B2B Markets: People, Data or Both?
In B2B markets personal relationships are critical. That’s why companies invest so much in employees who are responsible for ensuring those relationships work.
Historically, B2B companies have had powerful sales functions while marketing used to focus on market research, promotional activities and customer insight. In more recent times ownership of the customer insight (and relationship) has become less clear. This has been driven by marketing departments becoming more responsible for the total customer experience. Consequently, a greater proportion of available resources are being committed to managing customer relationships. Companies are doing this because they need loyal customers, receptive to cross- and up-sell offers if they are to grow revenue. How do they make sure that is happening? The traditional approach is generally a combination of the following:
Trying to employ the right people to manage customer relationships
Training them in what they hope are the right skills
Promoting the right ones to management roles
Building CRM systems to increase the level of discipline in sales activities
Monitoring the sales numbers
Tracking how the customers feel through customer satisfaction surveys
This has been the mix for many years – it’s difficult to believe anyone can imagine it is as good as it gets. So much in this approach is based on guesswork, anecdotal evidence, gut feel and what worked before (in a changing world). But B2B relationships are complex – how can managers adopt a more rigorous approach when there are so many factors to assess? More Insight is needed.
Customer Satisfaction Surveys are not enough
For many years companies relied on customer satisfaction surveys to get some form of external validation for their sales management. At least, the thinking went, a survey will provide some form of test of how they stand. However, such surveys have proved disappointing for a range of reasons:-
It’s generally accepted that, except at the extremes, satisfaction is a poor predictor of subsequent behavior
Satisfaction surveys tend to be conducted on an anonymous basis so data is only providing an overall shape – no specific customer action plan can be implemented
Scores tend to cluster around 7-8 out of 10 – which does not tell the company very much – is 7.2 out of ten good or bad?
Because they try to cover every aspect of the business relationship surveys tend to be superficial on individual issues
The many different areas covered by satisfaction surveys tend not to be weighted so different issues are treated equally – when this may not be the case in the customer’s mind
It is very unclear how action to improve customer satisfaction will translate into profits
Over time companies have become disappointed by traditional customer satisfaction surveys as an effective weapon in their armory, but there seemed little alternative.
Net Promoter has helped B2C businesses focus on getting closer to their customers
In recent years understanding the customer view has been re-energized by the emergence of the Net Promoter Score. Instead of the uncertainty of customer satisfaction, Net Promoter offered a single score. This made it easy to measure, report and target. Furthermore, the Net Promoter Score claimed to be superior in terms of predicting customer behavior and it was no longer anonymous – data would indicate which customer said what.
Net Promoter has led to big changes as marketers realized they could now take a more active role in managing customer relationships. Whole departments have sprung up and new senior roles have appeared with titles like Director of Customer Experience.
Relationship Climate™ offers B2B businesses a major step forward in managing their customer’s as people
There is no doubt Net Promoter can offer companies a quick and easy way to get a temperature check on how a customer feels and works great in B2C. But in the more complex area of B2B relationships, more is needed. Net Promoter on its own cannot unravel a customer relationship and point the way forward to make improvements. Until now there haven’t been any programs to enable companies to get a real understanding of those relationships. What is needed is data that predicts long term loyalty, the ability to benchmark, so results can be seen in context, and output that leads to effective action. Such a program now exists. It’s called Relationship Climate.
Our Relationship Climate approach is a combination of Encompass-CX survey-based 360 feedback (which gives companies a full picture of their B2B customer relationships) coupled with professional services to ensure adoption, action, and results. Relationship Climate gives leaders the data they need to develop sales strategies for each customer based on a full understanding of what they need to do to improve the relationship. That means they have the knowledge and understanding to enable them to improve customer retention, increase up-sell and cross-sell and improve margins.
Relationship Climate offers companies a step into the future. It gives them the opportunity to build more profitable customer relationships through a scientific approach to understanding what they need to do. Let's talk about how to transform your customer relationships and your business.