Sunday, March 27, 2016

Companies Have More Work To Do To Deliver Great Customer Experiences

It's now abundantly clear that delivering outstanding experiences to existing and potential customers is critical for B2B competitive success. There's a growing recognition among marketers and other company leaders that customer experience has become a new basis of competition for B2B companies.

Numerous research studies have demonstrated that B2B company leaders now view customer experience as a primary driver of revenue growth and competitive advantage. For example, in the 2016 Digital Trends report by Econsultancy and Adobe, which was based on a survey of more than 7,000 global marketing, digital, and e-commerce professionals, respondents identified optimizing the customer experience as their single most exciting opportunity in 2016.

In a 2015 survey of 1,350 B2B executives by Accenture, 86% of respondents said that customer experience is important to their strategic priorities, and 41% put customer experience at the top of their list of strategic priorities. In addition, 79% of respondents said that a differentiated customer experience has a direct impact on business results, and 78% believe it produces a competitive advantage.

But despite all of the recent attention, there is compelling evidence that most B2B companies have more work to do in order to provide the kind of experience that their customers increasingly expect.

  • A recent report by Gallup stated that only 29% of B2B customers are strongly committed to the companies they do business with, which means that B2B companies are at some risk of losing 71% of their customers. The Gallup report described the problem in blunt terms:  ". . . B2B companies across all industries are at risk of being replaced - not because of their products or prices, but because they are failing their customers."
  • The Accenture study mentioned earlier found that only about 23% of B2B companies excel at delivering great customer experiences, while the majority of B2B firms (57%) are "idling in customer experience mediocrity."
The reality is, consistently providing exceptional customer experiences is hard. It's a complex, multi-faceted undertaking that requires the involvement of virtually every business function in a company. To excel at delivering great customer experiences, companies have to get a lot of things right. 

In the 2016 Digital Trends study, Econsultancy and Adobe asked participants to rate the importance of eight factors that can affect customer experience success using a scale of 1 to 5, where 5 is "most important to success." At least 63% of survey respondents gave a 4 or 5 ranking to all eight factors - strategy, design, culture, data, skills, technology, process, and collaboration.

One thing is clear. If a company wants to achieve customer experience success, it must have a person (or function) who is primarily responsible for coordinating the work involved in customer experience delivery. In large enterprises, this may take the form of a "chief customer officer." In small and mid-size companies, I suggest that marketing is the most appropriate function to lead customer experience management efforts.

I suppose it's not surprising that most marketers seem to share my view. In a 2014 survey of 478 high-level marketing executives by the Economist Intelligence Unit, just over one-third of the respondents said they are currently responsible for managing the customer experience, but 75% of respondents said that within three to five years, they will become responsible for managing experiences over the entire customer life cycle.

Illustration courtesy of Zach via Flickr CC.

Sunday, March 20, 2016

How Do Your Buyers Prefer to Receive Business Communications?

Last month, MarketingSherpa republished a chart that showed how people of various ages prefer to receive business communications. The chart was based on a survey of U.S. adults that was fielded last year and produced 2,057 responses.

In this survey, MarketingSherpa asked participants:  "In which of the following ways, if any, would you prefer companies to communicate with you?" Survey participants were given thirteen possible choices and could choose as many as they wanted. MarketingSherpa divided respondents into the following five age groups and presented the results by age group:

  • 18 - 34
  • 35 - 44
  • 45 - 54
  • 55 - 64
  • 65+
This survey did not focus on business buyers, but it did ask participants how they prefer to receive business-related communications. Therefore, the survey results can provide B2B marketers some valuable insights. In this post, I'll focus on the three age groups that are likely to include the vast majority of B2B buyers, and I'll provide a general "rule of thumb" description of the types of buyers that are likely to be found in each age group.
The 55 - 64 Age Group
The table below shows the five communication channels most preferred by respondents in the 55 - 64 age group. Most B2B C-level executives will probably fall in this age group, although it's not that uncommon to see C-level leaders who are younger.

The 45 - 54 Age Group
The following table shows the top five channels identified by respondents in the 45 - 54 age group. This age group is probably where you will find B2B executives who are just below the C-level. It is likely to include business unit or regional managers, as well as functional executives - such as marketing, sales, IT, finance, or operations - who report directly to C-level executives.

The 35 - 44 Age Group
The table below shows the five channels most preferred by respondents in the 35 - 44 age group. In the B2B world, this group is probably where you will find mid-level executives and managers who influence, but do not make, final buying decisions. These "buyers" are important for B2B marketers because they often perform most of the research relating to potential purchases.

Insights from the Survey
The findings of the MarketingSherpa survey clearly show that people of different ages don't differ as much as we might expect when it comes to how they prefer to receive business communications. For example, e-mail was the most preferred channel, and postal mail was the second most preferred channel for all three age groups. This suggests that direct mail can still be an effective marketing tactic with B2B buyers of all ages. It's also interesting to note that two very traditional media channels - television ads and print media - were among the top five most preferred channels for all three age groups.

The survey also revealed some significant differences among the age groups. For example, in-person conversation or consultation was a top five choice only for respondents in the 55-64 age group. In-person communication was ranked seventh by both the 35-64 age group and the 45-54 age group.

Despite all of the recent focus on social media, it wasn't a top five channel for any of the three age groups discussed in this post. However, it's important to note that social media was the third most preferred channel for respondents in the 18-34 age group, which suggests that social media will become a more important communication channel as the people who are now in this age group take on larger roles in the B2B buying process. 

