What is a customer experience?

High satisfaction does not equate to high loyalty. A customer could be highly
satisfied with a company’s products and services, but that doesn’t mean they are
also loyal as a competitor could lure them away with a more attractive customer
value proposition. Conversely, a customer may not be satisfied with a company’s
offering but could display loyalty simply due to the barriers of inertia or the difficulties
in switching brands.

Integral to both satisfaction and loyalty is the customer experience. We have entered
the age of the experience economy where customers expect more than ever before.
Brands are at battle to outperform on experience such as making the customer
journey easier and delivering faster. The more powerful brands connect more on an
emotional level with their customers by invoking feelings such as pride and
accomplishment, thus challenging the value paradigm in that customers are often
seeking more than functional and rational benefits.

A positive customer experience encourages customers to spend more. By way of

example, Amazon – a leader in experience innovation with the likes of Amazon
Prime and Amazon Dash – enjoys an industry leading position on its NPS and
attributes more than one third of its revenue to cross-selling.

However, many companies fail in delivering an excellent customer experience as

customers are four times more likely to leave a service interaction disloyal than loyal.
Poor customer experience drives brand switching and the majority of customers who
suffer a bad customer experience spread negative word of mouth. Research by
McKinsey showed that improving a customer experience from average to
exceptional (where the customer is wowed in some way) can lead to a 30 to 50
percent increase in KPIs such as likelihood to renew or to purchase another product.

How customer-centric are b2b brands?

According to research by B2B International, only 14% of large b2b companies are
truly customer centric where the customer experience is ingrained in the company
culture. This indicates that b2b organizations have significant work to do to become
more customer-focused, but it also highlights an opportunity for b2b firms to
differentiate their brands and generate higher revenues by delivering a superior
customer experience.
More positively, 31% of b2b firms are engaged with customer centricity in that the
customer experience is a core piece of their organization’s strategy. This suggests
that almost a third of b2b brands have a structured vision for the execution of strong
customer experience, although it is not yet ingrained in the company culture.

What are the tenets of b2b customer experience excellence?

With this in mind, how can b2b brands become more customer-centric to the point
that the customer experience is embedded into the company culture? In examining
the customer experience of over 500 b2b brands, we identified a step-by-step
process to achieving b2b customer experience excellence that applies to virtually all
b2b brands, as shown in the table below. We then tested how well large b2b brands
perform on each of these tenets of customer experience excellence, on a 10 point
scale where 1 means poor and 10 means excellent. The far right column of the table
indicates the top 3 box score, i.e. those rating their organization an 8, 9 or 10 out of
10.

Step Requirement of B2B % of B2B

Provider Firms With
Good
Performance

1 Commitment Being enthusiastic about 48%

satisfying customers and
making them feel valued

2 Fulfillment Understanding and 38%

delivering on customer
needs
 3 Seamlessness Making life easier for the 40%
customer

4 Responsiveness Timely response, delivery 39%

and resolution

5 Proactivity Anticipating customer 25%

needs and desires and
striving to resolve issues
before the customer feels
pain

6 Evolution Continually seeking to 27%

improve the customer
experience
At least a quarter of b2b firms perform well on each step of the process towards
customer experience excellence. The highest performance is on the first step,
commitment, yet only around a half of b2b firms are committed, i.e. enthusiastic
about satisfying customers and making them feel valued. This is alarming given that
commitment is the foundation to success. In other words, without being committed to
delighting customers, it is very difficult to deliver an excellent customer experience.

Knowledge-based companies (such as those in IT, financial and professional

services, healthcare and education) rate their customer experience performance
higher than companies in trade and services (such as wholesale, telecoms and
utilities) and companies in manufacturing and construction. Knowledge-based
companies typically entail more customer interaction with people and so there is
arguably more opportunity to build strong customer relationships.

How can b2b brands improve the customer experience?

1. COMMITMENT: The first step in customer experience excellence is to be
committed to satisfying – and where feasible, delighting – customers. Employees
have to share a common goal of customer centricity for 100% commitment to the
customer experience across the organization. Cintas, the facilities management
company, refers to its employees as “Partners” as a means of engaging their
cooperation towards the shared purpose. Southwest Airlines takes this a step
further by capitalizing all those who engage with its brand in some way.
Southwest’s purpose includes “Connecting People” and its mission includes
“dedication to the highest quality of Customer Service”.

Companies committed to customer experience excellence should be passionate

about their customers to the point that customers recognize the brand’s efforts in
going the extra mile. These extras drive differentiation yet are usually small actions
and low cost to implement. The founder of the Ritz-Carlton hotel said recession
isn’t an excuse to eliminate distinguishing features such as bouquets of fresh
flowers, as this would bleach the customer experience clean of what makes the
hotel distinct. Ritz-Carlton guests are not after a bed and four walls for the night;
 they are seeking an exceptional experience where every touchpoint with the brand
makes the customer feel special.

The more sophisticated companies boast customer experience-dedicated teams.

