Now is absolutely the time we need to start treating our Business to Business Accounts the same as our Business to Customers accounts writes Strategies for GrowthSM Bill Pollock...
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Now is absolutely the time we need to start treating our Business to Business Accounts the same as our Business to Customers accounts writes Strategies for GrowthSM Bill Pollock...
Until only recently, the services purchase/acquisition cycle was a fairly closed-loop, highly structured, and oftentimes formal process. Potential clients obtained most of their decision-making data and informational input directly from the vendors, sought the top-level recommendations of published hardware and software buyer’s guides and directories, and picked up on the latest “buzz” at industry trade shows or via services trade publications – all were and still are powerful and rich resources (albeit, virtual trade shows will just have to do until the end of the current pandemic) .
This was the way services decisions had been supported and made for decades. But then, the Internet and social media changed everything – including the means by which information is gathered, reviewed, and analysed, the criteria by which potential vendors are evaluated and selected, and even the way in which customers position themselves as potential buyers in a largely buyer’s market.
The White House Office of Consumer Affairs has reported that dissatisfied customers will tell between nine and 15 people about their negative experience, with about 13 percent telling more than 20 people. Satisfied customers, on the other hand, will only tell about four to six people about their positive experience. Therefore, according to the report, customer service failures are likely to be communicated two-and-a-half times more often than customer service successes. As a result, services organisations will need to maintain a ratio of roughly 2.5:1 satisfied vs. dissatisfied customers just to break even in terms of word-of-mouth customer service feedback (i.e., 71 percent customer satisfaction).
In all likelihood, customers will become even more critical – and communicative – about their service experiences in the future, based on the widespread usage of social media tools and technology devices. This presents a new front for services organisations to address in an increasingly social media-influenced marketplace; however, there are many other challenges that also must be addressed.
The Three Most Daunting Challenges to Field Service Organisations
The three most uniquely daunting challenges faced by services organisations over the past few decades include the following:
- Transforming themselves from manufacturer/OEM cost centers to strategic lines of business (i.e., with their own executive-level management and P&L responsibility).
- Shifting their operational focus from company-centric to customer-centric, whereby the customer represents the focal point of their universe.
- Learning how to treat their business-to-business (B2B) accounts with the same high level of service and support that other vendors use to treat their business-to-consumer (B2C) customers.
Surely there have also been other equally daunting challenges facing the services industry throughout this period, such as:
- The globalization of business operations
- A volatile cycle of economic upturns and downturns
- The proliferation of new technologies and applications
- The continuing shakeout of marginal performers, and the resultant consolidation within market sectors
- The widespread growth of social media for business purposes
However, while all of these business game-changers ultimately impact all business segments, the three challenges in the op list above focus uniquely on the services sector.
The Industry’s Success in Dealing with These Challenges
The main distinction between these two sets of challenges is that while the general influences of the economy, technology, market consolidation, and social media continue to impact all businesses from the outside in, the three challenges unique to the services industry are serving to transform services organizations from the inside out. As a result, the entire complexion of the services sector continues to morph on a virtually constant basis.
Let’s examine each of our three challenges with respect to their impact on the services industry.
Over the past 25 years or so, most services organisations have come to recognise that the “service as a cost center” business model is essentially outdated. Myriad books have been read – and conferences, seminars, and workshops attended – by enough managers to assure that the vast majority of services organisations have been able to successfully make the move from an historical manufacturer/OEM cost center to a more state-of-the-art profit center. All it took for this transformation to take place was for some of the larger and more progressive organisations to successfully bridge the chasm, coupled with the creation of third- and fourth-party organisations with no other line of business aside from service, and the ultimate introduction of a whole new genre of technology-driven, leaner operating upstart companies that did not carry the cost-center mindset of their predecessors.
"Many of the service executives, managers, technicians, and general services staffs have never looked previously at their business accounts as “consumers” in the past..."
Shifting from a company-centric to a customer-centric focus was the next most daunting challenge to be addressed by services organisations on a wide-scale basis – though not always voluntarily. Some objection came from those steeped in a long-term R&D tradition where technology, manufacturing, production, and processes took precedence over customer service and support. Nonetheless, the need to focus on the customer has been satisfactorily addressed by the vast majority of today’s services organisations.
The third challenge, however, is perhaps the most daunting of all, because it flies in the face of every marketing and promotional primer ever published, read, or taught. That is, the importance of treating your B2B accounts as if they were B2C customers. Many of the service executives, managers, technicians, and general services staffs have never looked previously at their business accounts as “consumers” in the past. But that’s what they really are – and that’s how they act when they collect information to support their buying decisions when they evaluate alternative vendors and products, narrow their “long lists” down to “short lists,” and make their final purchase decisions and/or recommendations.
