DCX 101 – Digital Customer Experience Segmented For B2B Customers
For a large swath of B2B companies across many sectors, the growing influence of customer experience strategies and the bold moves of customer-centric leaders pose a critical challenge. Traditionally, winning in the B2B arena has been a matter of being in the right markets, offering superior products and services, or being the lowest-cost producer. As these advantages have come under threat from increasing global competition, many players have invested in functional excellence. But while these benefits are substantial, they are dissipating quickly as competitors tap the increased mobility of labor markets and expanded access to knowledge.
This is why we believe that the emerging battle in B2B will be fought on the smart combining of digital and non-digital transformation to improve customer experience. A holistic, cross-functional transformation of a company’s core, including its culture, enabled by digitization offers a significant opportunity for differentiation and competitive advantage.
Therefore, in this article, we are going to elaborate on the full faces of digital customer experience for B2B companies.
The business value of taking B2B customer experience seriously
High satisfaction does not equate to high loyalty. A customer could be highly satisfied with a company’s products and services, but that doesn’t mean they are also loyal. A competitor could lure them away with a more attractive customer value proposition. Conversely, a customer may not be satisfied with a company’s offering but could display loyalty simply due to the barriers of inertia or the difficulties in switching brands.
Integral to both satisfaction and loyalty is the customer experience. And it is certainly no denying that investing in improved customer experience pays dividends. We have seen companies substantially raise customer-satisfaction scores through significant improvements in operational performance. These improvements can lower customer churn by 10-15%, increase the win rate of offers by 20-405, and lower costs to serve by up to 50%. In parallel, as customer experience improves, employee satisfaction tends to increase as well, because a more direct connection with customers adds meaning to employees’ work and helps them witness customer satisfaction.
A positive customer experience encourages customers to spend more. By way of example, Amazon – a leader in experience innovation with the likes of Amazon Prime and Amazon Dash – enjoys an industry-leading position on its Net Promoter Score (NPS), and attributes more than one-third of its revenue to cross-selling.
For such reasons, brands are at battle to outperform on experience such as making the customer journey easier and delivering faster. The more powerful brands connect more on an emotional level with their customers by invoking feelings such as pride and accomplishment, thus challenging the value paradigm in that customers are often seeking more than functional and rational benefits.
However, many companies are struggling with how to deliver an excellent customer experience. Poor customer experience drives brand switching and the majority of customers who suffer a bad customer experience spread negative word of mouth. Research by McKinsey showed that improving customer experience from average to exceptional (where the customer is “wowed” in some way) can lead to a 30-50% increase in KPIs such as the likelihood to renew or to purchase another product.
How customer-centric are B2B brands?
According to research by B2B International, only 14% of large B2B companies are truly customer-centric: That is to say, where the customer experience is deeply ingrained in the company culture. This indicates that B2B organizations have significant work to do to become more customer-focused, but it also highlights an opportunity for B2B firms to differentiate their brands and improve profitability by delivering superior customer experience.
More positively, 31% of B2B firms are engaged with customer centricity in that the customer experience is a core component of their organization’s strategy. This suggests that almost a third of B2B brands have a structured vision for the execution of strong customer experience, although it is not yet ingrained in the company culture.
For companies are highly customer-centric, respondents indicate the top ways they close the customer-centricity gap are:
- “We put the customer at the heart of their business processes”
- “We design our products around customers”
- “We have a continuous feedback loop”
- “We invest in the online/digital experience”
This is where digital customer experience cut through…
Four pillars of superior digital customer experience
While the ideal approach to digital customer experience varies across industries and companies, most successful models are built on the following four pillars:
Pillar 1: Comprehensive, Personalized Customer Experiences
Personalized, automated customer interaction extends beyond the “purchase funnel” to all activities involved in meeting customer needs. Functions ranging from fulfillment to customer support and billing should be designed to provide the best experience for buyers.
Pillar 2: Segmented Customer Needs
Segmenting customers by needs and buying behavior allows companies to create custom-tailored experiences for each group.
Customer requirements vary by type of business, from small companies with unpredictable purchasing patterns to multinational corporations with analytical, technology-enabled buying processes, as well as others with complex, specialized purchasing needs. Requirements will also vary by product type.
