Why are B2B firms rarely cited as CX innovators? We look at the challenges for B2Bs, why COVID-19 is driving investment, and how to become a leader.
The rewards of investing in customer experience (CX) are significant. According to Acrolinx, 74% of business buyers will pay more for great experiences and CX leaders show 30% greater retention rates. Brands that don’t prioritize CX leave money on the table. How much money? US businesses lose an astounding $62 billion per year due to poor customer experiences.
Not surprisingly, the push to achieve customer-centricity has been led by the usual suspects of digital innovation—Amazon, Netflix, Google, and Airbnb to name just a few—who have used the power of computing and access to digital technology to drive more information, more choice, and more power to consumers. In response, consumer spend has increased, along with share of wallet and shareholder value. It’s the ultimate win-win for consumers and for shareholders.
How can B2B firms catch up?
How COVID-19 and rising demand created a perfect storm
There are two primary forces driving customer-led digital innovation for B2Bs and pushing executives to adapt quickly. The first force is a rise in customer demand for seamless and effortless experiences. The B2B customer mindset—historically understanding of long, complex negotiating and buying cycles—is shifting toward a need for instant satisfaction, digital tools, and data-driven solutions. The second is COVID-19. The global pandemic forced companies to digitize, upending traditional B2B business models, accelerating the need for digital solutions, and further intensifying customer demand.
B2B customers now expect better experiences. The people binge-watching curated Netflix content or expecting next-day deliveries from Amazon are the same ones buying machines, negotiating price books, and nurturing C-suite relationships. Even before the pandemic, research showed that 82% of buyers anticipated the same high-quality experiences they encountered in their personal lives, and 69% of buyers expected “Amazon-like” experiences. In B2B, 89% expected companies to understand their unique needs and expectations, and 67% were prepared to switch vendors for better, more consumer-like experiences.
What makes these “Amazon-like” experiences special? It boils down to knowing the customer, anticipating their needs, and using data to deliver unexpected satisfaction. This shift in behavior is alarming for B2Bs, who often struggle with customer data acquisition and management.
Where Blockbuster once fell to Netflix and the taxi industry was bludgeoned by ride-sharing apps, so too B2B companies will fall if they don’t meet the demand for engaging experiences.
And don’t forget that COVID-19 further accelerated this change. The historically offline B2B buying cycle became digitized and customer-centric literally overnight. B2Bs had to reconsider the entire buying funnel. Gone are the days, for now at least, of industry conferences, steak dinners, and golf outings. They’ve been replaced with Zoom meetings and online interactions. Old-school, relationship-based, pipeline-building tactics are being usurped by targeted, intelligent lead scoring and prediction methodologies supported by proactive, personalized marketing tactics. Passive marketing and sales relationships have shifted to actively nurtured existing accounts and proactively identified new ones. Many companies were caught on the back foot, creating a differentiating opportunity for those able to switch to digital-led, CX-driven sales engines.
The people binge-watching curated Netflix content or expecting next-day deliveries from Amazon are the same ones buying machines, negotiating price books, and nurturing C-suite relationships.
The five key challenges to building a B2B customer experience
While the driving forces behind demand for CX and digital innovation may be clear, it doesn’t make executing on the demand any easier. We know B2Bs often struggle to adapt. But why? The answer is simple: building a leading B2B CX is difficult because the traditional B2B model is complex. Let’s look at five areas that contribute to this complexity:
- Complex journey: The B2B buyer journey is difficult to navigate. There are multiple stakeholders on the customer’s side, each with different (and possibly opposing) motivations, incentives, and emotions.
- Varying definitions of the customer: The B2B “customer” may take many forms. Are they a buyer, a distributor, or the end consumer?
- Lack of historic data: The historically offline sales and buying cycle creates inefficiencies in the customer data feedback loop.
- Decentralized ownership: Ownership of the customer tends to be spread across multiple lines of business, each of which may have competing motivations and may not want to fund customer investments.
- Primacy of the sales channel: Intrinsic inertia to change is amplified in B2B organizations where sales teams hold customer relationships close to their chests.
Where to start
CX leaders start by defining their vision for customer experience. A CX vision isn’t one-size-fits-all and it should be unique, aligned with the values of the business, and supportive of customer desire. The vision is driven from the top but should also receive cross-functional buy-in. We recommend engaging all internal stakeholders across the buyer journey in your visioning discussions. Buy-in is essential to program adoption.
The vision will be the basis for your CX strategy. We recommend developing the strategy across four pillars: customer needs, financial needs, business operation needs, and people needs
Keep the focus on your customers
When building your strategy, it’s critical to start from an “outside-in” perspective. That means beginning with your customers and finding ways to deeply understand their needs, desires, pains, and opportunity areas. This is best done using a research-based approach. Interview your customers, and, where possible, observe their daily interactions. What’s important for their success? What do your competitors do better than you?
Next, look inside your organization. How are your frontline stakeholders impacted? What do they hear from customers? What are their challenge areas? Understanding how your teams work, how they interact with customers, what systems they use, and where their pain points are will be important when it comes to formulating a strategic plan. Do you have the right processes in place? The right people and teams? The right technology to support those teams? The answer is likely both yes and no, and it’s essential to determine the impact of those “nos.”
When you have that research, you’ll have the tools and evidence you need to redesign your customer journey.
The B2B buyer journey is evolving from linear and sales-driven to a cyclical one where marketing and service drives the most business value. According to Forrester, the typical B2B buyer might be anywhere from 66%–90% of their way through a purchase decision before they reach out to a vendor. CX leaders follow their customers across the entire journey. They actively nurture new and existing accounts. They predict new opportunities and potential churn.
Your “outside-in” research should drive investment decisions in technology, which may take different forms based on the needs of your customers and business. Common needs and solutions include:
- Understand and centralize customer data to drive actionable insights, reporting, and better business decisions: Customer 360.
- Track online, digital web behavior to understand how customers engage with your web and mobile properties: Digital experience analytics.
- Create personalized, cross-channel engagement: Marketing automation.
Ultimately, most companies need a little help across all areas of the purchase funnel. When planning the execution of your strategy, a value-to-effort based roadmap is your best friend.
Building your roadmap . . . and beyond
Now you’ve developed a customer-led experience strategy. The value is clear, but both effort and impact can be frightening. A roadmap helps to sort through the chaos. As with the vision and strategy, we recommend building it collaboratively and involving key stakeholders from business units and IT. Together, identify projects and create a matrix of value and effort. Assign project owners. Keep the roadmap incremental. What quick wins can you punch out immediately to demonstrate value? What do you want to achieve in the first 100 days? This year? Next year? Importantly, don’t be afraid to adapt the plan to business conditions. Creating momentum from the start is critical.
Yes, the lines between B2C and B2B have blurred. The way businesses interact with their customers has evolved as market conditions and external forces drive change. But some things remain the same. The customer is and has always been the critical differentiator.