B2B Customer Centricity: Moving from lip-service to full service
by Mark Eardley (@mdeardley) Laura Ramos is Forrester’s VP and principal analyst serving B2B marketing professionals. In my next few columns, I’ll be asking her about customer-centricity — why it matters; how to achieve it; the results it produces for sales and margins; and the reasons that it does that.
In January 2018, I reviewed a Forrester report about its predictions for B2B in 2018. Heading the list was the assertion that ‘B2B marketers will put customers at the core of their purpose’. My series of Q&As with Ramos kicks off by examining that statement.
Back2Basics: It’s not just marketers who need to put customers at the core, is it? Shouldn’t customers be at the core of everyone’s purpose — shouldn’t every element of the business be customer-centric?
Laura Ramos: Absolutely! But, as obvious as the answer might sound, we continue to find that many B2B marketers are caught up in net-new customer acquisition and sales enablement activity that takes attention and resources away from the people that really matter, your buyers. We conducted a major survey in 2017 to understand what it really takes to be customer-obsessed, not just customer-aware. We found that the majority of B2B companies have not progressed very far: 65% of the B2B companies we assessed fell into the two least-mature categories on our customer-obsessed maturity scale.
B2B: To justify a customer-centric approach to those decisions and actions, what’s the goal of being customer centric — what does it yield in business benefits?
LR: Our customer obsession study yielded some very interesting and important results. Companies that obsess over their customers — which we defined as “an enterprise that focuses its strategy, operations, and budget to enhance its knowledge of and engagement with customers” — fare better on key business metrics than their less-obsessed peers. Customer-obsessed B2B firms are more likely to have happier employees and more loyal customers by a wide margin:
- Employees at 93% of customer-obsessed firms say they are happy to work at their firm compared to only 20% who say the same at customer-naïve companies.
- 95% of customer-obsessed companies say their customers are satisfied with their products and services while only 46% of customer-naïve can say the same.
- 93% of customer-obsessed firms believe their customer like doing business with them while just 41% of their customer-naïve peers can say the same.
Most importantly, customer-obsessed companies are more likely to outperform on their revenue goals when compared to less-obsessed peers: 42% of customer-obsessed firms said their revenues grew by 10% or more when compared to the previous fiscal year. Just 18% of the customer-naïve, and only 23% of the customer-aware firms posted similar results. That is the type of result that both the CEO and CFO will notice and appreciate.
B2B: In other words, being truly customer centric is demonstrably good for business. It boosts employee morale, raises customer satisfaction and increases sales. I’d also bet that it strengthens margins. So, on the road towards becoming customer-centric, how important is it that everyone agrees that customers are the most-critical component of the business?
LR: It’s hyper-critical that every customer-facing employee put customers at the core of their purpose. It’s less important for those who do not directly interface with customers on a regular basis — but, as our research shows, knowing more about your customers better aligns everyone with the company’s purpose and goals. And it makes all employees happier to work at a company that knows and values its customers.
B2B: I’d suggest that everyone who affects the customer experience (not just those with a direct interface) needs to accept that customers are at the core of their purpose. Do you see securing genuine agreement on that point as the major obstacle — the Big Barrier — to becoming customer-centric?
LR: I’m seeing that genuine agreement is essential but there are bigger obstacles. A lack of fact-based customer knowledge and not taking actions that focus on the customer first is keeping most companies from progressing from customer-naïve to customer-obsessed.
B2B: How can B2B organisations break through the barriers? What’s the starting point?
LR: First, increasing your customer knowledge must happen through both data and experience. Companies need to invest in not only cleaning up and improving their customer data but also adopting the discipline of customer data management. Marketing in particular must adopt, internalise, and share a new mindset focused on customers. Breaking through requires marketing — and the rest of the organisation — to become more human, helpful, and handy in its communications and interactions with customers.
B2B: Once the rest of the organisation acknowledges the benefits produced, how can a business best frame and implement a plan, a roadmap, that clears a path towards becoming customer centric?