Despite these differences, B2B customers typically fall into one of three persona groups, each with key features to identify for building personalized experiences.
- “One-click” customers: These include smaller accounts that tend to transact business like consumers, are costly to serve at scale, and often lack technological sophistication.
- Analytical customers: Refers to sophisticated large accounts that gather market intelligence to inform purchasing decisions. These customers require highly personalized service from suppliers.
- Solutions customers: Typically large accounts that require even higher levels of customization than analytical buyers, because they face an array of noncommercial challenges, such as extensive regulation, stringent security standards, and significant liability risks.
Pillar 3: Facilitated Customer Interactions
The best B2B customer journey requires advanced digital capabilities, in four key areas:
- Insight-enriched relationships: Companies need to know who their buyers are, their purpose for each purchase, and the key factors driving buying decisions. Deep customer insights guide interactions at every stage, including product design, engineering, and marketing.
- Frictionless interaction: Companies need to make it easy for customers to buy, and should do so by facilitating seamless buyer and seller transactions with digital technologies to automate or even eliminate cumbersome interactions and processes, from ordering and payment through fulfillment, replenishment, customer service, and back-office functions.
- Omnichannel integration: Sellers need to increase customer choice for their preferred transaction channel – phone, online, mobile, and even machine-to-machine while also ensuring a consistent experience and view of the customer across all channels.
- Platform business models: Businesses need to explore business models and open platforms that facilitate integration and collaboration across the value chain, through new data-driven products and services (such as predictive and proactive field-service models based on connected devices).
Pillar 4: Customer-Centered Operating Models
For many companies, moving toward a consumer-centered B2B model signals a radical cultural shift, requiring new ways of working – and thinking – across the organization. B2B companies that consistently deliver consumer-level online service understand how marketing, sales, product development, IT, and other functions shape customers’ experience. They break down traditional silos and form cross-functional teams charged with optimizing every interaction between customers and the company.
Empowered with resources and autonomy, these teams conceptualize, test, refine, and deploy innovations aimed at creating frictionless experiences for customers. They use agile methods, developing minimum viable products (MVPs) that deliver quick, tangible customer benefits with little up-front investment. To keep on track, teams work toward clearly defined targets, such as improving website functionality or enhancing online pricing options. By focusing on outcomes, they can monitor and adjust KPIs that measure progress toward their organizational goals – such as better customer acquisition, satisfaction, and retention.
What else behind a successful B2B digital customer experience?
Apart from the 4 pillars mentioned above, there are also other factors that influence the success of a digital customer experience scheme to B2B companies. According to a recent report by Episerver, the top reasons a digital transformation project failed were:
- Lack of professional executive within the company.
- The company has a culture that does not embrace changes.
- The performance quality of the software vendor of the company.
By solving those 3 problems, the digital customer experience is sure to be improved and bring about great value for the company. Curious how to effectively address each one of them and ? Let us suggest step-by-step guides for you.
Lack of professional executive within the company
The solution: Plan for more effective training. When done properly, training makes workers more skilled and efficient – increasing production, revenue, and profits while decreasing costs, waste, and inefficiencies.
Step 1: Prepare a training needs assessment
- Identify a clear business goal that the training supports
- Determine the tasks the workers need to perform so the company can reach that goal
- Determine the training activities that will help the workers learn to perform the tasks
- Determine the learning characteristics of the workers that will make the training more effective
Step 2: Develop learning objectives
- They shall address Knowledge, Skills, or Attitudes (KSAs)
- They are SMART
- They have four parts (ABCD)
Step 3: Design training materials
Designing training materials is like planning a dinner party, coming up with a menu, and writing the recipes. It’s the “plan before you do” phase of training creation.
While you’re designing your materials, keep the following points in mind:
- Always focus primarily on the learning needs of your employees, and not on what’s easy for your trainers
- Only create training content and assessments that relate directly to your learning objectives
- Remember the adult learning principles
- Include as much hands-on practice or simulation as possible: people learn by doing
- Whenever possible, put the employees in control of the learning process (instead of the trainer)
- Do everything possible to let the employees talk and interact with the trainer and with each other during the training
- Make sure there’s plenty of opportunity for feedback during training
- Break your training materials up into small “chunks” that are easier to take in and understand
- Order your “chunked” training materials in a logical manner—one step that builds on top of another, or chronologically, etc.
