- log in
Posted by Paul Hagen on September 27, 2011
The customer experience for companies doing business with other companies stinks. Three independent studies that Forrester Research has conducted over the past year indicate that the business-to-business (B2B) experience is perceived as worse than that in the bottom-of-the-barrel consumer industries such as TV service providers and health insurance plans in Forrester’s 2011 Customer Experience Index. This is not surprising for several reasons. Many B2B firms believe that customer experience is something that only consumer-focused firms like Disney, Zappos, and Ritz Carlton need to consider. Moreover, many B2B companies argue that purchasing decisions are made for a complex set of reasons other than customer experience. Finally, they often say that because of the relatively low number of accounts, they already provide a personalized experience through account management teams.
Firms making these rationalizations miss several important points. First, if word of mouth is important to sales, then so is customer experience. Forrester’s consumer research shows that only 23% of individuals trust radio and TV ads — and only 19% trust direct mail — while 73% trust recommendations of friends and family. There is little reason to believe that the numbers are much different for B2B. And while Facebook may not amplify opinions, social media tools used for professional networking in online communities certainly do. Second, firms that have poor experiences with other firms buy less. The experience design company, Walker Information, finds that firms whose customers are trapped spend significantly less, grow more slowly, and have lower gross margins than those that are truly loyal. Forrester’s research suggests similar outcomes, with strong correlations between customer experience ratings and likelihood to purchase again, recommend, and switch. Third, customer experience is not limited to the customer-facing employees, such as account managers and call center representatives, or the contract holders at the client’s company. Rather, the end-to-end experience often includes interactions driven by back-office employees that make life difficult and frustrating for important stakeholders who could drive future business at the client firm.
Improving the B2B customer experience from its dismal state is more than a marketing effort. After all, marketing only owns a small portion of all of the interactions with customers. Companies such as John Deere, Maersk Lines, Fidelity, Philips Electronics, and Intuit understand this and as a result have significant B2B customer experience efforts under way. While in some respects the B2B experience is more complex than the business-to-consumer (B2C) environment (e.g., diverse stakeholders within a client), other issues with partners, resellers, agents, and other intermediaries that impact or even deliver the experience are very similar. In fact, the best practices that the best B2C firms use apply to B2B firms. Best practices include:
- Defining the intended experience for the target customer. As experience design firm Beyond Philosophy puts it: “To improve customer experience implies you are somewhere today and you are heading somewhere else. The strategic question is ‘where?'” To get started, firms need to define who exactly they mean by the customer . . . something all the more important for B2B companies, which have many stakeholders inside of a client. One manufacturer found that it had 26 personas across departments just to describe those maintaining purchased equipment within client firms. Some were upward of 10 years old, and all were at varying stages of development. By rationalizing these down to just a handful of well-developed personas based on behavior rather than departmental role, those redesigning the experience — a cross-functional team that included employees as diverse as engineers, contact center staff, and account managers — created a common vocabulary and target to work on. Another B2B firm, in trying to decide for which stakeholder within its client base it should prioritize, realized that concentrating on improving the experience for lower-level logistics clerks would swing much more business its way than improving the customer experience for higher-level contract managers.
- Understanding the customer perspective. The most challenging aspect to improving the customer experience is for firms to shift to outside-in thinking in which employees put themselves in customers’ shoes, rather than today’s inside-out mindset that focuses primarily on narrowly defined internal metrics. Common experience design practices, such as behavioral personas, customer journey maps, and voice of the customer (VoC) programs, can help turn this around. Export Development Canada’s customer journey map for its insurance group found more than 35 internal handoffs between departments across 14 customer touchpoints with little consistency in total time to completion. The group used journey (value stream) maps to focus project teams and Lean methodologies for aligning internal business, processes, people, and systems. The result was a 60% reduction in processing time with improved predictability, a 24% increase in Net Promoter Score (NPS), and reduced waste.
- Aiming to change the culture. Firms serious about improving the experience realize that a cultural transformation needs to take place. Key practices such as recruitment and hiring, onboarding and training, internal communications and storytelling, performance metrics, and rewards and recognition systems aimed at changing the beliefs and behavioral norms of internal employees can similarly be applied to partners, resellers, agents, and other third parties that affect the B2B customer experience.
The widely divergent range of customer experience scores that B2B firms achieve in Forrester’s studies today suggest there is a lot of room to differentiate based on customer experience. And that could translate into big dollars. In the B2C space, Forrester estimates that a 10-point increase in its Customer Experience Index score can amount to up to $1.5 billion. But changing culture isn’t easy. Those that get the jump will create something that takes time and is hard to replicate.
Search Forrester's Blogs
Planning for innovation and risk in the wake of Brexit »
Blog: Go fast or go home
Why fast is the new normal for business technology strategy »
Forrester's CX Index
Predict how actions to improve CX will affect revenue performance.
Measure the customer experiences that matter most »
- Adam Silverman (1)
- Ashutosh Sharma (1)
- Boris Evelson (1)
- David Johnson (1)
- Eveline Oehrlich (3)
- Frank Gillett (1)
- Frank Liu (1)
- Joana van den Brink-Quintanilha (1)
- Joe Galuszka (1)
- John Kindervag (1)
- Julie Ask (2)
- Kyle McNabb (1)
- Laura Koetzle (5)
- Martin Gill (1)
- Randy Heffner (1)
- Robert Stroud (2)
- Rowan Curran (3)
- Satish Meena (1)
- Sharyn Leaver (1)
- Stephanie Balaouras (2)