There has been a lot of focus recently on customer value. Term like customer experience, relationship management, and customer-centricity have become common in the business press. But almost all of the focus has been on the B2C business environment. Now we have some data that is based upon the B2B environment – and it isn’t pretty.
Gallup has just published an extensive report titled, “Guide to Customer Centricity: Analytics and Advice for B2B Leaders.” According to Gallup, 71% of B2B customers would change to a different seller in a heartbeat. The customer does not feel valued. So if a better deal comes along, they will jump at it. For most products and services there is little differentiation between the major competitors in the B2B industry segments. As Gallup says, “There is often little in the company’s product or service itself that helps it support long-term business growth.”
New products or product offerings are not sustainable because competition will soon match with similar features and functions. Pricing is not sustainable because someone can always go lower to “buy share.” Service delivery is not sustainable because that again is something that is easily matched by the competition. So what is left?
Sustainable long-term growth comes from building and growing customer relationships. But most B2B companies have not invested in the relationship. As Gallup noted, “They invest in Lean, Six Sigma and other methodologies that are crucial for keeping costs down, but they don’t have a plan for maximizing their customer relationships.” Forming lasting relationships takes time and effort. And that time and effort is not episodic; it is continual. (Just thing about the time and effort needed to form and maintain a good marriage relationship.) It is not a quick hit business initiative or a new app for your phone.
That is the difficulty. To truly create a customer-centric organization and build lasting customer relationships, a transformation is required within a company. It is as much about culture as it is about relationship management data and account teams. Speaking of account teams, the great relationship that is built between the customer and the salesperson will quickly be destroyed if the delivery is consistently late, or fi the invoice is full of errors.
Let’s look a little closer at the relationship. One of the Gallup findings is that strong customer relationships are built upon collaboration. But many companies with B2B offerings are reluctant to collaborate. Their fear is that if they share too much of their knowledge and insights with their customers, the customers will no longer need them. The customer will be able to create and operate the products and services that the seller is trying to sell. But the only reason that the customer would even consider such a thing is if they have become frustrated with the quality, price and service that they are receiving. When the seller focuses on creating customer success and customer value, the customer is actually likely to send even more business their way.
The Gallup report also talks about the need for positive proactive customer engagement and that a roadmap and an action plan are needed to make that engagement happen. It isn’t just osmosis that creates engagement. Management must purpose, plan and execute if they want to develop strong customer relationships at all points of customer-seller interaction. The report continues on to highlight the importance of a seller’s supplier network and the use of data analytics. All of these become tools to be used by an empowered cross-functional customer account team.
The report is a long one, 88 pages. And there are no easy answers. If you are looking for “seven steps to attain customer centricity” you are out of luck. As Gallup notes, this is hard work and often requires an organizational transformation. However, if you don’t make the changes, but your competitors do, you won’t be in the game. Remember, 71% of your customers are ready to switch as soon as a seller shows them that they really care about customer value and customer success.