Aug 05, 2020

Why Good Customer Experience is an Important B2B Growth Strategy

The topic of customer experience (CX) tends to be associated more with B2C strategy versus B2B strategy, with average B2B customer experience index ratings typically lagging behind B2C (less than 50% versus 65 to 85%, respectively), according to McKinsey.

Improving the B2B customer experience increases loyalty and trust, which positively impacts growth. Customer experience, once an overlooked growth strategy for B2B companies, is now—rightfully—at the forefront of many B2B growth initiatives. 

There are good reasons for this, one of them being that B2B customers, trained by their B2C experiences with e-retailers like Amazon and Zappos, have come to expect a certain level of seamless customer support and convenience. 

In this post we’ll address how delivering good B2B CX can be a powerful growth strategy at a time when competition is fierce, budgets are tight, and the future of many businesses remains uncertain.

The challenges with B2B customer experience

Focusing on B2B CX as a growth strategy is challenging because the B2B customer is not just one person, but a series of people from different departments that may include marketing, sales, customer service, executive, and IT. Also, for CX to drive growth, companies must tie their CX activities to specific revenue goals, and this requires measurement.

A 2018 CustomerGauge survey found that to successfully leverage CX for growth, companies must perform three key activities associated with the Net Promoter System (NPS), a management tool used to gauge the loyalty of customer relationships. 

They are: measure customer loyalty, act quickly to close the loop on detractors, and link NPS to growth elements such as revenue, retention, referral value and up/cross sells.

Source: CustomerGauge

Companies that want to improve CX for their customers should start by measuring customer feedback using relationship and transactional surveys. The CustomerGauge survey found that businesses who used both survey types had an almost 5% increase in retention rate. 

Email was the most popular channel for soliciting customer feedback in 2018, with 73% or respondents indicating they used email, up from 71% in 2016. The second most popular method was via phone surveys, followed by website surveys. The following chart from the CustomerGauge survey compares various survey solicitation methods in 2016 versus 2018.

Source: CustomerGauge

Surveys are a great way to identify the key detractors in your organization. Once you do that, the next step is to act to resolve them. That requires a comprehensive CX strategy.

Successful B2B Customer Experience strategies

Each sector within an organization has its own needs and priorities. To address these needs appropriately, it’s important to maintain consistency with communication and support to your customers. An ad hoc approach to solving customer issues and detractors simply isn’t enough. Your comprehensive customer experience approach must take the following elements into consideration:

  • Strategy is important: An Accenture survey of over 1300 executives found only 20% of the B2B companies interviewed were “masters” at CX. What sets them apart from the other 80%? In a word: strategy. Taking the time to develop a B2B CX strategy helped CX masters achieve 2X the return on their CX investments.
  • An Omni-channel approach is essential: The Accenture survey found that the companies who achieve the best growth results with their B2B CX strategy, do so because their CX initiatives are broad and touch on many different sectors of the organization including account management, quote/order management, solution shaping, preventative maintenance, and more.
  • Good CX is a competitive advantage: The highest-performing organizations look at CX as a competitive strategy. The Accenture survey found that 86% of CX leaders understood that their customers were open to doing business with emerging market entrants due to their ability to deliver a better customer experience, which helped justify investing in their own CX improvements.
  • Technology is critical: Of the CX leaders in the Accenture survey, 85% understood the importance of technology in helping to meet customer expectations. These masters were more apt to embrace robotics and AI to manage the interactions they have with customers and channel partners.

Tech tip: A customer identity and access management (CIAM) platform is software that maintains CX consistency for organizations. CIAMs enable organizations to manage customer profiles and identities and control customer access to applications and services. CIAMs like Okta, a cloud-based platform, offer a range of features focused on improving customer service. These include (but are not limited to), single sign-on capabilities, protection against data breaches, consolidating domains into a single point of entry and more.

Who’s doing it right? Microsoft!

Microsoft used the Net Promoter System approach to help eliminate communication barriers that prevented them from distributing customer feedback for Microsoft 365 to the appropriate departments. Specifically, they implemented the following changes:

  • They moved from quarterly reporting of issues to daily, real-time reporting. 
  • They established cross-organizational leadership support to ensure customer insights were acted upon.
  • They created a specialized NPS team that was responsible for measuring, analyzing, and sharing customer feedback results with relevant departments.
  • They shared customer feedback issues across the entire company, combining insights from both business and consumer markets.

Microsoft’s approach doesn’t have to be limited to the technology sector. All organizations can learn from their deliberate, company wide initiative to make addressing customer concerns a priority. 

Parting thoughts on delivering good CX

The CustomerGauge survey found that CX leaders addressed the issue of customer satisfaction as a priority, not an afterthought. Companies that don’t prioritize CX can expect to see their churn rate increase by 2% or more. 

It’s also important to understand your retention rate (fully 32% of senior managers in the CustomerGauge survey didn’t know this essential statistic). Understanding the level of churn and retention is a great motivator when it comes to investing in and prioritizing CX.

Finally, as with any initiative, it’s important to monitor and track results in an ongoing way so that your CX approach can be revised and adjusted based on actual results. Tying investments in software, resources, and talent to specific revenue goals is the best way to measure the ROI on your CX investments. B2B customers have come to expect good service, communication, and consistency from their vendors. It’s your job to make sure they get it.

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