Are B2B companies missing a trick when it comes to customer loyalty?
Nick Hague explains why B2B seems to be falling behind when it comes to the longevity of customer relationships.
In the complex world of B2B, too often the focus has been on driving efficiency above all else rather than looking to develop brand value and customer equity. It’s no wonder B2B marketing is often said to be the poor relation to B2C when it comes to creativity.
All brands seek legions of loyal customers who enthusiastically promote their business whether they’re in a B2B or B2C market.
If we look at the standard metric for measuring customer loyalty — the Net Promoter Score (NPS) — our global customer experience research has shown that year after year B2B companies lag their B2C counterparts significantly in this regard.
We’ve examined customer loyalty for over 1000 brands across a variety of sectors as part of our client research over the past three years. This has involved over 200,000 interviews, with the most up-to-date data showing the average NPS score is now 33, up from 24 two years ago. Loyalty is increasing, but rather slower than we might like, especially because expectations are rising in this increasingly digitised world. Too often, B2B brands are not moving sufficiently quickly.
Customer loyalty differs globally, with emerging markets scoring higher on likelihood to recommend. The highest NPS scores are to be seen in Asia and South America with scores reaching upwards of 60 (particularly in Mexico, Brazil and India). Meanwhile, in developed markets, and particularly in Canada, Belgium, France and Japan, NPS scores are — worryingly — in single figures.
The dizzying array of channels available today is part of the issue. B2B sectors arguably lag their B2C counterparts when it comes to exploiting a variety of channels, whether it’s for marketing or for delivering a service. It’s no longer is it okay to rely on email or the corporate website alone for marketing purposes. B2B brands must take ownership of the customer experience across the end-to-end funnel.
What’s more, in B2B markets we know the one driving factor behind loyal customers is how easy a company is to do business with. In other words, it’s important to limit the number of interactions needed in order to get a job done.
Too often, there are multiple sales people, working on different P&Ls and without consolidated credit control and invoicing processes in place. Innovators in the B2C space like Waze and Airbnb are using digital platforms to create superior customer experiences and therefore deeper, lasting relationships with the end consumer. B2B companies should be doing similar, especially where the sales process is drawn out and there are long consideration purchases.
It should be noted that there are cultural differences on how people score using NPS as a metric. That said, looking at loyalty by sector, our research findings this year revealed that the energy sector is still bottom of the pile in terms of customer loyalty. This may not be surprising for a commodity product, often sold without service in mind. However, in this sector, we’re seeing new start-ups, such as Octopus in the UK, who are focusing on the consumer sector first – creating a digital solution that empowers and enables the end user, before then attacking the SME market. Large corporates need to watch out.
Sometimes, the poor customer experience in B2B markets is down to the lack of investment that’s needed to implement improved service within highly complex businesses. The end result is dissatisfied customers and therefore poor customer loyalty. We need only look at what Amazon has managed to deliver in terms of convenience (and price) to see why expectations are changing, and not only within the consumer landscape. Today, people — whether or not they’re at work — have come to expect a greater level of service. It follows that large corporates need to invest in order to deliver this. While it may be true loyalty scores are largely driven by the people factor in B2B markets, it’s dangerous for B2B companies to rely on the ‘valued account manager’ because, inevitably, salespeople move on.
B2B markets are late to the party by quite some years. Usually, businesses have grown through acquisitions and mergers; driven simply by shareholders looking for short term profit returns. But now the pace of disruption in the consumer landscape is starting to catch up with large corporates.
Tech is a massive factor in all of this. Many B2B brands have legacy systems, without appropriate technological infrastructure and with archaic back office structures in operation which means it certainly isn’t a seamless journey for most B2B customers.
The ability to resolve problems quickly and to streamline processes is more acute today than it has ever been, especially where customer experience is king. If you’re looking for true customer loyalty the key is to consider the holistic brand experience and examine all touch points across the lifetime of a customer journey.