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.

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