tech buyers in their selection and operations.

These business platforms often combine all four customer subtypes — Business & Tech Customer Quartet — with a coterie of dedicated IT-enabling teams of different skills to support them.

IT Enablers for business platforms need to cover a blend of business and IT support functions, including business-IT requirements, dev portals for developers, app monitoring by devops, data and security ops, and audits as needed.

A few examples are listed below.

Stripe is a payment API platform whose primary tech users are developers who need to add payment capability to ecommerce apps and sites. Their tech buyer is the IT owner of payment gateways, and the business buyer is the ecommerce merchant looking for a frictionless user experience. Their IT enablers are those who operate and support software products for the developers (e.g. software development environment and dev tools approved by the company).

LivePerson is a cloud platform for AI-enabled conversations between customer agents and end consumers. While used mostly by business support teams, the platform can be extended by tech developers to build custom experiences.

Freshworks is an emerging sales, marketing, and support platform for small businesses with an emphasis on simpler user experiences while also offering tools for developers to extend and a marketplace to extend capabilities.

Looker is a data visualization product for a tech user (data engineer) who builds the integration of data and enables different reports for business users of different functions, like finance and sales, who are the beneficiaries.

Salesforce has a suite of applications for sales, service, and marketing business users purchased by business buyers like the CRO, CSO, and CMO respectively. They also have a platform (AppExchange) that is purchased by IT app and integration teams (tech buyers) for developers (tech users) to extend and build additional apps.

*Stripe
*LivePerson
*Freshworks
*Looker
*Salesforce
*Adobe

Key Takeaways

• Most customer classifications for business marketing are poor.
• The most common pattern of customer classification is the customer quartet — user/buyer pairs in business and in tech — based on division of labor.
• Minimally, we need to classify and maintain the core distinction — a user-buyer dyad — in all our marketing efforts.
• Software stacks can be simplified to apps, tools/infrastructures, and business platforms.
• Customer dyads can be business focused for apps and tech focused for tools/infrastructures.
• Tech builders (developers, engineers) are a critical set of users for most tools and infrastructure products. They are driving the fate of all innovative upstarts, and will do so of large incumbents as well.
• For emerging business platforms, marketers may need to focus on all four types in the customer quartet.

References

• Software DevOps LifeCycle blog and article
• Flow Framework by Mik Kersten
• Jobs To Be Done: Competing Against Luck by Clayton Christensen; JTBD by Anthony Ulwick
• Value Chain by Michael Porter
• Value Proposition Canvas by Alex Osterwalder et al.