Building Loyalty Among Business Buyers (Opinion)

by Talk Business & Politics ([email protected]) 70 views 

If you’re in a “B2B” business that sells products or services to other businesses, then you will likely find some new research very compelling. An extensive survey of B2B customers tells us that when it comes to generating customer loyalty, how your company sells is typically more important than what your company sells.

The Corporate Executive Board, a publicly traded research and advisory firm, recently led the survey of more than 2,500 larger B2B customers nationwide.

Among the research goals was to identify the most important drivers of customer loyalty (they defined customers as “loyal” to a particular vendor to the degree they would continue buying from that vendor, consider buying more from that vendor and recommend the vendor to others).

Your gut as well as your business results might tell you that customer loyalty is tougher to come by these days. The CEB survey results would not change your mind.

Nationally, the behavior of business buyers has been evolving during the past couple of years in ways that make things more difficult for sellers. Buyers are spending less and pushing margins lower. They want more customization from vendors.

They face more internal pressure to gain consensus before making a spending decision. They increasingly turn to third-party consultants to evaluate existing relationships (which can stink if you’re the existing relationship).

The potential silver lining is that buyers also increasingly say they are open to new ideas and approaches from vendors. This means there is an open window of opportunity for sellers to stand out by demonstrating true customer focus, providing customized solutions and helping them build internal consensus.

Given that background, who’s scoring big on B2B customer loyalty these days — and how are they doing it?

The CEB reports that four loyalty factors, in increasing order of importance, were revealed in their research:

1. Value-to-price perception, including measures such as payback period or ROI;

2. Product or service delivery, or the degree to which the product performs to expectations;

3. Perceptions of the seller’s company and brand; and

4. The sales-buying experience.

Each of these factors turns out to be important, yet far from equally so.

What was striking to me about the results is the disproportionate influence that “sales experience” has on loyalty.

While the other three factors each explained between 9 percent and 19 percent of customer loyalty, sales experience explained 53 percent of the difference between low loyalty and high loyalty to vendors.

The specific types of behaviors that defined a positive sales experience included the rep offered valuable perspectives, the rep helped with alternatives, the rep helped the buyer avoid internal political “land mines,” the rep educated the buyer about new issues and outcomes, the supplier was “easy to buy from,” and the supplier built widespread support across the customer’s organization.

Is that the type of sales experience that is being delivered to your customers?

My experience as a consultant is that many sales reps still get bogged down in the world of demos, features and functions.

They work hard, press for price breaks and love to show off their products, but the CEB research shows that value perceptions and product delivery combined account for only about 28 percent of the loyalty equation. That’s not where the money is.

Many company and sales leaders aspire for their teams to serve as “trusted business advisers” to customers. The hard reality is that without adequate conversational skills, confidence, political acumen or knowledge of the customer’s business — delivered consistently in the field — customer-facing teams cannot deliver the sales experience that drives repeat business, additional business or recommendations.

Are your recruiting efforts, training and incentives aligned accordingly?

Jim Karrh is the founder of Karrh & Associates and director of MarketSearch, both of Little Rock. Email him at [email protected].