B2B customer engagement – it’s emotional
B2B companies who systematically measure and monitor their customer engagement can lessen their dependence on the lowest prices – and increase revenues and profitability.
When a B2B company wins a contract, the perception is that the process was completely rational and non-emotional, unlike a consumer purchase. However, in fact, the reverse is true.
When consumers make bad purchases (with the possible exception of houses or cars), the financial and emotional impact is not usually significant or long-lasting. However, when a business-to-business buy goes wrong, whole careers and a company’s future are at stake.
However, in a Gallup study of thousands of B2B relationships, it was found that most sellers do not leverage the emotional engagement of their customers.
“22% of B2B customers are engaged, and only 13% are fully engaged.”
One reason for such a low level of engagement with customers, Gallup argues, is that most sellers think they only need to address the buyer’s interest in the product and price.
B2B companies should assess the level of their customers’ engagement because there is money in it for them:
“Fully engaged customers deliver a 23% premium over average customers in share of wallet, profitability, revenue, and relationship growth, while actively disengaged customers represent a 13% discount on the same measures” says the report.
Gallup describes their “customer engagement hierarchy” with five levels: 1) Rational Satisfaction, 2) Confidence, 3) Integrity, 4) Pride, and 5) Passion.
A cornerstone of assessing engagement is determining the impact that you are having on your customer’s success. According to Gallup…
“impact occurs when the B2B company, through its products and services and the breadth of its interactions with the customer, produces meaningful change in the customer’s business.”
You will know when your company is impacting when your customer’s thought bubble says something like this…
“This company knows my business and brings me new ideas. Our relationship enables me to create product innovations, new approaches to markets, and more efficient processes.”
Furthermore, the higher up you go on your customers’ engagement hierarchy, the more you can move the relationship from price to advice.
Measure your impact
Measuring your impact on your customer’s success is also a competitive advantage – it is based on information not easily obtained by your competition, and the impact can offset lower prices or discounts they might offer to steal your business.
The only way to know if your customers are engaged and have an impact is to measure it.
Gallup suggests a scorecard with these metrics, measured once a year, every year:
- 12-month revenue from the account
- gross margin
- 12-month revenue growth
- percentage of revenue from value-added services
- projected share of wallet
- customer engagement scores
- impact scores
- account team employee engagement
- value of outstanding bids/RFPs
To simplify the process, Gallup suggests starting with measuring the fewest number of customers representing 80% of your revenue.
Click here to read more about the study in the Gallup Business Journal.