The 9 Drivers of B2B Customer Centricity
For B2B organizations, customer centricity—an unyielding focus on customers—is even more critical than for consumer-targeted organizations, as they face such unique challenges as customer duality, uneven sales patterns, different sales or distribution channels, and outside sales. Disaffected customers can influence the viability of the company.
So, why do the majority of B2B organizations fail to make customer centricity a core strategy? Today, most companies do not understand what customer centricity really means and how to make it a part of the organizational culture. Most associate it with a once-a-year customer survey or report from sales staff or occasional in-person meetings with customers. In a recent study, nearly 50 percent of the companies evaluated defined themselves as customer-centric; however less than 10 percent of the companies actually were.
How do B2B organizations become customer-centric? Here is a nine-point plan:
Understand Customer Centricity: Listen and react to customer needs, involve customers in product or service development processes, and measure customer experience continually. Organizations should foster a customer-focused culture, establish strategic customer experience benchmarks and manage by measured performance against these benchmarks.
Implement Customer Experience Measurements: Customer-centric organizations establish a robust customer experience measurement system that provides experience metrics regularly, typically weekly or monthly, at every level of the organization and act on results.
Address Customer Duality: Typically, B2B companies have at least two customers for every transaction: those who pay them (distributors or OEMs) and those who buy their products (end users). In reality, end users are the customers who decide to buy the product again. This duality is a dilemma for B2B companies, as they often do not have direct access to end users.
Customer-centric B2B companies recognize this challenge and ensure that they listen to both types of customers. For one organization, we partnered with channel customers and brought them under a common customer experience system to view their own metrics at no cost. The manufacturing organization also shared best practices with the channel partners. As a result, the channel partners became more successful relative to their competitors, bringing more business to the manufacturer and improving customer loyalty. We also helped a manufacturer directly reach end users to measure brand perceptions and future purchasing behavior.
Measure Customer Experience at Every Touchpoint: Most B2B organizations forget that they touch end users beyond the time of sale. Such touchpoints include delivery of spare parts, call center interactions, and repair visits. Treat each touchpoint as an opportunity to measure another customer experience. This includes customer feedback generated through social media.
Embrace Co-creation: An effective way to involve customers in co-creation of products or services is to form online customer panels or advisory councils for each product line, and then involve members in continuing two-way communications. Sir Terry Leahy, CEO of U.K.-based Tesco, one of the most customer-centric organizations in Britain, says: “The best place to find the truth is to listen to your customer. They’ll tell you what’s good about your business and what’s wrong. And if you keep listening, they’ll give you a strategy.”
Evaluate the Data Integrity of Customer Metrics: Valid customer experience data is crucial. Since the data rely on opinions and interviews, the information is subject to a range of errors, varying from disconnection with strategy and incorrect constructs to poor sampling, poor questionnaire design, response biases, and poorly designed analytics.
Design Global Programs: Customer centricity should be a part of global strategy, and the measurement system and analytics should be similar, yet account for cultural differences. For example, in deferential cultures such as India and China, expression of intent to purchase is significantly higher than actual purchase behavior, as customers do not want to degrade the product by showing low intent.
Involve Employees: Don’t forget that engaged and committed employees are key to delivering customer satisfaction. Organizations that want to become customer-centric should also be employee-centric and take steps to measure and improve employee engagement, because there is a high correlation (exceeding 85 percent) between employee engagement and customer satisfaction.
Expect High ROI: Customer centricity may seem intuitive, but it is critical to measure its effectiveness through financial performance metrics, such as revenue or net income growth. Changes in customer retention, market share, and customer lifetime value also affect ROI. Successful customer centricity initiatives should yield very high ROI, typically exceeding 100 percent. Before launching customer centricity initiatives, organizations should build an ROI model so they can accurately measure impact throughout the duration of the program.
About the Author
Pawan Singh is CEO and Chief Science Officer of PeriscopeIQ, an enterprise feedback management (EFM) provider that applies science and strategy to uncover customer, employee, and compensation intelligence. During his 25-year career, Singh has transformed lagging businesses into industry leaders through business and technical innovations.
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