These typically comprise a head of customer experience who is supported by
someone in a research role (to collect and analyze the voice of the customer),
someone in a process implementation role (to ensure the customer experience is
ingrained across all processes), and someone in a culture role (typically part of the
HR function). The most successful companies are those with cross-functional
teams, i.e. various integrated functions across the organization focused not only
on improving the customer experience but on reinventing it. McKinsey claims that
less than 30% of companies have a highly collaborative culture, indicating that
most have work to do in achieving a shared commitment to customer centricity.

According to the Service Profit chain, customer satisfaction improvements are

linked to employee satisfaction. The more successful companies at delivering an
excellent customer experience are those who also understand what satisfies and
motivates employees. And they are companies that typically reward employees for
exceptional contributions to customer experiences. Safelite AutoGlass, for
example, has a “Wall of Fame” displaying employees. Up to 75 employees
(typically spanning numerous roles across the company) are recognized annually
at Safelite, all of whom were nominated by their leader or peers. Such displays of
employee accomplishments towards the shared goal of delivering exceptional
customer experiences ensure that customer centricity is always a focus across the
whole company.

2. FULFILLMENT: Understanding and delivering on customer needs is vital to

customer satisfaction but is easier said than done. Customer demands are
frequently diverse and increasingly demanding – more customized, cost effective,
quicker, etc. In spite of this, up to half of b2b suppliers believe that quality and
price are all that matter. This oversimplification is perpetuated by sales teams
driven by short-term sales targets and obsessed with selling on price (as opposed
to on value). Sales teams are often poor listeners fixated on selling products and
services they have to sell, which can be very different from what the customer
really wants and values.

The requirements of customers transcend far beyond functional needs like quality
and value for money. Customers are individuals and have emotions and attitudes.
It is therefore important that companies not only understand their customers’
needs and behaviors, but display empathy, especially when customers report
issues. This is where segmentation can help. A UK mortgage company, for
example, teaches its reps how to identify and allocate a customer into one of its
personality segments. This enables the rep to quickly determine whether they are
interacting with a “controller,” a “thinker,” a “feeler,” or an “entertainer,” and to tailor
their responses accordingly. The segmentation strategy improved the customer
experience and decreased costs by reducing repeat calls by an impressive 40%.

Successful fulfillment also requires an understanding of unmet needs and what

keeps customers awake at night. This enables suppliers to differentiate their
offering and in some cases, exceed customer expectations. For example, an
 insurer serving livestock farmers challenged by climate change developed a digital
solution specifically tailored to farmers’ needs. This offering provides time-
stretched farmers with valuable information such as historical and predicted
weather data, in addition to the ability to buy policies online at times when the
farmers aren’t occupied by their job (such as late evenings).

B2b audiences increasingly value suppliers that help them differentiate and better
serve their customers. Innovation and partnership are key to delivering against the
needs of customers’ customers, but these requirements are often insufficiently
met. Most b2b companies have a parochial view of the customer being the direct
consumer of their product or service, and so the best-in-class b2b companies are
those who understand the full value chain and positively impact their customers’
customers.

3. SEAMLESSNESS: Across virtually all b2b markets, a top driver of overall

satisfaction and loyalty is ease of doing business with the supplier. Regardless of
whom the customer is buying from – be it a manufacturing company, a reseller, a
SaaS provider, a consultant – seamlessness is central to a smooth customer
experience.

In most cases, seamlessness is synonymous with simple, convenient and hassle-

free. HP, for example, identified a gap in the market for a more seamless ink
replenishment solution and launched its Instant Ink offering. This consumables
replacement service automatically delivers ink to the customer just before the ink
cartridge runs out. It also provides attractive cost savings of up to 70% through the
subscription program with its high yield cartridges. The subscription model makes
the customer experience simple, the delivery to the door makes it convenient, and
the proactive automatic replenishment makes it hassle-free.

Customer satisfaction surveys often assess the amount of effort the customer has
to put into the relationship with the provider through the Customer Effort Score.
Feedback on poor performance on this metric indicates how improvements to
seamlessness can be made. By way of example, customers resent providers that
consume more time than they deem necessary as their time is precious and bears
a cost. Complaints on this issue include time spent on hold on a phone call,
wasted time repeating the same information, and lost time in having to deal with
incompetent systems, people and processes. It is clear that reducing customer
effort is pivotal to delivering a more seamless and therefore more superior
customer experience.

4. RESPONSIVENESS: As consumers in the digital era, we are accustomed to

intelligence at our fingertips and receiving answers in a matter of seconds.
Business professionals are also consumers and have the same expectations in the
workplace. Timely response, speedy delivery and fast problem resolution have
become the standard. Companies that excel on providing responsiveness that is
quicker than competitors and in a timeframe that exceeds customer expectations
are likely to deliver a superior and memorable customer experience. For example,
financial-technology start-up Kabbage requires just 7 minutes to approve a small-
business loan – nearly 5,000 times faster than the 20 days it takes a typical bank.
 Responsiveness spans numerous touchpoints across the customer journey
including communications, deliveries and issue resolution. Failing on this important
requirement can increase customer defection.

