Tag Archives: B2B

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?

John Coldwell

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If it looks too good to be true………………it might not be!

Last week I was telephoned by a marketing magazine. The young lady who rang wanted me to place an advertisement in their magazine directory. She asked what other advertising InfoQuest was currently doing and I told her about the three e-shots that were sent out over the summer. Normally the summer, and in particular September, is a quiet period for us. September on the other hand is one of our busiest months, when we traditionally start pan-European projects for a number of [mainly] American clients that have got themselves into a routine, whereby they want the results delivered back in the first couple of weeks in January for their corporate “Kick-Off” meetings – energising the teams, establishing the targets and focussing on the year ahead. But August is traditionally quiet and a time when I part-jestingly suggest that we should shut up shop and go to the South of France for the month.

This year I wanted to drum up some business, and so we sent out three e-shots with a bunch of hooks – Do you need to conduct a customer satisfaction survey in the next few months? Would you like to get a higher response rate? Would you like to get more from the results? That sort of thing. I’d been told that the average “open” rate – where people open the e-mail and read it – would be ten percent. What was of greater interest to me was the quantity of “click throughs” – people coming to our website. We tracked these in real time on the days that the emails went out, and the results were dire.

So, when the lady from the marketing magazine called me, I made sure that I conducted the due diligence properly. I asked for a copy of the magazine to be sent to me and on Friday afternoon rang three of the advertisers. The three I picked were all in market research but not competitors – as it happens they were either offering omnibus surveys (where people will be asked their opinions on a range of subjects, from pet care to hair care, with clients sharing the overall cost of the research) or children’s surveys.

My survey of the surveyors was conclusive. One said that they’d had no benefits and were going to cancel (they’d signed up to twelve weeks of advertising), one said that, over the years they’d had the occasional enquiry and the third said that they only did it for brand visibility.

This got me thinking again. I’ve had a discussion running on LinkedIn as to whether marketing directors are interested in Return on Investment and whether I’d made a mistake in pushing our 10:1 r.o.i. guarantee (you can see the fabulous feedback that I got at http://linkd.in/cSUVzq). The folks at the agency who designed the e-shots and mailed them out for me were terribly laid back about the [what to me were] appalling results. And the three advertisers who’d had no enquiries from their adverts were equally laid back. Both the buyers and the sellers of advertising / marketing appear to have such low expectations.

My background, prior to joining InfoQuest ten years ago, was fifteen years as a management consultant specialising in change and cost-reduction. We had to hit the ground running. The results of our efforts were being measured within weeks of a project starting. We were often in a situation of having to turn round the fortunes of a business. It was all about the bottom line. Lost opportunity was measured when a particular initiative was late in starting by just a few days. I fell in love with InfoQuest because it affected the top line and didn’t mean “people off the payroll”. Over the years I saw that InfoQuest delivered time after time, particularly when we ran the powerful top-team post-survey workshops (at one recent workshop, for a company that manufactures rubber hoses for diesel engines, my client’s top-team ended the day with 165 ideas, based on the feedback we’d got for them, for how the company could increase it’s profitable sales). So much so that I wanted to share the benefits and eliminate the risks for potential clients – and introduced the money-back guarantee.

There is an old saying that if something looks too good to be true then it probably is. And if marketing people are so used to their efforts being wasted (or is it wasteful) then perhaps our guarantee is actually frightening them off?

By the way, please feel free to contribute to the discussion on LinkedIn, or call me on 01484 868395 (+44 14 84 86 83 95 outside the UK) and I’ll be delighted to talk you through any questions you might have.

John Coldwell

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Can we puhlease start to differentiate between B2C customer satisfaction and B2B satisfaction?

Can we puhlease start to differentiate between B2C customer satisfaction and B2B satisfaction?

It’s driving me crazy.

B2C is about buying a motorcar or a bar of chocolate or some music. It might be about you having the condition of your teeth checked or even having a tonsillectomy. These are all experiences, judged on the point of sale and the subsequent delivery of the product or service. Highly developed, high-volume experiences lead to brand value – BMW; Nestle; I-Tunes. B2C is where the money that is already on the table gets shuffled around and redistributed.

