The Surprising Key to B2B Customer Loyalty
Customer loyalty was once thought of as a concept that only applied to retail or consumer goods organizations. But with the rapid commoditization of B2B products and an ever-present focus on low price, B2B companies are finding they must spend more time cultivating loyalty with clients. Seems obvious, right? Then why are so many companies not doing more about it?
The reasons are many, but the underlying issue is that loyalty has become a tough nut to crack. In a recent survey by Bain & Company of 290 executives in B2B industries throughout 11 countries, 68 percent of respondents said customers are less loyal than they used to be. The challenge of building loyal customers is compounded by the structure of B2B industries—complicated channel structures, concentrated buyer communities, and large accounts with many people pulling the customer in different directions. Unless we change internal structures and turn to market strategies that make it easy for our customers to do business with us, we can't expect them to remain loyal.
Most B2B customers have defined the experience they expect from your company long before your business has a chance to start building it. Basic expectations include delivering on commitments (on time and as promised), using business terms that make sense, and minimizing friction with your company. Quite simply, they expect you to be easy to do business with.
How easy is your company to do business with?
For many companies, the quick answer would be "easy." But hold on, not so fast. Most companies think they have created customer-centric structures and commercial strategies, but B2B customers are reporting just the opposite. As it turns out, "easy," while fundamental to gaining loyalty, is not so easy after all.
Just look at the number of interactions your company has during the average customer life cycle. I'll bet the numbers are staggering. Most companies I work with estimate that 10 to 20 different people engage each individual customer...but likely that is not even close.
An analytics client recently began trying to measure this very thing. The client found that on average, it has 12 different salespeople engaging clients. All are focused on individual sales goals for the products they sell and all are compensated differently on these products and services. As such, everyone engages clients with his/her own unique agenda and value proposition in mind. Confusing? Absolutely. Internal processes compound this problem exponentially. When looking at the number of interactions with clients, this company was at 243 and climbing! To make matters worse, they discovered that they invoice clients (a lot) for purchases of 25 cents. Yes, 25 cents.
See how quickly this can escalate out of control?
According to a recent Loyalty Marketing study, 80 percent of company owners and business executives believe their company is providing
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