“The customer is always right” is the ultimate business cliché. It gets repeated so often that it almost loses its meaning. The fact is, however, the customer is always right when it comes to finding the most effective ways to grow your business. This is especially true in the B2B world, where you’re generally selling a much bigger share of your output to a much lower number of buyers than in the consumer world. That means that each company that purchases from you looms that much larger over your income statement –and you must find ways to continuously deliver customer satisfaction, or risk layoffs, plant closings and even bankruptcy., or risk layoffs, plant closings and even bankruptcy.
That risk isn’t necessary. When you know what your customers are thinking, when you understand what customers value and how high they measure value; you can adjust your products and services accordingly to not only meet their needs, but anticipate them. And you might not even have to make any changes to what you sell – you might just have to change how you sell it. Many times, your customers are simply not aware of everything you provide as a supplier. When that’s the case, it’s just a matter of educating your customers to those hidden benefits.
Gaining the complete customer understanding necessary to making the right strategic moves is the tricky part. Sometimes what your customers say isn’t what they really mean – and they may not even be aware of the discrepancy. Sometimes your customers aren’t completely honest with you – and one day, you wake up to find that your ongoing order just went to another supplier. Other times, the right questions simply aren’t asked of the customer – so you never get the real answers you require. That’s where Customer Satisfaction comes into play. During our 25+ year history of conducting customer surveys in numerous industries we have seen first-hand just how valuable this critical tool can be to our clients. That vast experience has led us to many profound conclusions about how B2B businesses can optimize customer relationships, expand market share with those customers and even conquer completely new customer sectors by building on their existing capabilities to furnish new products. I feel this information is too crucial not to share with the business world at large, which is why I’ve written this book. Our mission here is to explain the importance of Customer Satisfaction, and to reveal just how it provides real world actionable strategies to both currently-successful businesses that want to continue to grow, as well as companies facing hard times and hard choices. These continue to be volatile economic times and every business needs as much firepower as possible to meet the ongoing challenges constantly presenting themselves.
This writing is especially necessary because, frankly, B2B customer research information is just not readily available through other avenues. There are an incredible number of consumer research firms out there, as well as many talented consumer research authorities retained in-house by companies – but that level of expertise does not have an equivalency in the B2B world. You won’t find many third party firms that specialize in B2B Customer Satisfaction and, even within the marketing department of large manufacturers, distributors, wholesalers or other B2B firms you won’t find many executives familiar with even the survey basics.
That’s a shame and a danger. As mentioned earlier, B2B marketers face a customer base that is smaller and individual customers that carry much greater importance. To not thoroughly research what they value and how to best deliver those attributes can be akin to a supplier committing business suicide. The irony here is that it can be a lot easier, faster and cheaper to generate B2B Customer Satisfaction than consumer insight. You’re not dealing with millions of buyers spread out over the world – in some cases, you’re only dealing with three or four!
And yet, Customer Satisfaction surveys specially tailored to the B2B world are a rarity. Usually, consumer research methodologies are simply lazily adapted under the assumption that the rules are the same. They’re not. And they differ in five important ways:
1) The size of the customer populations.
As just noted, a supplier’s customer population can easily be dominated by a handful of companies, as opposed to the overwhelming number of consumers out there. Obviously, that supplier needs to know not only what each one of those customers is after, but what their competition is up to as well.
2) Product knowledge.
Imagine a consumer buying a toothbrush. He or she almost never knows all that much about that toothbrush – how it got made, what technically went into the manufacturing process or what the quality level is. The consumer will just usually rely on a brand name they trust so they feel more secure about the purchase. B2B is a very different story. Customers are incredibly knowledgeable about the products they order from suppliers; in many cases, they’re subcontracting products they could actually make or have made themselves. They know what you’re manufacturing inside out and have the experts in place who can thoroughly question every aspect of your process. In many cases they know the product cost as well as their supplier and will attempt to dictate – through contractual negotiations – what is an acceptable return on investment.
3) The magnitude of purchase volumes.
When a consumer buys a toothbrush, he or she usually buys only one. When one of our clients sells toothbrushes to a customer, it’s by the truckload. That’s because their clients have thousands of people in huge detention facilities who require toothbrushes on a daily basis. While consumer companies focus on relatively small sales amid a sea of transactions, B2B companies routinely deal with one customer buying millions of dollars of product. Obviously, a survey methodology has to understand and anticipate that fact.
4) The complexity of purchase transactions.
When a consumer shops for a toothbrush, he or she will find the aisle where toothbrushes are sold, and then make a series of small decisions very quickly. Should it be a soft, medium or hard brush? The long reach-around stem or a traditional straight, short one? Blue, red, yellow or pink? None of these choices is a big deal; the toothbrush is relatively inexpensive and they’ll be getting a new one in a few weeks anyway. With B2B, that kind of fast and simple decision-making just doesn’t happen, because there’s a lot more decision and transaction complexity in the supplier/customer relationship. That decision complexity may involve multiple levels of employees interacting on both sides, as well as some very long-term internal discussions – and simple consumer surveys don’t account for that at all.
5) The buyer-seller relationship.
Do you think our consumer will ever meet someone from the company that made the toothbrush he or she just bought? Doubtful, unless they live in the same town. The consumer relationship to the seller is at arm’s-length and usually only addressed by research and surveys. In the B2B world, suppliers and customers, in contrast, usually have a very tight and entangled relationship. Both parties actually actually talk and meet. And when a B2B survey is taken, it’s highly visible – as a matter of fact, it almost turns into a two-way communication that’s moderated by the survey company. The consumer and B2B methodologies, again, are completely different.
We’ve illustrated these five key differences in the below graphic, so you can get an overall sense of the wide gulf that exists between B2B and consumer transactions.
B2C Markets
- Many customers
- Limited product knowledge
- Small purchase quantities
- Relatively simple transactions
- Limited supplier relationships
Consumer Surveys
- Focus on the individual customer
- Selective census opportunity
B2B Markets
- Fewer customers
- Substantial product knowledge
- Large purchase quantities
- Potentially complex transactions
- Close supplier relationships
Business Surveys
- Focus on the composite picture
- Selective sample orientation
PMG recognizes the important differences between B2C and B2B markets in survey design. As you can see from this graphic, the ultimate focus of these two respective surveys is poles apart. Consumer surveys are forced to create a composite picture formed from a selective sample of the customer pool, while B2B surveys have the luxury (and necessity) of thoroughly analyzing each individual customer.
Focusing on B2B markets, it is important to understand why some suppliers grow and while others either shrink or just stand still. How does understanding customer satisfaction play into growth? What key questions should a Customer Satisfaction survey answer, and what the findings mean and how to correctly interpret them. Based on our years of research we will also reveal how suppliers should approach their customer relationships and what they can do to ensure the best possible Customer Satisfaction on their own.
We have gotten quite an education in the past 25+ years working with world-class suppliers to provide them with the best possible Customer Satisfaction, so that they might realize the best possible outcomes. I hope that you will find the results of that education, found in this and future narratives, informative, enlightening and, yes…even profitable.