In the past, businesses typically employed an entirely different process than consumers did to make their business-related product and service decisions. There was generally an elongated evaluation process, followed by an equally elongated negotiation process, ultimately leading to an acquisition decision that was approved by a committee or purchasing department. Business managers generally utilized resources such as comparative product/service reviews produced by research analyst firms to compare alternative offerings, then they typically would dissolve into committees and groups chartered to make the final purchase recommendations. Sales calls and marketing collateral provided by each of the short-listed manufacturer/OEMs and services organisations were also relied on heavily (as they still are today).
However, the overall process was oftentimes slow, repetitive, incomplete, and short of the full complement of information it should have taken to support the decision-making process. Further, many of the short-listed vendors would typically only compare their products and services to those offered by their closest “like” competitors, oftentimes ignoring some of the otherwise applicable “new technology” solutions providers. But, as they say, times have changed.
The Convergence of B2B and B2C:
The primary reason why the “like-company comparison” no longer holds up can be explained in just a few words and selected brand names, e.g., the Internet, Google, LinkedIn, Twitter, Amazon, QVC, Federal Express, UPS. Of course, there are many other paradigms that may be just as illustrative, but these are representative examples of what has helped transform the “B” aspect of the B2B equation into a “C.”
The Internet has become the great equalizer, i.e., the means by which businesses (the B’s) and consumers (the C’s) have been afforded equal data and information access, availability, and use. Prior to the introduction of the Internet, businesses and consumers operated in two entirely different worlds; but now, businesses and consumers have an equally powerful tool to support their product and service decision-making processes.
Further, search engines like Google, Yahoo!, Bing, and others can equally empower both types of customers in their ability to search out the best products and services available to them. No longer would businesses need to rely primarily on printed or electronic buyer’s guides, directories, and product/service overviews published by research analyst firms. Nor would consumers need to focus exclusively on Consumer Reports, newspaper articles, and television advertising to obtain their purchasing information. Not that these sources aren’t rich and resourceful – they entirely are. But today, there are numerous websites, blogs, trade associations, and general e-mail communications, posts and tweets that are powerful additional sources of comparative information that is helpful in making a final decision.
"The question arises: Wouldn’t it be nice if all of the B2B business vendors offered the same capabilities as the B2C vendors?"
Then there are the companies that have taken the functionality of these Web-based tools to the highest levels. Companies such as Amazon that, every time you log in, tell you what you’ve bought in the past; what others who have bought the same items as you have also bought; what new items similar to the ones you have bought in the past are now available, and so on. They can even provide you with time-related reminders for purchasing (e.g., birthdays, holidays, anniversaries) and alternative shipping options for the items you have purchased.
The question arises: Wouldn’t it be nice if all of the B2B business vendors offered the same capabilities as the B2C vendors? For example, letting their customers know what comparable businesses have ordered in terms of related items, bundled product/consumables packages, extended service coverage agreements. Or reminding them that they may need to renew or extend their service agreement, stock up on consumables, or consider migrating to a newer model or version. Some companies already provide these services, but certainly it would be great if there were more businesses that did.
Companies like QVC and the Home Shopping Network have also maximized their use of the Internet’s communications capabilities by making not only the buying process easy – but the returns process as well. For example, you might purchase an item from QVC via telephone, computer, or electronic device. Once you obtain a customer number, it’s all very easy to place an order. The overall customer experience is then heightened even further by the high level of communications provided to the consumer, receipt of a near-instant e-mail confirmation of the order, subsequent follow-up e-mails when the item is shipped, if it is on backorder, etc. Even the return process is easy with companies like QVC. If it doesn’t work out, one can simply return the item in the same packaging along with the supplied mailing label, with return-receipt and credit notification sent in a timely manner.
Again, an equivalent B2B experience here would be an outstanding way to focus on your business customers.
The Permanent Emergence of the “C” Account
It is no longer good enough to tell your accounts that your organisation is no worse than any of your similar competitors (the “like-company comparison). If you do, you will risk hearing something in return such as, “I understand that. But what I don’t understand is why you can’t provide me with as much past, present, and future order information as Amazon or process my return – and return credit – as quickly as American Express!”
By simply delivering the same-old, same-old treatment to your accounts, you are guaranteed to continue treating them as B’s. However, your accounts have become accustomed to being treated as C’s. Your customers – empowered by the Internet, its evolving technology, and the explosion of related apps, devices, and social media tools – have already crossed that bridge; now’s the perfect time for your services organisation to do the same!
