Some Harsh Realities of Business Relationship Measurement

January 15, 2016 — Leave a comment

fogLet’s do a reality check on the major differences between “B2C” and “B2B” which tend to be ignored, forgotten or abused in measuring business relationships….. particularly in the midst of everything else going on.

Reality #1: The B2B – B2C Intelligence Gap

Too much B2B customer marketing and associated “customer feedback” today remains based on Consumer Advertising Theory from the Packaged Goods industry of the 1950’s….a direct result of to the fact that Business to Business marketing really isn’t taught in Universities in the US today.

This vestigial consumer thinking causes our frame of reference to not fully encompass the important perspective that Business Customers are Companies, not Consumers, for the simple reason that the entity who buying a business product or service usually doesn’t use it…It’s not toothpaste.

Obvious, right?  Okay, so if we conduct a “B2B” customer feedback process, who do we need to be talking to?  Not users, I hope…. they can tell your product or service performance or utility if that’s what you want…but not much about your Business Relationship, Loyalty, or the fate of your future.

“Likelihood to refer”? To whom? For what? The user is evaluating a product bought for them to use in which they had little or no say. Thinking that they may have an impact on a future purchase decision is theoretical at best.

If your “VOC” is the voice of users, you’re not measuring the relationship.

Reality #2: Customers: Some are more equal than others

It may not seem PC, but not all customers are created alike. Let’s fact it: the ones that matter are the ones that bring us the most profitable revenue. These are the ones we need to measure and manage relationships with.

Yes, “all our customers are important to us…” However, the best revenue, margins, and LTV come from a certain few….and we can’t please everybody, can we?

Altruism has its place…..but better business results dictates that we need to measure those who really matter.

Reality #3: It’s a small world after all

Companies that sell to Businesses usually have a somewhat small number of customers…not thousands like Starbucks.

Most of us understand Pareto Distributions, but we need to apply this thinking in measuring our business customers. If we have 50 B2B customers, 20% of which account for 80% of our revenue, that’s 10 Customers we really need to be concerned about.

Only 10 customers, you say? How can I do a survey when there are only ten customers? Answer: You do a census of all 10…see # 5 below.

Reality #4: It’s lonely at the Top

Relationships with business customers are built and lost near the top…not the bottom….no offense. It’s the Decision Makers who buy us or leave us….they’re the ones who matter. They may not be easy to get to, yet most will tell they are surprised they are not interviewed/surveyed more often. The simple fact is that these are the people who control your destiny and are those you can learn the most from.

Yes, there are “influencers”, and they can be important to get feedback from…but that’s not where the buck stops.

If your “Voice of the Customer” is listening to users, not Decision Makers, you’re most likely hearing static or interference.

Reality #5: “Big Data” vs. Clear and Present Data:

If we accept Realities 1-4, that Business Customers who really matter are limited, and our relationships are determined by a handful of decision makers, why do we have B2B “Customer Satisfaction” surveys with hundreds of people?

This is a case of the tail wagging the dog….we want “Statistical Confidence” so we need a large “sample”….of people who most likely don’t  have a role in determining our relationship, loyalty, or revenue.

Chasing after a large number of irrelevant people to survey to serve better statistical confidence is an example of GIGO, if ever there was one.

Think of it this way: If I pick 10 customers who really matter, survey them all…I’ve got a “Census”….100% statistical confidence and accuracy…don’t I?

 

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