MANAGING
B2B
CUSTOMER
LOYALTY
Today’s competitive markets require a well defined Customer Experience (CX) strategy. The 3 important steps to have a
well defined CX strategy are
A customer-focused culture starts
with leadership. It is important for
leaders at all levels- CEO,
Managers, Teams leaders to insist
& consider the customer voice to
improve performance in daily tasks
LEADERSHIP
Organizations need to put in place
formal well developed mechanisms
and processes to measure &
leverage feedback of customers
MEASUREMENT
Without action nothing gets done.
Customer-focused companies drive
action with training, technology and
follow-up systems
ACTION
Hence, in a business to business client scenario, proactive follow up on feedback from customers is an important tool for
managing customer relationships and crucial to managing clients who may be ‘at risk’. This information is critical to plan
strategies to retain and grow existing customer relationships
© CSMM 2015, Confidential & Proprietary
CUSTOMER
EXPECTATIONS
Customers know more , expect more and their expectations are changing
rapidly. Along with customer experience, one also needs to understand
customer expectations and what impacts customer retention in order to
design / upgrade the CX strategy.
In a B2B scenario, customer retention is driven primarily by an organization’s
reputation and image along with actual experience that the customer has in
terms of Product Quality , Relationship Management , Ordering /
implementation and delivery /execution as per timelines . While, one would
expect ‘Price’ to play an important role in retention, however it is not the
primary driver of B2B Customer Loyalty.
Reputation
parameters
(Market)
Average
Benchmark
*
Ethical , Trustworthy
82%
Customer Oriented
71%
Innovation
67%
% of customers who Strongly / agree with these
perceptions about their supplier
When we talk about ‘Reputation & image ‘ , it no longer is restricted to aspects like being
‘Trustworthy’ ; ‘Ethical ‘ or being perceived as ‘Customer Oriented’. Our work shows that in the recent
past, being perceived as ‘Innovative’ has been gaining importance. Customer expect ‘Innovation’.
Customers want their suppliers / vendors to be Innovative and use technology not only to create product differentiation
and save costs, but also to improve customer interaction and experiences like placing orders, tracking delivery , invoice
generation etc. Companies that decode and deliver on these aspects will be the ones most likely to create a favorable
opinion and earn the loyalty of their customers.
Yes, many companies have already migrated or are in the process of shifting to automated / online processes for Ordering,
Tracking , Delivery updates, Complaint registration etc . However , more often than not the transition is hurdled with
difficulties . Our work with one of our clients revealed lack of customer education and communication on how to use the
new technology tool as the leading cause of failure to migrate its customers on to the new technology tool. For another
client, the root cause of failure turned out to be browser compatibility issues .
‘Communication’ is an underlying expectation across most customer interactions.
If managed well, it can greatly contribute to enhancing all aspects of customer
experience. Escalations due to lack of timely communication about price
revisions or lack of communication about delays are common scenarios that one
gets to see in our area of work . These are manageable and even avoidable with a
well defined communication process in place.
‘Complaint management ‘is another area, which is a key customer expectation
and is usually the #1 driver of Customer Dissatisfaction. Setting up escalation
methods to assure customer issues are promptly addressed is critical. Our
experience shows that organizations need to gear up in not only tracking but also
assimilating complaints from multiple sources like online portal, websites,
emails, channel partners, account managers, to manage and resolve issues.
COMMUNICATION
Delivery Timelines , Resolution
of issues
Product Updates , Price
changes
Delays in delivery
Changes in processes
Changes in POC / Account
Manager
© CSMM 2015, Confidential & Proprietary
CUSTOMER
EXPERIENCES &
LOYALTY
CSMM normative benchmark data, reveal some interesting findings .
Only about half of the Customers seem to happy with the
Overall Experience in terms of products and services that they
receive
In this B2B situation, where relationship building is a key tool
for managing customer retention, only about half of the
customers were found to be happy with the relationship
building process in place
Of the customers, who had complained – less than a third
were happy with the complaint management process in place
Customer Ratings On
Key Metrics
(Market)
Average
Benchmark *
Overall Experience in
terms of products and
services
53%
Relationship Building
51%
Complaint Management
29%
% of customers who gave a positive rating on a 5 point scale
+
ATTITUDE
ACCESSIBLE
7%
59%
AT RISK /
HIGH RISK
 The Trapped proportion of B2B customers was found to be relatively
high, with close to 20% trapped in the business relationship. This
20% , is in addition to the 15% who are ‘At Risk "of exiting the
relationship
TRAPPED
19%
15%
-
 Basis the CSMM normative database, it was found that on an
average less than 60% of customers were ‘Truly loyal’ to their
Supplier
TRULY LOYAL
BEHAVIOUR
+
Data source - CSMM normative benchmark data
Segmentation of Customers is a critical analysis for better actionability . Goal of every organization should be to
reduce the % of ‘At Risk’ customers by identifying the triggers for them. These Customers are likely to spend
significantly less and do less business with you –thus, likely to impact business negatively. One can look at this
segmentation by Customer Type, Product Type, Location for more constructive and customized action.
Customer experiences & perceptions translate into loyalty. Poor customer experiences will translate to poor
perception and ultimately impact loyalty negatively and vice-versa . Our Customer Loyalty measurement programmes
, help organizations understand how loyal their customers are, what experiences have the most influence on customer
loyalty, how they perform in a variety of customer experiences areas, how they stack up against the competition.
© CSMM 2015, Confidential & Proprietary