Six Steps to Boost B2B Customer Loyalty May 22, 2008 Edited by Jeremy Cohen
Looking to foster genuine business-to-business customer loyalty? You now have a clear blueprint at your disposal for doing so, thanks to a recent study by the Corporate Executive Board's Marketing Leadership Council and Marketing Leadership Roundtable.
The study evaluated more than 70 B2B companies that conduct formal loyalty measurement programs. Its chief finding: Because the cost of switching suppliers is usually higher and more complex in a B2B environment, it is attitudes rather than behavior that best identify loyal customers.
"There's currently a heavy focus on the drivers of business-to-consumer [B2C] customer loyalty, but B2B marketers are more frequently being called upon to lead loyalty-building efforts as well," explains Alex Tserelov, practice manager for the Marketing Leadership Council. "The findings of our study explain how B2B loyalty is different and identify the statistically significant drivers of B2B loyalty."
Apart from the finding that loyalty is best measured by clients' attitudes, the study also found that purchase decisions become significantly more complex in the B2B environment than they are for consumers, mainly because input from several individuals is often required before a company appoints a supplier.
While customers in a B2C environment can easily influence their peers, B2B advocates often need to influence several individuals at various levels within the organization before their word-of-mouth recommendation becomes meaningful.
The study explored more than 100 marketing practices and capabilities commonly believed to contribute to B2B customer loyalty, from segmentation strategies through to designating a single point of contact. Using self-assessment feedback from participating companies along with financial data and measured percentages of loyal customers, the following drivers were identified:
• Share customer data across the enterprise. First, the report recommends B2B companies capture and share segment-level customer data throughout multiple functions and departments within the organization. That data should reveal customer end goals (as opposed to only their immediate needs), as well as the differences between progressive and average customers.
• Use the data to add value for customers. Second, this information can enable B2B companies to go beyond simply matching products against current customer needs, and provide added value by educating customers about what others in their segment are doing.
• Empower customer advocates. Third, the various advocate customers that are won through this approach should then be empowered with the right knowledge and tools they need—knowledge and tools that effectively promote their supplier's differentiated value proposition to key decision-makers within their own organization.
"This method made a significant difference in driving customer loyalty among the B2B companies studied," says Tserelov. "However, the concept of teaching customers and setting their expectations is contrary to traditional sales representative practices that focus on product matching and responsiveness."
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