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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:
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.
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