B2B is about buying raw materials and components, capital goods and long-term services such as buildings management and financial audits. These are all ongoing relationships, built on trust, mutual support and mutual benefit. In most cases the goal is “partnering”. The value of these relationships is measured as “good will” on the balance sheet. B2B is the wealth creation of this world.

B2C is about the EXPERIENCE. B2B is about the RELATIONSHIP.

There is a third sector, which is smaller than the B2B and B2C segments but nevertheless significant, that revolves around project-based work. Examples would be law (on a case-by-case basis), management consultancy (where you are only as good as your last project), and building and civil engineering (“oh look – it’s a different ring master but the same old clowns”).

InfoQuest has always been about B2B. We will happily turn away business that does not fit the B2B profile.

With enquiries for B2C customer satisfaction surveys, my response is always the same: make sure the senior managers (managing directors, chief executives and others) are leaving their desks and watching and listening to their customers at the point of sale (preferably anonymously, although wearing a disguise is optional) at least weekly before they even think about employing an outside firm. Dame Mary Perkins, the owner of Europe’s most successful opticians, Specsavers, regularly goes incognito visiting her shops and employs an army of mystery shoppers. Sir Philip Green, boss of Arcadia and Britain’s 9th richest person, will go and talk to shoppers asking them what they like and what they don’t like.

The advice for project-based organisations is straightforward. The project manager and the client should have a regular Friday This Week / Next Week meeting to discuss what happened this week, what is planned for next week (commitments), put it in writing immediately and both parties sign it off. It’s not foolproof, but it ensures communication and goes some way towards partnering.

For B2B customer satisfaction surveys the client needs to be measuring the relationships they have with their most important customers. They need to be drilling down into that relationship, listening to both the decision-makers and the key influencers; treating people as people and individuals individually, with different wants, different needs and different personalities. And, above all, aiming to get a minimum 50% response rate to any survey or feedback mechanism for it to be anything like reliable.

Ten years ago I made the decision to launch InfoQuest in the UK at the CRM Show. InfoQuest had been around in the U.S. for eleven years and had had some exposure in the UK but no actual launch. It was a big mistake using the CRM Show (and we’ve still got the InfoQuest Customer Relationship Management Limited official moniker – another early mistake). Oracle and Siebel were about to take the world by storm with their CRM solutions and nowadays everyone naturally associates CRM or customer relationship management with big, powerful databases that record and plan customer interactions – what they sell should, in my mind, be referred to as Customer Interaction Management, but I guess its not so catchy. We were the only non-techy stand at the 3-day show and the IT managers and Chief Technology Officers just walked past. Oh well, happy days.

But please, can the researchers and the governments and the marketing professors and the business journalists of this world understand, accept and make the differentiation between B2B and B2C?

John Coldwell

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Treating customers as individuals

I have just come back from running one of our full-day post-survey workshops with an international IT firm.  It was an excellent session.  The results weren’t good, but the team came up with a bunch of ideas, which were prioritised so that the low-cost quick-wins came first.  But the best part of the session (for me, anyway) was the change in attitude of the CEO as the day progressed.  Early on he was asking about statistics and benchmarking (and so were some of the directors).  Don’t get me wrong; I’ve got nothing against statistics and benchmarking in their right place.  But here we had a company that has just over one hundred clients with, at most, two or three key contacts at each – that to me is a 250 person Christmas card list.

We had carried out an international customer satisfaction survey on three continents in five languages for this firm and had got responses back from more than 72% – 143 responses from 200 surveys that had gone out.

I asked the CEO directly, how many of the customers he knew.  He started going through the list (we have a chart of who responded; and another which lists out the serious issues, by customer; and in yet another section of the report we produce a page for each and every respondent, in alphabetical order).  The first one he’d spoken to a couple of times.  On the second one, he asked if e-mails counted (yes, of course).  He denied knowing the third customer on the list at which point both of the people on either side of him said in unison “you do” (which was very funny to watch and got the debate going).