- Try to use a “blended learning” approach that includes training in several different formats (computer-based, instructor-led, etc.).
- Try to integrate storytelling and scenarios into your training
- Try to appeal to a variety of your workers’ senses during training—sight, hearing, touch, smell, and taste (when appropriate and not dangerous). Sight is by far the most important sense for learning, but adding the others when possible does help.
Step 4: Implement the training
- Inform the employees that will attend the training. Give them plenty of time in advance so that they can work it into their schedules and complete any necessary pre-training preparation.
- Inform the workers’ supervisor, reserve rooms for training, buy any necessary supplies, work through any scheduling or traveling logistics, and perhaps even have food and drinks available. Get your ducks in order in advance, so your training goes off as smoothly as possible.
- The implementation can take a variety of forms. It may be classroom instruction; practice opportunities such as role-playing exercises, focus groups, case studies, or small group assignments; on-the-job skills-based training; the delivery of paper-based hand-outs for individual reading and study; the completion of e-learning modules on a computer; a combination of some or all of these; or more.
Step 5: Evaluate and revise the training
- Kirkpatrick’s Four-level Training Evaluation Model
- The Phillips ROI Model
- Kaufman’s Five Levels of Evaluation
- Anderson’s Model of Learning Evaluation
- Summative vs Formative Evaluation
The company’s culture doesn’t embrace changes
The solution: Prepare change management strategies. Change management reduces the risk that a new system or other change will be rejected. Therefore, carefully crafting a change management strategy, in collaboration with other HR efforts, may eliminate the risk of change refusal.
Step 1: Identify the forces of change and what should be improved:
In this case, the change from a fully traditional customer experience process to digital customer experience due to the growing complexity of customer behavior and strong competition that require innovation is the force of change.
After that, your work is to pinpoint which part of the traditional customer experience should be digitalized, such as customer service, cybersecurity,…
Step 2: Identify the resistance to change within your company
Resistance is a very normal part of change management, but it can threaten the success of a project. Therefore, you must recognize the potential resistance first hand and plan on resistance management.
Some of the most common reasons for resistances are:
- At an organizational level: the direct cost of changing structure, culture, strategy,… is too high.
- Functional level: differences in subunit orientation, power and conflict.
- Group level: group norms, cohesiveness, groupthink
- Individual level: cognitive biases, uncertainty and insecurity, selective recognition and retention, habit.
You can also conduct a survey beforewards to accurately point out resistance to change within your company, therefore, better prepare the measures.
Step 3: Minimize resistance to change within your company
The resistances are best tackled with basic communication due to the diplomatic nature of it. However, in case communication doesn’t work and it requires stronger solutions, some suggestions can be:
- Training: provides new knowledge and skills (includes coaching and action learning), helps break old routines and adopt new roles.
- Employee involvement: includes task forces, search conferences to increase ownership of change, helps saving face and reducing fear of unknown
- Stress management: an effective method when communication, training, and involvement do not resolve stress; stress management adds more motivation to change and lessen the fear of uncertainty.
- Negotiation: applied when the employees refuse to gamble anything without a good bargain. This includes the exchange of some kinds of value in return for agreement.
- Coercion: the most extreme measure, used only when all else have failed.
Step 4: Create strategic change
- Establishing a sense of urgency
- Creating the guiding coalition
- Develop a vision and strategy
- Communicating the change vision
- Generating short-term wins
- Consolidating gains and producing more change
The performance quality of the software vendor of the company
The solution: Carefully examine each step of finding a vendor. Finding a good vendor can help cut costs, promote efficiency and the quality of the finished product, which assists your B2B business better in digital customer experience.
Step 1: Define your objectives and goals
A decision without clear, relevant and actionable objectives may create ambiguity and hinder your future success. Therefore, here are some questions that would help you organize your thoughts and produce a SMART goal:
- What are your business priorities: is it cost-saving, scalability, time-to-market, competencies, vendor diversification, or something else?
- How will you align an outsourcing model with your current business strategy?
- What services do you expect a vendor to provide?
- What will be outsourced and what will be kept in-house?
