The state of marketing for B2B companies is changing rapidly as the age of the customer takes precedence over price competition. Now, as with B2C marketing, rising expectations relating to responsiveness and ease of doing business look to permanently alter how B2B companies interact with buyers.
For many years, customer loyalty and engagement has been an outcome of inertia – suppliers assume that it would be too much of a hassle for customers to change provider, especially if they were offering a competitive price. So fears of customer switching were traditionally small, and B2B marketers became complacent, placing too much credence in the notion that their customers will abide by the principle “the devil you know is better than the one you don’t”.
But recently, a McKinsey & Company survey reported on how this archaic idea of marketing was changing. McKinsey’s research found that price was become far less important to B2B customers. In fact, while many respondents consciously articulated that price and product were top priorities, with deeper analysis of their behaviour, service features and the overall sales experience were what was soliciting customer loyalty.
Nowadays, it seems that B2B marketers are catching up to the changing customers. Recent research from B2B Marketing and The Telemarketing Company revealed that 22% of the 150 B2B marketers surveyed stated that customer engagement is their number one priority for achieving marketing objectives, and a further 59% named it one of their top priorities.
Business customers are looking for good service and sales rather than a hands-off relationship. Revitalising marketing in the B2B setting.
Another article from McKinsey explored how the customer experience can be improved in a B2B setting. The article explained that while it is common practice for B2C organisations to adopt a customer focus, utilising consumer behaviour theories and working hard to provide a more-than-satisfactory experience, it is not so common for B2B. While it is not unheard of, it certainly does not go amiss as those who have placed the customer in the centre stage have developed a competitive advantage.
According to the survey of just less than 150 B2B marketers, Cicero Group and B2B Marketing found that a marked 37% of B2B marketers viewed marketing as a cost rather than a value-adding investment. It is in the way marketing is perceived by the B2B sector that may be its biggest impediment. For if players do not adapt to the age of the customer, explained Cicero Managing Director Danny Turnbull, it may stunt the industry’s evolution.
“I hope that as an industry we can meet the challenge to balance the need for short-term, easy-to-measure response with a more holistic approach to building business brands and to put marketing where it belongs – at the heart of organisation strategy,” he said.
B2B customers are still focussed more on acquiring new customers than retaining existing ones, according to Forrester Research. But this could be a major mistake. Consider that B2C businesses generally score between 65% and 85% in customer experience indices, suggested McKinsey. But B2B International explains that if you want to be certain that customers will stay loyal, you need to be scoring in the 90s or at least in the 80s.
Albeit, B2Bs are more likely to be scoring less than 50%, suggests McKinsey.
This level of complacency in a customer relationship does not correspond to rising expectations and requirements, so it is certainly cause for concern.
Adopting some loyalty initiatives usually used for B2C marketing can help you both augment your service offering and provide a tangible reason for your customers to continue returning. But how should you go about this?
B2B companies should be putting customer loyalty at the top of their list by selecting the best engagement program. .
An in-depth paper published by Forrester Research in 2015 considered how B2B loyalty can be achieved by applying tools and strategy more pertinent to B2C marketing. The study presented a road map and recommended what B2B programs were most appropriate for different business models, summarised below.
If you rely more on dealers and distribution partners to sell your products or services, then a channel incentive program is most suitable to ensure that those actually delivering your products or services to customers have a reason to prioritise your offerings above competitors.
But if you have a direct relationship with those who use your products or services, and most of your transactions are not major decisions, a cash-based incentive initiative, just like regular B2C customer loyalty programs, will likely help you retain customers and engage them.
What if your customers are on a subscription model? You may think that this payment structure is conducive to loyalty alone, but it is not necessarily. In situations like this, taking an engagement-based approach to a customer loyalty program will be fruitful. You want to reward other behaviours that are not necessarily related to purchases. These could be referrals or recommendations, but they need to directly relate to your business objectives.