My point was that we were talking about people, not segments or statistics.  And benchmarks can be a HUGE distraction.  Forget about how you compare with ABC or XYZ – the best companies that are at the top of their game focus on long-term continuous improvement.  Or, as I call it, the Toyota mountain of a thousand little ideas.

By the end of the workshop my new best friend the CEO was setting a target for the overall satisfaction question – “On an overall basis, how satisfied are you with our company?” (this question has been included in every single survey that InfoQuest has conducted since 1989 and it is always posed last – it’s the last card in the deck, so it gets a very considered response, as the responder has already been through up to 59 other questions and statements about the business relationship of the two entities).  The directors and senior managers (15 of them) were balking at the target being proposed by the CEO.  The CEO was talking about a 20 percentage point increase by the time they repeated the survey next year.  His team said that was too tough and it should be reduced.  Then he came out with a marvellous statement.

The CEO said that to get the 20 percentage point increase they simply had to move 30 individuals who were currently “somewhat satisfied” into being “totally satisfied”, adding the magic “That’s just two contacts for each person sitting round this table.  Who’s telling me that we can’t do that?”

I’ve had clients that have segmented their customers between desktop and mainframe applications; those that have received consultancy in the past year and those that haven’t; new customers versus legacy customers; Gold, Silver and Bronze customers (whatever the hell they are); and those where there is between 12 and 24 months of a service contract left to run.  These segments are all useful to an extent (well, nearly all) in that they provide labels that my client is comfortable with.  But in business to business, where there aren’t that many customers and they all need and want slightly different things, please just treat them as individuals!

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Why do so many successful companies employ customer satisfaction programmes?

Why do so many successful companies employ customer satisfaction survey programmes?

Among the reasons are:

To Avoid Preventable Losses

There are three operating areas in which most customers will openly express displeasure if you fail to perform to expectations – price, quality and on-time delivery. The problem is, there are dozens, sometimes hundreds of additional touch-points in the average business to business relationship in which customers tend to bottle up displeasure. Sales rep performance, tech support, customer service in its many and varied forms, finance administration, all means and manner of communication, placing orders, processing returns – it can be a long list.

The Forum Corporation of America analyzed the causes of customer
migration in 14 major manufacturing and service companies and found that 15 percent migrated because of quality issues, and another 15 percent changed supplier because of price issues. The remainder, 70 percent, moved on because “they didn’t like the human side of doing business with the prior provider of the product or service”.

Tom Peters, The Pursuit of Wow

And as if that’s not bad enough, they don’t “just” leave. Additional studies have consistently determined that the typical dissatisfied customer will also end up telling 8-10 people about their problem or experience.

The good news is, seven of ten complaining customers will do business with you again if you resolve the complaint in their favour.

The bad news is, for every customer complaint that you hear, there will be, on average, 27 others that will never be brought to your attention. Stated another way, roughly 96% of customer complaints will never be openly voiced.

Why do so many successful companies employ customer satisfaction survey programmes?

Among the reasons are:

To Drive Continuous Improvement

An old truism says that it’s far easier for great service to overcome a second-rate product than it is for a great product to overcome second-rate service. Within that realm is a simple reality that many
business operators fail to recognize:

Your customers know your company’s strengths and weaknesses, and they usually know them better than you do.

They know what it’s like to buy your products and services, from placing an order to having it delivered. They know how well you solve problems.

They know how responsive you are to questions or special needs.

They know if you make it easy to conduct business with you, or if it’s a painful process that’s riddled with red tape. They know if your employees are competent and courteous.

They know if you keep promises or return phone calls.

They know if you value their business, and show it to them, or if they are just taken for granted. They know if your products or services represent value for the money, and they know why or why not.

And…….if that’s not enough…..

Customers can be the best source of innovative new ideas. Throughout history, in all sectors, it’s often customers who come up with new ideas for improving an old product or launching a new one.

Why do so many successful companies employ customer
satisfaction survey programmes?

Among the reasons are:

To Build Market Share

The economics of customer satisfaction speak for themselves.

Industry studies.

