The secret to long-term B2B customer relationships
Hello again Everyone,
These days a lot of companies are focusing on understanding their customers’ needs so they can deliver compelling products and services which will also hopefully result in long-term profitable customer relationships. As the B2B Customer Guy, I am one of the first to agree that B2B service providers and suppliers need to really understand the needs and priorities of their business customers. In fact, I would go even further to say that as B2B marketers and strategists we need to ‘get in bed’ with our customers, whereby we have a deep and intimate understanding of their businesses and work very closely with them to help them achieve their objectives. The key question though is, who within your business customers should you be getting in bed with?
B2B companies around the globe have really started to follow the steps of their B2C counterparts by making concerted efforts to understand and respond to their customers’ needs by undertaking ‘voice of the customer’ initiatives such as conducting customer surveys, focus groups and monitoring what’s being said on social media. I applaud these organisations for really starting to recognise the importance of understanding their customers and really taking some actions to do so. Unfortunately though, many B2B companies are quite frankly missing the boat! The problem lies in the fact that most of these ‘voice of the customer’ initiatives are focused on gaining feedback from end users. End user feedback is important and extremely valuable, particularly in gaining insights for improving products, services and processes. However, as I have strongly stated in previous posts, we must always be cognisant of that distinguishing characteristic in B2B, that users and decision makers are not necessarily one and the same.
Building long-term profitable relationships with your business customers requires that you are engaging with and gaining a strong understanding of the needs of the decision makers (ie. executives) within your customers’ organisations. The harsh reality is that in B2B, purchasing decisions really only rest with a small number of people. The decision makers are the ones who make the ultimate and final decision whether or not they will go with your company as their supplier or service provider. Therefore, by engaging in strategic conversations with your customers’ executives, you will be able to understand their strategic objectives, priorities and issues. It is this type of strategic insight that is required in order for your company to understand the kinds of products, services and solutions that you need to deliver. Furthermore, this insight will enable you to communicate the business value that will make your customers regard you as a trusted advisor and partner. This will result in your customers being more loyal, spending more (and if you are lucky, exclusively from you) and generating lots of referrals and recommendations on your company’s behalf.
An effective means of engaging with your business customers is to establish executive customer engagement programs. These programs enable executives from selected customers to speak directly (face to face) with your leadership team as to how your company can add value to their businesses. One type of executive engagement initiative are executive customer advisory councils. The council is comprised of your company’s executive leadership team and executives from selected customers. They meet once or twice a year to discuss key issues and developments within their companies, markets and industries. These advisory council meetings are then followed up and supported by other engagement forums and project initiatives. This approach has been adopted worldwide across a range of industries including technology, media and professional services. A leading technology company called VMware tripled its sales to $3 billion by 2010, attributing its success in large part to its executive customer engagement.
Now I am not suggesting that your company needs to ‘hop in bed’ with all of its customers. As B2B companies, most of you will be in the situation where the bulk of your company’s revenues are generated by a relatively small number of customers. These are the customers you should be looking at to engage with strategically at the executive level. So take a look at your customer base and closely examine those key customers that either account for the majority of your firm’s revenues or are of strategic importance to your company. Determine which ones you may be able to engage in strategic dialogue and commence planning for your first strategic executive customer engagement. Also remember, it is not enough simply to gather their feedback. You need to make sure it is shared and used within your company. Therefore, make sure you have set up processes and systems to share and use this feedback in your company’s decision making and planning.
So go on… get out there and ‘get in bed’ with your customers. Just make sure it is with the decision makers from the right customers.
Until next time,
Your B2B Customer Guy