Rethinking marketing strategies in B2B Customer Engagement
A focus on customer engagement drives many of the successful B2C strategies for digital transformation, but that doesn’t mean that B2B companies can take a back seat. Any company still on the bench about using digital strategy for creating a customer-centric business model will quickly want to get in the game.
As companies face mounting threats from competitors on their home turf and further afield, customer engagement will play a huge part in deciding who stands out from the crowd. This approach is even more rewarding when you consider that almost 3/4 of B2B customers1 report a lack of engagement. That means that companies are risking over 70% of their revenue from current transactions. Or, to put it another way, you have a better chance of seizing a bigger slice of that tasty market pie if you are part of the engaging 30%.
While different studies have churned out different numbers, the conclusions reached are the same: the rewards for using digitalisation to adopt a customer-centric approach are tantalising and tangible. One study revealed that the top ten most connected B2B brands enjoy one-third more growth2 than those who are not connected. Another report showed that B2B companies that adopt digital capabilities generate 8% more shareholder returns.3 Managers: it’s time to sit up and take note!
Before embarking on a strategy, B2B companies should first understand the nature of their engagement with customers, and how they are going to measure it
Struggling to find a definition of customer engagement that makes sense for your business model?
You’re not alone! While the meaning of customer engagement for B2B companies can vary by industry, it tends to drive the same reward – commitment.
Understand the differences (and similarities) of B2B and B2C engagement
The difference between market strategies is not necessarily in the approach. For example, both B2B and B2C stand to gain from marketing activities on social media, email, campaigns, and content hubs. Think a traditional institution like a bank can’t use social media? Think again! Even white-collar corporations can reap huge benefits from using social media as part of their digital strategy.
Confusingly, the traditional boundaries that drew a clear divide between B2B and B2C objectives in marketing are increasingly blurred. Twenty years ago, it was safe to assume that B2B companies relied more on developing loyal relationships and increasing Customer Lifetime Values than B2C, yet a quick glance at today’s leading B2C marketing strategies show more and more focus on building trust and long-term client relationships. Recent research goes so far as to indicate that there is little to distinguish between the CLV across B2B and B2C.4
On the other hand, the Cost Per Acquisition (CPA) for B2B customers can be significantly higher than the CPA for B2C customers (for example, not many B2C would-be clients will march into a shop and demand working prototypes!). B2B strategies also must adapt to more intense competition for a small pool of potential customers. This means that revenue generated from individual client relationships represents a bigger portion of sales for B2B compared with B2C. B2B companies therefore have extra incentive to increase CLV through customer engagement.
Arguably, the most important aspect to consider when deciding on an engagement strategy is customer behaviour. A typical B2B sales journey is longer and more technical than for a B2C, often involving complex interactions between different teams across various departments that may be located in different geographical regions. In addition, the B2B market has to account for their business purchases through reasoned or financial analysis, using logic and data. At worst, a B2C customer will get scolded when justifying their latest impulse buy to their weary spouse.
The opportunities (and challenges) of better B2B customer experiences
While these differences present a significant challenge for your B2B company, they also provide opportunities. Understanding market figures – and the reasons behind them – can allow you to exploit gaps in the market. Identifying competitor weaknesses can help you strengthen customer experiences, for the good of your client and your bottom line. B2B companies are recognising that customer centricity is pivotal in customer satisfaction, retention, and repeat sales. In order for companies to foster trust and strengthen loyalty to a brand, they must place customers at the core of their business strategies.
A crucial factor for B2B companies is understanding when to go digital. When there is a supply chain hiccup, chances are your customers won’t mind resolving the issue through a chat bot. When things go badly pear-shaped, you won’t win any favours by forcing your customers to do backflips before they get to speak to a real person.
Outside the need for human reassurance, there is a plethora of opportunities for offering simple digital journeys for actions such as tracking deal progress, re-ordering, or obtaining practical information and guidelines. In some industries, B2B customers have also enjoyed the rise of dedicated client applications, enabling them to keep tabs on equipment maintenance visits and other useful information.
And those are just the external facing strategies: incorporating digital tools can help you automate internal workflows, improve company-wide communication, and increase efficiency and productivity.
All of these benefits can help B2B companies deliver the best products and standards of service to their customer.
Evolve from bimodal measurement of customer engagement
An oft-cited difficulty when implementing a strategy for enhancing customer experience is determining ROI. There is a general understanding that achieving customer engagement generates value, but many leaders are still scratching their heads at how to measure the success of their strategy. A bimodal definition of engagement is simple but doesn’t help the identification of patterns in the long run. One solution is to link value generated from different types of customer behaviour on each point on customer journey,5 and then observe how changes in customer satisfaction affect these economic outcomes over time.
How can you measure
- don’t use a bimodal definition
- do link value generated with customer behaviours
- do use CSAT forms to observe changes in customer behaviour
- do compare trends in customer satisfaction with value over time
You can then use these insights to prioritise areas of customer satisfaction that drive the highest returns, and incorporate lessons learned when designing and adapting customer journeys. Determining in advance the metrics you will use to measure your success is paramount to achieving meaningful improvement: a recent report illustrated that ambiguous Key Performance Indicators (KPIs) weakened the success of digital strategies aimed at enhancing customer engagement. Other factors included lack of formalized processes for offering improved customer experiences as well as lack of critical technology and tools.
Improving customer engagement through digital tools is an integral part of a customer-centric strategy for B2B companies. Where managers are able to overcome difficulties in adapting their strategy to suit their business model, they will also be able to better identify opportunities for engagement that cater to B2B customers’ needs. Digital journeys that are tailored to, and help simplify, the complex sales process can go far in increasing the Customer Lifetime Value by enhancing engagement.
B2B companies that provide engaging customer experience throughout the lifecycle will stand a much better chance at generating game-changing ROI than those who adopt a half-hearted approach. A structured strategy with predetermined KPIs and the right digital tools can make all the difference in becoming the next leader in the B2B market.