The key to winning and keeping business-to-business customers

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BRENDA STEWART of Cape Consulting explains why finding out what keeps your customers happy can increase your business by as much as 50 percent.

Reliable industry research suggests that the way to win and retain business-to-business (B2B) customers in todays highly competitive marketplaces is to give them quality service delivered with passion rather than focus excessively on price.

Other research suggests that B2B organisations can regularly expect to win as much as 50 percent more business from existing customers if they devote themselves to understanding what these customers really want.

Organisations that sell to consumers spend millions of pounds every year finding out what consumers think of their products and services and identifying what will motivate consumers to buy more. B2B organisations, on the other hand, rarely take as much trouble to find out what their customers think of them, even though B2B contracts are often high value. It seems that B2B suppliers often believe they have an innate and reliable knowledge of what their customers think of them. The evidence, however, suggests that in many cases they dont.

Recent research published by TARP - a consultancy that specialises in measuring customer satisfaction - reveals that regardless of the contract size, around 25 percent of B2B customers in the UK say they would not complain to their supplier about poor service.

This finding is confirmed by our own research at Cape Consulting. Most business customers we have interviewed say that while they will discuss operational failures with suppliers, they are less comfortable giving feedback about relationship management.

The need to maintain a working relationship prevents them revealing the true strength of their feelings. There is, therefore, a serious danger that the first time a B2B supplier knows that a particular customer is unhappy is when the business goes to a competitor.

Its an established fact that in a typical B2B organisation, about 80 percent of business comes from about 20 percent of customers. This being so, a B2B supplier runs the risk of losing significant turnover if one of its major customers decides to move to a competitor. So there should be no debate - you should invest time in understanding exactly why your major customers buy from you and what you can do further to satisfy them.

Cape Consulting set out to investigate B2B organisations views on their suppliers. The key finding - that B2B suppliers can increase their revenue from that customer by as much as 50 percent - stems from that research.

All the senior executives we interviewed said that suppliers who delivered what they promised and managed relationships effectively could win significant new business from their organisation. Only a few valued that additional opportunity at less than 25 percent of what they were currently spending. Our research also found that that, far from awarding contracts just on price, most organisations are willing to pay a price premium to keep on working with B2B suppliers whom they perceive as really caring about their business.

When a B2B supplier loses a major customer, it frequently makes excuses about the reasons, often persuading itself that the account was only lost because a competitor offered a better financial deal.

If you are ever tempted to make this assumption, ask yourself this question: does your company move vital contracts, supplied by excellent organisations with which you have strong, long-term, mutually beneficial relationships, only on price? If your reply is of course not, then ask yourself this: why would your customers do it?

One senior executive of a major UK insurer, discussing this point with me soon after ending a relationship with a major supplier, said: Our supplier will have told themselves they lost the deal on grounds of price, but in fact they made no effort to develop relationships around the company. They started out with all the advantages of brand, product range and being the incumbent relationship. If they had lived up to their original promise we would have happily paid a bit more - but for the sub-standard service we received we might as well save some money and take a risk on someone new.

So often it seems that a supplier/customer relationship that starts out with great enthusiasm on both sides simply goes stale. Why does this happen?

Perhaps it is because most people tend to find new relationships and new situations more exciting than existing or old ones? The challenge of winning business, the satisfaction of beating competitors is undoubtedly good for the ego. No wonder we pay great attention to making the sale and getting the relationship off the ground.

Whether or not you agree, theres no doubt that a huge amount of time, effort and personal pride goes into winning a big contract. Suppliers present their best features, like eager suitors on a date. They make commitments about delivery, put their best people on the project, make it clear they see the deal as a partnership.

Once the contract is won, the customer is pleased it has found the right people for the job; the supplier heaves a sigh of relief and top-team attention turns to where the next big contract is coming from. As the marketing director of one of the countrys best known charities told me: Its like a marriage. When they want your business they flirt with you, they offer ideas and excitement, we really believe we are going places together, but once theyve won, all the sparkle and enthusiasm wanes and we are left wondering whether we chose the right partner after all.

The difficulty for most suppliers is that delivering what has been promised demands a different mindset from the heady romantic phase of the actual winning of the business, just as a successful long-term marriage demands a different mindset from the early days of dating and courtship.