- Time-frame: When will you start the first outsourcing project? What do the overall timeline and delivery plan look like? What are the milestones that need to keep up with
Step 2: Collect a vendor list
Creating a list of potential vendors gives you the perks of selection and a glimpse of how outsourcing companies are performing, therefore, benchmarking to set suitable criteria for your desired outsourcing partner.
There are 4 main sources you can exploit:
- Recommendations from your network
- Using search engines
- Reports from research and consulting firms
Step 3: Choosing a good country to outsource from
In today’s context where outsourcing has become one of the familiar patterns, many countries are upsurging as a destination for good outsourcing services. Here, we list down 3 countries that are rising strongly in terms of quality and cost.
India is probably the first country you think of when you hear the term “outsourcing” – and with good reason. India is the second-largest English speaking country in the world, making it an ideal choice for English-speaking employers interested in outsourcing. Their education system also focuses heavily on mathematics and produces as many as 2.6 million STEM graduates every single year.
According to research from Gild, Indian developers outscored their American counterparts on math and logic assessments by a full 11%. However, they received significantly lower scores on tests in PHP and HTML, so if you’re looking for web development, you may want to verify if the outsourcers you’re going to be working with have a good track record of work delivered.
China is home to many of the fastest growing IT companies and produces as many as 4.7 million tech graduates every year. In a hypothetical analysis of countries fit to participate in a “programming Olympics” by HackerRank, China ranked first.
There are, however, a couple of potential drawbacks here. First, only 10 million out of China’s 1.45 billion residents speak English, presenting a large communication barrier for many international employers. Second, China is known to have lax enforcement on Intellectual Property (IP) laws. However, this can be overcome by hiring a reputable outsourcing agency and establishing clear rules before you start working together.
In the report Spotlight on Vietnam, PwC forecasts that IT outsourcing will be one of the most attractive sectors for foreign investment. In addition, prominent tech companies such as Intel, IBM, and Microsoft have been actively and continuously endowing Vietnam. The trend is becoming more and more popular in Vietnam.
Also, the outstanding features of outsourcing in Vietnam are the cost-efficiency in relation to low cost and lucrative preferential corporate income tax. Another aspect being Vietnam’s young population (45% of population are under 35 years of age), low attrition rate (6-8% in comparison with 20% in India), convenient location and the rising competency of engineers – meaning businesses could now outsource with a reasonable cost without having to settle for low quality.
Read more: Vietnam – the offshore IT outsourcing heaven for tech dominants
Although not standing as high as China or India in the world’s outsourcing map, with the aggressive IT development in recent years and the cost benefits, Vietnam is sure to be a leading destination for IT outsourcing services.
Step 4: Evaluate the city
Some might underestimate this step, but the cities where the company is located could create a big impact on the profession and overall competency of the company.
In order to have a clear sense of how the city looks and feels like, desk research should be done first hand. The outline of the research could be drafted as below:
Each vendor option comes with its pros and cons, however, the real challenge really starts at choosing a reliable vendor that matches your objectives and meets your expectations. It is also important to note that the list of criteria we suggest below is not applicable to all because each company has a different priority and strategy – we simply suggest the general version to help you grasp some of the fundamentals.
Now it is time to track down your list of vendors and do a detailed evaluation and analysis on:
- Reputation and financial stability of the company: check it out on Clutch, Crunchbase, etc.
- The core competency of each vendor and how that particular profession can solve your business problems or actualize your ideas.
- Check out their portfolio and any of their past partnership (if possible): these kinds of information are often posted on the company’s website.
- Any awards, honors and achievements of the vendors.
- Contact the representative of the vendor to receive an in-depth consultation and understand the vendors more.
The detailer checklist for evaluation can be drafted as follow:
If you want a specific name of a quality software vendor, Savvycom would be the right fit. Savvycom, who is racing against time to create world-beating apps and bring values to our treasured clients, is confident to say we are the company that could deliver one of the best competencies in Viet Nam. We believe that with our 10+ years of tech expertise, the endorsements from 100+ clients from 4 continents around the world, the successful partnership establishments with reputable firms worldwide such as Apple, Microsoft, Amazon Web Services, IBM, etc., no mountain would be too high.
Contact us for further consultation:
- Phone: +84 24 3202 9222
- Hotline: +84 32 675 2886 (VN); +1 408 663 8600 (US); +612 8006 1349 (AUS)
- Email: [email protected]