- Read more exclusive FSN features from Bill Pollock @ www.fieldservicenews.com/blog/author/bill-pollock
- Read more about Service Innovation and Design @ www.fieldservicenews.com/blog/tag/service-innovation-and-design
- Read more about Leadership and Strategy @ www.fieldservicenews.com/blog/tag/leadership-and-strategy
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As service becomes a core differentiator amongst competing for business the ability to sell the value of service is an essential facet of modern business strategy. Bill Pollock, President of Strategies for Growth discusses the nuance of marketing...
As service becomes a core differentiator amongst competing for business the ability to sell the value of service is an essential facet of modern business strategy. Bill Pollock, President of Strategies for Growth discusses the nuance of marketing the value of your service and how to get it right...
Most of the customers comprising your Field Service Organisation's (FSO) customer base probably already love your organisation, and its products, services and support! But the rest of the marketplace may not even know you exist! All things considered, if you can get the rest of your targeted market to become just as aware of your organisation as your customers are, you may find that selling to them is easier than you might think!
Any marketing expert will tell you that a service organisation's market awareness and perceptions are among its most valuable assets, but that they each require high levels of maintenance and a great deal of attention. However, unlike other important contributors to an organisation's overall economic well-being, market awareness and perceptions are almost always entirely out of its control, except for the ability to continually attempt to shape, nurture and cultivate them in the eyes of the marketplace.
Two Alternative Market Awareness and Perception Scenarios
There are basically two alternative scenarios where your organisation may operate in today's marketplace. The best way to explain them is to present two side-by-side examples for the purposes of comparison:
Example 1: An FSO with 100% Market Awareness, and a 10% Market Share
In this first example, the organisation has near total awareness in the marketplace (i.e., virtually 100% name/brand awareness or recognition), with an approximate 10% market penetration rate, or share. In other words, in the marketplace in which it presently serves, virtually all of the potential customers know who the company is, but only 10% choose – for one reason or another – to become a customer. The net result is that of the 100% or so of the marketplace that is aware of the business, only 10% have been “converted” to customers. This is not a bad “conversion” rate, but there is nowhere else to go! The market potential for the FSO is already saturated! Basically, everyone is already aware of the company, but 90% of the universe has decided not to go with it.
Example 2: An FSO with 25% Market Awareness, and a 10% Market Share
A second example reflects an organisation with only one-quarter (25%) of the market awareness manifested in Example 1. However, the organisation has been able to successfully “convert” 40% of those who are aware of its offerings into customers – virtually four times the “conversion” rate of the organisation in Example 1. What’s even better is that – all things being equal – once the remaining three-quarters of the market is made aware of the company's products, services and support (i.e., through ongoing marketing and promotion, telesales, etc.), it will also be likely to gain up to a 40% market share before its market potential becomes "saturated".
Of the two alternative examples, Example 1 is clearly less attractive in that although nearly everyone knows who you are, your market penetration – at roughly 10% – remains fairly low. In this case, the only way to gain increased market share is to “re-educate” your non-customers as to who you really are with respect to your overall image and value proposition. The problem is, however, that they may already have formed negative perceptions of your organisation, and once formed, a negative image becomes very difficult to change.
Can you honestly say that a majority of your targeted marketplace has a clear, accurate and complete awareness of who you are and what you have to offer?Example 2 is a much better situation since the organisation is experiencing a much higher customer “conversion” rate (i.e., 40%, compared to only 10%). In this case, the best way to increase overall market share is to also make the organisation's name known to the “other” three-quarters of the marketplace through targeted marketing and promotion. Again, all things being equal, there will be a strong likelihood that the same ratio of customer conversion (i.e., 40%) will also apply to this "new" market base – thus leading to a potential quadrupling of the historical market share (i.e., from 10% to 40%).
In which of these two alternative scenarios is your organisation presently operating? If it is the first of the examples, then you will need to embark fairly quickly on an intensive market image reengineering, re-education and enhancement effort. If it is the second, then the primary focus should be on increasing overall market awareness – and this is typically much easier than trying to "re-educate" a market base that has already made up its mind!
The questions to ask yourself are: “Can you honestly say that a majority of your targeted marketplace has a clear, accurate and complete awareness of who you are and what you have to offer?” and “Is it possible that once an expanded market base learns about you, that they may be just as likely to become customers as your already "aware" market base?” These are key questions that should require honest answers!
Merely tracking trends in your organisation’s market awareness and perceptions over time does not, in and of itself, provide you with the information you will need to improve your overall market image and share. However, without doing so, you will not be able to effectively identify where you strengthen your ongoing marketing and promotional campaigns, or where you can most successfully identify and cultivate new business development opportunities.
The results of a targeted Market Awareness and Perception study, converted into a practical tactical action plan, can provide the organisation’s management with all of the tools it requires to work immediately toward increasing existing levels of market awareness; identifying areas of awareness and image requiring further strengthening; improving its perceived market position within its targeted marketplace; and lead to the cultivation and development of new business opportunities.
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