No more baby birds: the rise of customer power
Think your customers are out there, passively waiting for you to bring them the next juicy morsel of product? Think again. Today’s business-to-business customers are more likely to be busy comparing you with competitors – or even working out completely new ways of doing whatever it is your business helps out with. It’s time for a different kind of relationship.
Just who do B2B customers think they are?
In the last few years, B2B customers have started to behave more like consumers. They want instant service. Quick answers. To be able to contact you whenever they feel like it, using whatever channel they choose. They want more control.
And what’s more, rather than seeing their suppliers as distant, separate providers of products and services, they’re more likely to see them as an extension of their business, with strong sense that that “we’re all in this together”.
This is a big shift, with profound implications. But in our experience, only a minority of businesses are really acting on it.
Most are still carrying on as if the world was stuck in the rational, industrial “push” mode of working that has dominated for the last 50-60 years. In this model, businesses create products, forecast demand and then target their sales and marketing accordingly, treating customers like baby birds waiting passively to be fed. It’s based on the underlying assumption that the supplier knows best what its customer needs.
From push to pull
Why has the baby bird suddenly grown up? It’s because today’s B2B customers are massively empowered by cheap, ubiquitous technology and given vastly greater choice by deregulation and market liberalisation. They now have all the information and power they need to make their own decisions about what they want. Today, most customers have completed 80-90% of the buying process before they even contact a supplier. In short, business has shifted towards a “pull” model, with the customer at the centre. Suppliers are no longer in charge. The power dynamics are completely different.
Success in this new B2B world demands a more sophisticated understanding of customers and a different way of relating to them. But not in the old-school sense of market segmentation, i.e. classifying customers by size, spend, geography, purchase patterns etc. then customising your approach accordingly. It means knowing how your customers feel and how they behave. Because if you know this, you can understand what it is they value most, and then change your approach accordingly.
In the financial services industry, one of our clients had always assumed that its business customers made rational purchasing decisions based solely on price. However when we spoke to customers, it turned out that their concerns were more emotional, based on fundamental issues like getting promoted and having a high enough salary to pay for their children’s schooling.. Some were so unhappy with aspects of the supplier’s service that they became actively hostile, refusing to let the supplier’s staff onto their premises. In this particular supplier relationship, the customers felt both unappreciated and powerless.
What do your customers think about you?
Hopefully, your business doesn’t provoke quite such an extreme reaction in your customers. But have they changed the way they want to work with you? Are they, to steal an old Apple tagline, “thinking different”? And if so, what have you done about it?
The transition to customer centricity
The journey to a new, “customer-centric” way of working begins by understanding the scope of the issue in depth. In our experience this breaks down into three phases:
1. Awareness. Clearly identify the problem (or sometimes, the opportunity). Champion the issue and work to generate broad awareness of the need for a new way of understanding customers and interacting with them.
2. Scoping. This is a very important phase and one that many organisations neglect, going straight to building a business unit or new product without first identifying how and where customers benefit. Partly, this is because projects are easier than people. Like in an IT project, it’s easier to buy the equipment than to work out exactly how it’s going to help everyone work better. Scoping involves using a value proposition pilot to look at which customers would be involved, designing for their needs and considering how your internal behaviours affect the customer experience.
3. Making the case. Once the scope is clear, you are in a position to identify the specifics of strategy, objectives, costs and customers – and to make the business case for change.
Your customers want your business to succeed too
Relating successfully to the new, empowered B2B customer starts by recognising that the value your business provides lives in their heads and hearts as well as yours. As the diagram above shows, it’s a model in which the relationship has to work for both parties.
Using this value-focused approach, you can create an enduring vision on which to build a successful customer strategy.
Could the journey to customer centricity benefit you?
Answering the following questions will help you decide whether your business needs to consider a more customer-centric approach:
Have your customers changed in the way they want to interact with you?
How is this affecting your business?
How does your internal culture affect the customer experience?
To what degree could a more customer-centric way of working benefit your business?
Do you have people who could champion the change?
I'd love to hear what your experience is of embarking on a customer-centricity journey. What have been the obstacles and what have been the surprises for you along the way?