Knowing your Customers
I have been the UK MD of InfoQuest for eleven years now. InfoQuest specialises in B2B customer satisfaction surveys for medium and large businesses. We encourage our clients to choose their most important customers for the survey process – through a mix of revenue, profitability and potential additional sales – which would typically be “looked after” by Key Account Managers (KAMs).
We would expect KAMs to have a maximum of 25 accounts – any more and the relationships would be diluted to less than meaningful.
Before we send out our “survey in a box”, we validate the customer list that our client has given us by telephoning the customers. In the ‘phone call we check three things: -
1. Have they received a letter from our client introducing and explaining the survey?
2. Are they willing to take part in this exercise? And
3. Have we got the correct contact details – spelling of their name, job title and mailing address?
The arguments for this being a simple and straightforward task are strong: -
- This is a list of the client’s most valuable asset.
- Everyone has a CRM system of one sort or another, so the data should be there.
- It’s the KAM’s lifeblood to know who’s who at the customers.
So why is it that I’ve yet to see an entirely accurate customer list?
Or, put it another way, 90% of the customer lists that I see are faulty by at least one record in every five [“faulty” could mean Dr instead of Mr; Mr instead of Mrs (!); Jim instead of James; Caldwell instead of Coldwell; wrong or missing job titles; and wrong postal addresses].
As a business person, what do you feel about this?
I’d like to add 2 more considerations for market research buyers.
1. Because B2B and B2C customer satisfaction studies are very different (as John says), it really is wise to pick a research partner with the right expertise. Don’t assume that a firm with lots of experience doing consumer research will be able to execute a B2B study well. B2B customer sat studies are a very different animal, and frankly, can be far more challenging.
2. People planning B2B cust sat studies should know that identifying those behaviors that reflect loyalty vary a great deal by B2B target market, category, etc. “Propensity to recommend” and other common B2C approaches do not always apply. You really do need to do some discover work to ID the items that are relevant to your company. a brief article here: http://www.researchrockstar.com/nps-is-not-the-de-facto-metric-for-telecomm-customer-satisfaction/)
Excellent post John !
I don’t agree with everything but I do agree wholeheartedly that B2B and B2B are completely different and not just for surveys.
My current and previous roles are in B2B but my first jobs were in B2C and there is a world of difference.
You simply can’t take the same attitude and the same strategies for dealing with them both. We need to look at the objectives of our business and plan accordingly.
Thanks!
Eric
@ericjacques
My first instinct was to agree wholeheartedly with you on the point that B2C is about the experience and B2B is about the relationship. Then it occurred to me that there may be some businesses who are large enough so that they can mandate actions by their vendors. Take Walmart for example. My understanding is that they told General Electric to make more energy efficient bulbs available or they would find someone who could meet that need. Same with packaging and with the RFID chips. I know that Walmart is very strict about the ethics involved in interacting with their vendors. A vendor can’t so much as offer a Walmart employee a bottle of water.
Based on this, Walmart probably carries less about the relationship and more about the experience, that is, getting the vendor to meet Walmart’s needs.
On the flip side, a soft drink company probably uses an account management model with grocery chains (including Walmart). Account management is based, IMHO, more on relationships than experience. Most chains probably go along with that.
Except for customers with clout like Walmart. Of course, this may be one of the few exceptions that proves the rule.
Thank you Glenn.
I started thinking about commodities where there is no relationship and very little experience. But then my head started to hurt!
I was waiting for someone to write this post, thank you! I agree with what’s written, as well as with Kathryn’s comment concerning the “propensity to recommend” question and its applicability in a B2B environment. There is great benefit to managing, measuring and evaluating the relationship as a whole, but we have to remember that at the end of the day it is comprised of multiple single interactions at all levels of the organization and each of those has to be managed, measured and evaluated.
Haim
Surely the reason that Infoquest is focused on b2b is that it’s too expensive to send out the little plastic boxes to consumers? And that there is not enough space in the box to make the 11-boxes needed for Net Promoter Score measurement… Jus’ sayin’…
Thank you for your comment Ms Tractor. It is a shame you felt unable to leave your true identity. Actually, our research suggests that we are between 25% and 50% cheaper than telephone surveys (even NPS telephone surveys) and its not that we don’t have sufficient compartments in our box, it’s that it would be such a waste sending out a box with only one card in it!
Very interesting blog post here John. I have to agree that B2C vs. B2B Satisfaction questionnaires are very different and to approach them with the same strategy would be a horrible mistake. However, I feel that the rest of your blog post dismisses the importance of B2C satisfaction surveys. While I do understand that most B2C transactions are on a more experience level as opposed to a relationship that is built I think that its the B2C relationship that drives the ability to create B2B relationships. Yes, initially much of the investment a company makes to develop a product focuses in B2B for vendors and manufacturing but once a product/service is available for B2C it will live or die on how satisfied customers are.
John – I agree that B2B and B2C are very different, but I tend to think the key difference is that B2B involves multiple people on each side having interactions with their counterparts. Does that make it a relationship or just a multi-person, multi-touchpoint experience? Don’t know. Obviously what simplifies this is that there still tends to be a single decision-maker. What complicates is that decision-maker may not be the person who has most contact with your company. From a research point of view, it is easiest to focus on the decision-maker, but from an improving the customer experience point of view, that may not yield the best insight. Research is always complicated by the range of stakeholders, especially if a desire for simplicity results in an underestimation of the influence some have, the result of which is both an incomplete picture of the experience and an inaccurate assessment of likely future buying behaviour.
Personally I believe the approach you advocate for B2C works for B2B too – take a cross-functional team of your people to visit selected customers and look at every interaction from their point of view. That will yield masses of insight about how the experience for that customer – and similar customers – could be improved. While B2B relationships tend to be more complicated, the number of customers is typically fewer – often just a handful. You can obviously only do this with a few customers, obviously so selection is critical – picking either representative customers or, ideally, those that are representative of where the mass will be in the future (the leaders that others will seek to emulate).
John, interesting question which I’ve been pondering for a few days. The answer or, at least, an answer came to me when I read Bob Apollo’s latest blog posting “7 reasons why most B2B CRM systems get forecasting badly wrong…”
The opening paragraph is the key one: “How accurate are your sales forecasts? According to the latest research from CSO Insights, less than 50% of deals close as originally forecasted. A significant number never close at all. Think about it – the average sales forecast is no more accurate than tossing a coin.”
The majority of companies make strategic decisions based on low survey response rates for the same reasons that they set spending budgets based on poor sales forecasts – it’s the way it’s always been done and it’s been good enough so far.
Now, there are enlightened companies that understand the need for more rigorous data gathering in order to make informed decisions and their numbers will grow.
However, data gathering and analysis can be an expensive process both in time and resources required. A BERR report of January 2009 indicated that 85% of all UK companies have 10 or fewer employees and that 61% of all UK companies have 3 or fewer employees.
My guess is that these micro companies cannot afford to gather and analyse the data, either internally or externally, so they will continue doing what they have always done.
It’s sad but true: all things are possible given sufficient time and money, both of which are often in short supply.
Hi John
You make a good point. Bechtel – the construction giant – used to say that for success on a project you needed just three things: understanding, commitment and follow-through.
I like the words follow-through because they are a reminder that like a golf-swing or tennis stroke you won’t strike the ball right without a smooth follow through.
Geoffrey
Completely agree with you here. All too often we see companies complete a CSAT measurement program and then they don’t act on the data. As you said it’s worse to pretend you care and to do nothing about it than to do nothing at all in the first place.