Market research programs can assist companies in becoming more responsive,

not just in identifying where improvements need to be made, but also by providing
a platform through which remedial actions can be taken shortly after a problem has
occurred. For example, real time detractor alerts enable problem resolution to be
taken quickly.

5. PROACTIVITY: Proactive companies are those capable of anticipating customer

needs and desires and that strive to resolve issues before the customer feels pain.
It is easier for companies to be proactive if they are good at fulfilling customer
needs and can foresee potential customer needs and pain points – such as in the
case of Amazon Dash and HP Instant Ink which prevent the problem of “running
out” before it happens, while making life easier for the customer.

Proactivity needn’t require new product or service offerings. For example, the
lighting company Osram Sylvania identified that a simple change in language
could make a big difference to the customer. Words like “can’t,” “won’t,” and “don’t”
naturally invoke feelings of disappointment and dissatisfaction as they imply an
inability to deliver against customer needs. The company therefore trained its reps
on alternative phrasing with a positive spin, such as indicating when an item would
be in stock, as opposed to the disappointing alternative of stating that the item is
currently unavailable.

Examining root cause can provide insights on where proactive measures need
taking. For example, Bell Canada recognized that a high percentage of customers
were calling back requesting usage instructions relating to a particular feature. As
a forward resolution to the issue, reps now provide a quick tutorial on the feature
over the phone, resulting in fewer call-backs and a drop in customer churn by 6%.
For more complex issues, the company sends follow-up e-mails which are easier
than lengthy instructions via telephone. This proactive approach means less effort
for the customer and a more seamless and hassle-free customer journey.

Fidelity uses a similar proactive support process on its website by providing

“suggested next steps” to customers completing certain transactions. For instance,
customers who change their address online are also asked about their interest in
ordering new checks and taking out new insurance. Such proactive measures
have resulted in a reduction of customer calls by 5%.

6. EVOLUTION: Customer needs, behaviors and attitudes can change any time, as
can competitive threats and influences such as technology and legislation. Thus
companies that already perform well on delivering an excellent customer
experience cannot be complacent. The totally customer centric firm acknowledges
that improvements must be made on an ongoing basis.

The more receptive companies to evolution are those that are agile and open to
applying design thinking to the customer experience. This entails reinventing how
customers interact with the company to reengineer and transform the customer
journey. The Netherlands-based bank ING, for example, created a solution for its
retail and corporate clients that enables them to access real-time account
overviews and customized reporting, along with the ability to process various
transactions from any location. This required the bank to conduct a major overhaul
of its systems and processes involving Omni channel automatic integration of
customer data. After just one year, ING had grown profits by 23% and increased
its share price by 15%.

So what does this all mean?

Business-to-business audiences look for solutions to problems, or offerings that
better meet their needs, such as more customized products, better integrated
systems, increased responsiveness, lower cost-in-use, or higher productivity.
Influenced by the consumer world, many b2b audiences are also seeking an
improved experience in using a b2b product or service – a customer journey that is
seamless, more convenient, and hassle-free. Savvy b2b suppliers sell an
experience and outcomes, not products. We operate in an experience economy
where brands embody more meaning through experience.

Customer satisfaction and loyalty research tends to assess company performance

in silos. Research on the customer experience, however, assesses the whole
customer journey in terms of interconnected touch points, and current and
anticipated pain points. Even in value chains with numerous channel partners and
routes to market, it is possible to identify opportunities for enhancing the customer
experience, such as in the case of HP with its Instant Ink offering.

Customer journeys are more complex than ever before as the average b2b
customer uses six different channels (such as in-person reps and ecommerce
sites) over the course of their decision-making journey. This can make it
challenging to deliver a seamless experience, yet b2b buyers who interact with
multiple channels spend more than those who only purchase from a single
channel. The more profitable customer experiences, therefore, are those that
comprise Omni channel marketing and sales strategies. They are also typically
delivered by companies that are more agile.

Customer experience excellence recognizes that the customer isn’t a mere

transaction. In b2b markets, the customer often comprises numerous decision-
makers and influencers within the same company, often with different needs. The
more sophisticated suppliers know how to sell on value to these different
audiences. They also understand the broader impact of their offering in terms of
the benefit to their customers’ customers.

The foundation of customer experience excellence is a commitment to putting the

customer at the core of what the company does, how it does it, and ultimately why
it does it. Less than a half of b2b firms are enthusiastic about satisfying customers
and making them feel valued, and without a commitment to delighting customers, it
is impossible to deliver an excellent customer experience. The starting point,
therefore, is to obtain board-level buy-in on ingraining customer centricity into the
fabric of the company. Although cultural alignment doesn’t happen overnight and
customer experience management needs to continually evolve, the financial
returns of customer experience excellence can be immediate and deliver a
sustainable competitive advantage.