B2B customer relationships are complicated: Long buying cycles, multiple stakeholders to please, high-ticket prices in danger of budget cuts, etc. And furthermore, not all customers are created equal. Let’s look at an example1:
B2C giant Amazon has a revenue of $19 Billion. GE Aviation (B2B) is about the same size, with $17 Billion in revenue. The difference: Amazon has 88 Million clients, GE Aviation 500. When we dig deeper, we uncover that 80% of Amazon’s revenue is represented by 18 Million customers. For GE Aviation, this same group only has 50 customers. The implication is that losing one customer can mean losing well over $20 Million. So clearly, one customer for GE Aviation is more valuable than one Amazon customer.
Zooming in on the 500 customers individually: GE has relationships with multiple stakeholders within every account and each relationship being different from the next. Generally, there are three levels that have different requirements and needs:
- End user level: Using your service or product on a regular basis.
- Influencer level: Evaluating purchases and advising decision makers.
- Decision maker level: Signing off on the contract and having the ultimate say.
To make matters more complicated, there can be any number of stakeholders at each of the different levels within each account. Compare that to Joe the consumer who wants to buy a new watch. He simply goes to the store and buys it. And that’s it. No one else is involved.
In B2B, however, all these stakeholders have some level of influence. And everyone's needs need to be met. But some people’s requirements are more important, as the key influencers decide to pull the plug or not.
Why customer feedback works
The first reason a well executed customer feedback program is so effective in a B2B environment, is because it helps in understanding all the pieces and levels in this complicated decision-making process. A good grasp of each stakeholder’s needs and priorities is a prerequisite for a good relationship. And customer feedback helps refine that understanding in the long run.
Furthermore, a B2B customer is more invested in you and relies on you to offer value. Hence, it’s beneficial for him to give you input to up your game. Lastly, with your relationship being long term in nature, following up and “closing the loop” will have a huge impact. It will result in relationships that last longer and add more to the bottom line.
But you have to be careful.
Voice of the ...
Let’s assume that you have a well set-up customer feedback program and you attain a 55% response rate. Great, right? Well, don’t pat yourself on the back just yet, because the feedback might not necessarily give you a representative view of the situation, even at response rates this high.
Without the right vision, you could end up in a situation where you’re baffled that your Net Promoter Score goes up, while your retention rates plummet. And it all starts with the distribution of responses.
Example 1 shows a typical distribution of responses for the average company:
[caption id="attachment_14152" align="aligncenter" width="700"] Example 1: Distribution of responses[/caption]
As you can see, the vast majority of responses come from the user level. So effectively, you’re running a Voice of the User program. Granted, there are always more users than decision makers in an account. But the danger is in assuming that you have a representative view, while in reality you’re blindly relying on incomplete information.
The best approach starts with dialing in three elements. First, don’t just aggregate your response rates from the different levels. Each level influences the relationship in a different way, so it’s wise to handle the different levels as silos that intertwine. And because it’s so important to know what’s going on at every level, you can even group feedback from different levels to analyze further.
Second, calculate the response rates for every level separately. This means putting the number of contacts you have at every level against the number of responses for that level. Especially for the influencers and decision makers you want to aim for a response rate well over 50%.
Lastly, do the same for individual accounts and make sure that a fair percentage of contacts at every level provide you feedback. As will be touched on later, this should serve as a basis for knowing who you need to reach out to.
The need for mapping your customer accounts
Since your customer relationships in B2B are more complicated, it becomes all the more important to have a good outline of the structure within the different accounts. Even if you have a good relationship with your customer, you’d be surprised how often you don’t have the full picture of all the stakeholders involved. So an emphasis should be put on finding the key influencers within your accounts.
To get started, you can do an 80/20 analysis to identify key accounts. Then looking at those accounts in your CRM system (Salesforce, Microsoft Dynamics, etc.), try to answer the following questions:
- How many people are you in touch with?
- From those people, how many are at the user, influencer or decision maker level?
- Is that distribution skewed in your advantage or disadvantage?
- Do you know who the key influencers are?
- When was the last time you were in touch?
- When is the next meeting planned?
Who takes the front seat?
Your front-line account managers or customer success team are charged with protecting and expanding your accounts. And ultimately, that’s the goal of your Voice of the Customer program too - decreasing churn and/or increasing sales. And since they are the ones in touch with your customers, they play a big role in mapping out the accounts.
Once your accounts have been mapped, account managers should focus on building the right relationships with the right decision makers or key influencers. Also, they should be responsible for chasing your DM’s and influencers to skew the response rates in your favor.
Tips to encourage cooperation
Without the full cooperation and commitment of your account managers/customer success team, your Voice of the Customer project will run out of gas soon. But there are a couple of things you can do:
- Since they’re driving the program on an account level, make their job easier. Ask what they need to make their job easier. Whether it’s email templates, phone scripts or prioritization lists, help will go a long way.
- Directly sharing feedback with them will reinforce a job well done by the account manager and reconfirm the value of your service in the minds of your frontline.
- Alternatively, it helps them to better understand the full picture of where you need to step up your game.
- A well-executed VoC program will lead to higher retention rates. This ties directly back to the account manger’s goals, so understanding that makes it a no-brainer for them.
- Increase buy-in by asking them for suggestions on how to improve the program.
This blogpost was inspired by a free excerpt of the B2B Executive Playbook, by Sean Geehan. You can check out the excerpt here. I would also recommend buying the book if you want to learn more about success in a B2B environment.