Sunday, March 13, 2016

How Changing Buyer Expectations are Expanding the Mission of B2B Marketing

In November of last year, a group of analysts with Forrester Research published a set of predictions about how B2B marketing will evolve in 2016. Their predictions cover a range of topics - including marketing strategy, predictive analytics, marketing technology, and content marketing - and most of the predictions point to the continuation or amplification of trends that have already begun.

In my view, the most significant Forrester prediction is that "B2B Marketing Will (Finally) Adopt a Go-To-Customer Strategy." Forrester's analysts argue that the role of marketing is expanding, primarily because of changes in how business buyers prefer to access and consume information and because of rising buyer expectations for consistent customer experiences both before and after a purchase is made.

Forrester writes, "In 2016, B2B marketers will develop a digital engagement strategy that will influence, persuade, and build trusted relationships across the customer life cycle, by expanding marketing's role into domains previously owned by sales or service organizations."

Forrester's analysts contend that the need to provide engaging and consistent experiences across the entire customer life cycle will lead marketing to become "the steward of the customer relationship" and "the architect of full customer engagement." They write, "2016 is the year when B2B marketing will adopt an omnichannel orientation and reduce the influence of product marketing and other departments on customer-facing aggregation and optimization of content."

While I certainly don't believe that this transformation will be fully realized in 2016, I do believe that Forrester's analysts have accurately described how high-performing B2B companies are beginning to redefine the role and objectives of the marketing function. Recent research by the Economist Intelligence Unit (EIU) reveals that senior marketing leaders from around the world have a similar view about how the role of marketing is both expanding and changing.

In early 2015, EIU published The rise of the marketer:  Driving engagement, experience, and revenue. This report was based on survey responses from 478 senior marketing executives from North America, Europe, Asia-Pacific, Africa, and Latin America, and on in-depth interviews with several marketing leaders.

In the EIU research:

  • More than 80% of survey respondents said they need to restructure the marketing function in order to better support their companies' strategic objectives.
  • Seventy-five percent said that over the next three to five years, marketing will become responsible for managing the customer experience.
  • Respondents said that creating lasting engagement is becoming the most important marketing objective, and 63% of respondents said that the best way to define engagement is in terms of customer renewals, retention, and repeat purchases.
There's no doubt that B2B marketing is evolving at a rapid pace, and it's also clear that changes in the behaviors, preferences, and expectations of B2B buyers will require companies to expand the scope of marketing's responsibilities.

Illustration courtesy of Gabriel Rojas Hruska via Flickr CC.

Sunday, March 6, 2016

Can Marketing and Sales Provoke Prospects to Change?

Astute B2B marketing and sales professionals have long recognized that their toughest competitor isn't usually a company that provides an alternative product or service, but rather the processes or solutions that their prospects are already using - the status quo. In most cases, no sale can be made unless prospects are first willing to sincerely reevaluate their current methods and practices.

Given the importance of the issue, it shouldn't be surprising that many marketing and sales thought leaders have advanced several techniques for "breaking the grip of the status quo." I described some of these techniques in an earlier post, but I've often wondered how effective they really are. The central question is:  Can marketing programs and/or sales conversations alone create a willingness to consider change, or is something else required to motivate a prospect to reexamine the status quo?

The answer to this question has major implications that are often underappreciated by both marketing and sales professionals. If marketing and sales activities can provoke a willingness to consider change in most prospects, then the content of our "top of funnel" marketing and sales messages should emphasize the need for change, and our goal should be to get our messages in front of as many legitimate prospects as possible. By "legitimate prospects," I mean companies with problems, needs, or challenges that our products or services can effectively address.

If, on the other hand, marketing and sales activities can support and enhance, but not usually provoke, a willingness to consider change, then our sales and marketing messages should emphasize how the status quo can be changed and how the change will result in a better status quo. In this circumstance, our goal should be to identify which prospects are already motivated to consider change and then get our messages in front of those prospects.

So, what's the answer to the question? The best evidence we currently have suggests that we shouldn't expect marketing programs and/or sales conversations alone to consistently provoke potential buyers to become open to change. The evidence does indicate that the right marketing and sales techniques can enhance a prospect's willingness to change, once the initial impetus exists.

For example, in a 2012 article for the Harvard Business Review, Brent Adamson, Matthew Dixon, and Nicholas Toman describe the strategies used by top-performing sales reps, as revealed in research by CEB. Adamson and Dixon are also the co-authors of The Challenger Sale, and in that book, they write that today's most successful sales reps use disruptive insights to teach potential buyers new ways of thinking about the issues their business is facing.

Does this mean, therefore, that disruptive insights are sufficient to consistently break the grip of the status quo? Not exactly. In the HBR article, the authors stress the importance of using disruptive insights with the right prospects. They argue that top-performing sales reps:

". . . pursue customers that have an emerging need or are in a state of organizational flux, whether because of external pressures, such as regulatory reform, or because of internal pressures, such as a recent acquisition, a leadership turnover, or widespread dissatisfaction with current practices. Since they're already reexamining the status quo, these customers are looking for insights and are naturally more receptive to the disruptive ideas that star performers bring to the table. . . Stars, in other words, place more emphasis on a customer's potential to change than on it's potential to buy." (Emphasis in original)

The reality is, identifying the right prospects to focus on is as critical to demand generation success as the specific marketing and sales techniques that we use. As the HBR article suggests, identifying prospects with a willingness to consider change is typically seen as a sales function. But what if we could identify which prospects are willing to change long before those prospects interact with our sales reps? With this insight, we could focus our marketing activities on those prospects and improve the productivity of our marketing programs and our overall demand generation efforts.

This is one of the core benefits promised by the providers of predictive analytics software and services. In a future post, I'll discuss how predictive analytics solutions work, and how effective they appear to be.

Illustration courtesy of R/DV/RS via Flickr CC.