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2020 / 2021 Edition

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A Passion For Service

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Business & Finance

The key to winning and keeping business-to-business customers. Brenda Stewart of Cape Consulting explains why finding out what keeps your customers happy can increase your business by as much as fifty percent

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

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

Organizations that sell to consumers spend millions of pounds every year finding out what the consumers think of their products and services and identifying what will motivate them to buy more. B2B organizations, 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 do not.

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

This finding is confirmed by research by Cape Consulting. Most business customers interviewed by Cape Consulting said that while they would discuss operational failures with suppliers, they were less comfortable giving feedback about relationship management.

The need to maintain a working relationship prevented them from 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.

It is an established fact that in a typical B2B organization, about 80% of business comes from about 20% 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 organizations’ views on their suppliers. The key finding — that B2B suppliers can increase their revenue from that customer by as much as 50% — stems from that research.

All the senior executives interviewed said that suppliers who delivered what they promised and managed relationships effectively could win ‘significant’ new business from their organization. Only a few valued that additional opportunity at less than 25% of what they were currently spending. Cape Consulting’s research also found that, far from awarding contracts just on price, most organizations 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.

One senior executive of a major UK company, discussing this point with the author of this article 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 and the satisfaction of beating competitors is undoubtedly good for the ego. No wonder suppliers pay great attention to making the sale and getting the relationship off the ground.

There is no doubt that a huge amount of time, effort and personal pride goes into winning a big contract. Suppliers present their best features, make commitments about delivery, put their best people on the project, and 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, while the supplier heaves a sigh of relief and top-team attention turns to where the next big contract is coming from.

The difficulty for most suppliers is that delivering what has been promised demands a different mindset from the heady 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 customer’s business and can spot opportunities to grow it, people who can bring new ideas to the table — in short, people who can add value. That is 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. Cape Consulting have found that even the most senior people in a customer organization will willingly give their time to provide 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 suppliers take to develop lasting relationships that will create business opportunities for them and their customers?

Never forget — you are the supplier

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 does not 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. 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 a minimum. Follow up problems personally and make it clear to everyone in your company that existing customers are your best opportunity for business growth. Do not 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 the relationship with your customer get attended to and the customer’s problems solved.

Deliver what you promised and keep on delivering it

B2B relationships are normally based around service agreements so there is really no excuse for failing to deliver the standard you committed to. If operational problems crop up, do not keep quiet and hope that your customers will not notice. Inform them in good time – then they have a chance to manage the impact of the problem on their reputation and business.

Get to know your customer’s people

Even though your B2B relationship may be focused around only a small number of people at your customer’s organization, 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 organization 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 there is a range of contacts in place, so that one or two people moving will not have so much impact. Think through the effect of organizational 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. Do not just concentrate on the day-to-day; make time for ‘blue sky’ conversations because you never know where they might lead. Really get to know your customer’s business, find out what they want to achieve, identify where you can help — and say what more you can do. If they do not 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 what your customers think of you

It is 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 organization 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, they will be making creative proposals and promising an exciting future together, in the same way you did when you really wanted the business.

Above all, do not let the honeymoon end. If the relationship works well, your customer will not want to part with you, and they will invite you do work with them more, not less.

For more information on how to effect major improvements in the quality of customer service without adding capital costs, contact Brenda Stewart at Cape Consulting on tel: (01784) 417 900; or email: [email protected]

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