But what the new customer really wants is to feel that it is getting access at all times to the same calibre of people who sold it the service: people who really want to understand the customers business and can spot opportunities to grow it, people who can bring new ideas to the table in short people who can add value. And thats how opportunities arise for the supplier to win more business from the customer.

For a supplier, finding out what matters most to its most important business customers is not an add-on; it should be something a supplier does as a matter of course. At Cape Consulting we have found that even the most senior people in a customer organisation will willingly give their time to providing feedback if they think it will improve existing relationships and ultimately help them grow their business. Customers genuinely like being asked. Individuals stake their own reputation on the deals they do with you. They need you to deliver; they want the relationship to work.

So what positive steps can you take to develop lasting relationships that will create business opportunities for you and your customers?

Never forget you are the supplier: They treat me as though I have a dotted-line responsibility to send them money, a managing director of a financial services company told me recently, explaining why he had decided to put out to tender a sizeable contract that he would have in principle been happy to keep with the incumbent. Corporate arrogance is one of the biggest failings to which suppliers are prone. Big-brand suppliers too often forget that they are just that: suppliers. The value of the contract may be high, but that doesnt automatically turn the supplier relationship into a partnership. Imposing your processes on your customers, changing the account team without telling them, withdrawing agreed services with no negotiation, cancelling meetings at short or no notice are all examples of common ways in which suppliers disappoint customers and ultimately let them down.

Make sure your customers feel valued: Remember they bought from you because they liked what you had to offer. They liked the people they met, so make sure the top teams stay in touch. Block out time in your diary, sit down and make contact. You may be the most important person in your company but you are not more important than your customers. There may be occasions when internal issues or other meetings seem more pressing, but keep cancellations to the minimum. Follow up problems personally and make it clear to everyone in your company that existing customers are your best opportunity for business growth. By the way, dont make the mistake of thinking (and many suppliers do) that corporate hospitality is a substitute for a business meeting where the nitty-gritty aspects of your relationship with your customer get attended to and the customers problems solved. Corporate hospitality is one thing; business meetings something else.

Deliver what you promised and keep on delivering it: B2B relationships are normally based around service agreements so theres really no excuse for failing to deliver the standard you committed to. If operational problems crop up, dont keep quiet and hope they wont notice, inform your customers in good time - then they have a chance to manage the impact of the problem on their reputation and business.

Get to know your customers people: Even though your B2B relationship may be focused around only a small number of people at your customers organisation, get to know as many people there as you can. There may be other business opportunities around, so ask for introductions. Take the time to meet front-line people, very often they have the best ideas about how service can be improved and you will demonstrate you genuinely want to know how the business works.

Make sure your customers are the first to know: Any change in your organisation that is going to affect your customers needs to be communicated before the grapevine gets to work. Customers feel valued if you make sure they are kept informed. Remember also that a common complaint from B2B customers is that the people who look after their account change too frequently. Make sure theres a range of contacts in place, so that one or two people moving wont have so much impact. Think through the effect of organisational changes, and if you are convinced the changes will be positive, sell the benefits.

Continue to flirt with your customers both new and old: The secret of keeping your customers happy is to continue paying them attention. Flirt with them in a business sense. Dont just concentrate on the day-to-day; make time for blue sky conversations; you never know where they might lead. Really get to know your customers business, find out what they want to achieve, identify where you can help - and say what more you can do. If they dont know what more you have to offer they may start looking around for other suppliers for things you could have done.

Take the trouble and time to research how your customers think of you: Its an unfortunate truth that in a B2B situation the way you are treating one customer is likely to be the way you are treating all of them. So find out what your customers think of your organisation and the way it does business.

Never leave a vacuum: If you are not a full partner in the relationship, someone else will step in and fill the gap. No matter how long you have been working with a customer, be aware that your competitors will be putting their top people in front of your customer, theyll be making creative proposals and promising an exciting future together, in the same way you did when you really wanted the business.

Dont let the honeymoon end: If the relationship works well, your customer wont want to part with you, and theyll invite you do work with them more, not less.

Brenda Stewart is a senior executive with Cape Consulting, a consultancy dedicated to assisting client organisations to effect major improvements in the quality of their customer service without adding capital costs.

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