LR: Companies encounter different barriers at different stages of their maturity. These barriers need to be addressed to move to the next level up on the maturity scale. For example, we found customer-naïve B2B companies have a hard time getting stakeholders to work together and do not work well across business units when solving problems. They are overly cautious, outdated, and slow-moving: A mere 16% have executives who take risks, 14% have ones who invest aggressively in new technologies, and 4% have ones who act on innovative ideas quickly. At these firms, marketing must sound the warning bell loudly that a turnaround is essential. We recommend that these firms take three steps:
- Clean up messy data so they can get serious about really knowing their customers
- Deliver insights along with lead information to sales
- Work closer with sales to build programmes that target ideal customers, not just any customer.
In contrast, customer- committed B2B companies (the third highest on our scale) over-index on most aspects of customer obsession:
- 89% have a strong understanding of what their customers want
- 90% prioritise customers’ needs over efficiency when making product or process decisions.
The difficulty here is to move outside of marketing and challenge the rest of the organisation to become more concerned with customers’ needs. This happens when they:
- Shift their revenue-generation practices from pipeline performance to customer engagement
- Use analytics and insights coming from these tools to guide which actions to take with specific buyers
- Use account-based marketing (ABM) to drive deeper engagement with prospects and customers alike.
B2B: In moving towards being customer-centric, what milestones need to be set and how may progress be measured?
LR: To reach the goal of becoming customer-obsessed, B2B firms must know where to start. Based on Forrester’s robust survey data and regression analysis, we’ve published a diagnostic tool that will tell you where you score on your journey toward customer obsession. B2B marketers should complete Forrester’s diagnostic across all marketing functions first, and then share it with sales, customer success management, service, and other customer-facing functions. Differences in cross-functional perceptions will add insight about your current state, and — although politically difficult to do — exposing the differences is a necessary first step to improving every department, not just those that lag behind.
From there, you need to plan your next steps — milestones, if you will — based on which operational levers you can pull most easily. Whether it’s talent, processes, technology, metrics, organisational design or culture — start with the levers that are easiest for you to pull in the next 30, 60, and 90 days to show immediate impact and gain broad organisational endorsement.
B2B: Who needs to be the custodian of the roadmap and the results achieved along the way? In other words, who drives the business from merely paying lip-service to customer-centricity and turns it into a business-benefitting reality?
LR: Becoming customer-obsessed is a transformational change. It will fundamentally reset day-to-day operations and rearrange marketing activities. It will affect the structure, talent requirements, process change, technology investment, and metrics across the business. But ignoring the problem or worrying about all the potential places where failure lurks won’t make the task of becoming customer-obsessed easier to tackle. We believe characteristics like imaginativeness, storytelling skills, customer insight, and communication expertise make marketing the right function to lead a customer-obsessed transformation. CMOs should not delay and our best advice is to just begin: Declare that you intend to become customer-obsessed.
That’s more than a marketing campaign. It means telling the story — to shareholders, employees, and customers — that you believe that customer obsession is the right path forward and that they will soon see the proof. Convene a series of focus groups including executives, customer success managers, advocate customers, and creative writers or agencies to talk about your journey to customer obsession using storytelling elements and narrative.
- Following this overview of benefits derived from centricity and ways to secure them, we’re going to look at how a centric approach enables B2B companies to: differentiate themselves; identify the key audiences for their marcoms; target those audiences; and measure outcomes. Next up: “B2B Customer Centricity: How it differentiates you from competitors and why this matters.”
Mark Eardley (@mdeardley) advises B2B companies on how to govern their marketing to attract and retain profitable customers; several of his clients have grown to become market leaders. He and Charlie Stewart have written Business-to-Business Marketing: A Step-by-Step Guide (Penguin Random House), which offers practical, actionable advice on how to make marketing make money. His monthly “Back2Basics” column covers how B2B companies and their agencies should manage their marketing.
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