“Totally Satisfied” customers have a repurchase rate that is 3 to 10 times higher than that of “Somewhat Satisfied” customers. This is documented by research at Xerox and in other in

“All or nothing: Customers must be ‘Totally Satisfied“ Steve Lewis, Marketing News. Chicago: Mar 2, 1998. Vol. 32, Iss. 5; pg. 11.

“Its “Totally Satisfied” customers were six times more likely to repurchase Xerox products over the next 18 months than its “satisfied” customers.

Why Satisfied Customers Defect. By: Jones, Thomas O.; Sasser Jr., W., Harvard Business Review, Nov/Dec95, Vol. 73 Issue 6, p88, 14p

“The relationship between satisfaction and actual share-of-wallet in a business-to-business environment is not only a positive relationship but the relationship is nonlinear, with the greatest positive impact occurring at the upper extreme of satisfaction levels.”

Timothy L Keiningham, Tiffany Perkins-Munn, Heather Evans, Journal of Service Research : JSR. Thousand Oaks: Aug 2003. Vol.
6, Issue. 1; pg. 37

“By examining contract renewal rates (Johnson Controls) found a one point increase in the overall satisfaction score was worth a $13 million increase in service contract renewals annually.”

American Society For Quality, February 2003

“IBM Rochester determined that if customer satisfaction levels increased one percentage point, an additional $257 million in additional revenue would be generated over five years. The ratio of revenue growth between very satisfied and satisfied customers was 3:1.”

American Society For Quality, February 2003

And, of course, the old adage that we’ve all heard and lived by for years. It costs six times more to attract a new customer than it does to keep an old one.

Why do so many successful companies employ customer
satisfaction survey programmes?

Among the reasons are:

To Create Checks and Balances

Various studies performed over the years, beginning with one conducted by Xerox in the early 90’s, have consistently shown that a Totally Satisfied customer is, on average, 3-10 times more likely to buy from you again than a customer who is merely Somewhat Satisfied.

Later studies conducted by InfoQuest took those findings a step further with development of a statistical model which determined that the financial relationship between customer satisfaction and revenues is both measurable and predictable. It found that, over time

  • A Totally Satisfied Customer contributes 2.6 times as much revenue
    to a company as a Somewhat Satisfied Customer.
    A Totally Satisfied Customer contributes 14 times as much revenue
    as a Somewhat Dissatisfied Customer.
    A Totally Dissatisfied Customer decreases revenue at a rate equal to twice what a Totally Satisfied Customer contributes to a business.
  • That last finding is particularly noteworthy in that it highlights that you can have twice as many satisfied customers as dissatisfied customers and still be losing ground.

What it all means in terms of revenue is simple. Maximizing business performance means doing everything possible to:

1. Turn Dissatisfied customers into Somewhat Satisfied customers.
2. Turn Somewhat Satisfied customers into Totally Satisfied customers.
3. Avoid undoing anything with customers who are already Totally Satisfied.
And that’s where the checks and balances come into play.
Do key decision-makers in your company know which of your top accounts is dissatisfied, and why?

Are priorities and initiatives aimed at improving customer satisfaction systemically known, universally pursued and routinely measured?

Is everyone in the company, all departments at all levels, hearing and focusing on the same things?

When your team looks at your business, do they see the same things your customers see? Do they know what your customers see?

Does everyone understand who your top accounts are and what needs to be done to keep them?

Fundamental questions, right? Yet in many companies, purely informal means are employed to try to maintain a sense of customer needs. Using a combination of in-house metrics, anecdotal field tales, passive data collection and an abundance of hindsight, they wage a valiant attempt to keep their fingers on the pulse of customer sentiments, often collecting information with one hand and fighting fires with the other.

Of course, bad news does not travel up the corporate hierarchy very well, and the vast majority of customer complaints are never openly voiced, which means that informal means are rather like estimating the depth of the ocean by looking at the surface. Add in the effects of
preconceived notions, wishful thinking, attitudinal biases and even the occasionally fragile corporate ego and…….. ……well, good luck.

So customer satisfaction surveys have been developed and adopted to fill the knowledge void.

Which leads to the next challenge. Not all customer satisfaction surveys are created equal, so how does one go about finding the one that will best meet your needs?

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