In any industry, it’s common knowledge that it’s much less expensive to keep existing customers than it is to find new ones. In manufacturing and distribution specifically, customer retention is a key performance indicator that cannot be overlooked.
If your organization is suffering with customer attrition, it may not always be easy to uncover the reasons you’re losing those relationships. Distributors in particular may see decades-loyal customers suddenly leave for greener pastures. Sometimes it’s simply due to new competition but in many cases that’s the easy answer. To protect revenue, and drive even more growth, you have to determine the real reason it’s happening. But first, you need to ask yourself…
How well do you really know your customers?
In many cases, particularly those where the seller-buyer relationship has existed for years, customer organizations may have evolved in ways you’re not aware of. And previously “guaranteed” contracts may not be quite as locked as you think. It’s important to regularly review who your customers are, what they do, and how well they like you.
To begin with, try to create a customer brief for each of your key relations that identifies some important parameters including:
- Customer segmentation – Make sure you really understand their business the way it operates today, not 5-10 years ago. Understand their product needs, and how things may have changed.
- Customer satisfaction – Don’t rely only on what sales may be saying. Perform some kind of feedback loop, like a survey, that helps you understand how happy they really This should be evaluated on a regular basis, to identify gaps and address them.
- Quality Perception – Overall satisfaction is just one metric to consider. You must understand how your customers evaluate the people they deal with on a regular basis, the performance of your products, your catalog offering, and even the value of your overall brand. Most importantly, know how they evaluate your digital presence. Simply put, you have to make sure the way they order is how they want to
How can you improve your relationship with existing customers?
In many cases, B2C-based commerce strategies focus only on increasing revenue. And yet in B2B commerce, additional primary goals include increasing efficiency and reducing your cost-of-sales. Increased revenue then becomes a natural by-product achieved from accelerating the productivity of everyone involved in the buying cycle. That’s why a solution specifically built for B2B will drive more revenue, while B2C-based technology merely provides bells and whistles that are certainly pretty, but not very helpful.
Knowing that a major is to increase efficiency is the first step in creating stronger, longer-lasting relationships and building digital trust. Several components will help you achieve higher efficiencies:
- Effective Search – Your customers need to find what they need effectively and efficiently. Increasingly, they’re also looking to do work outside of normal business hours. Your digital presence and customer service capability needs to accommodate their desired work hours, not yours.
- Robust Capability– Customers need the ability to interact whether they’re using a smartphone, tablet or desktop computer. A fully robust native mobile app is an expectation, not a “wish” today. Customers have to be able to find unique pricing, information like MSDS, CAD drawings and other relevant content. They want to pay invoices online, and track shipping. In a nutshell, they’ve brought their personal buying experience expectations into their professional lives, and you need to be able to deliver on those user experience expectations.
- Roles-Based Process – B2B commerce involves multiple people and roles whose involvement may fluctuate depending on the size of the purchase, the specific step in the buying cycle and a host of other factors. Developing customer segmentation based on individual responsibilities and experiences can be very helpful when pursuing better customer retention. For example, researchers may need the ability to quickly create lists of relevant new products based on customized catalogs and searches. Buyers may need to see contract details like purchase approvals, or pricing. On your end, salespeople may need to use the system in a way that supports higher-ticket transactions, and a more consultative approach to sales.
- Unique Customer Experiences – Often, larger customers need to see a branded experience that doesn’t require logging into multiple portals. Above and beyond custom catalogs, the search, ordering, shipping and other logistics need to be created specifically for their needs and wants. A B2B platform that provides most of the basic B2B commerce functionality out of the box will create more time in your project plan to create those custom, unique buying experiences.
Are you making your customers’ lives easier?
Industry analysts, from Forrester to McKinsey, are predicting that within B2B industries the customer experience will soon rule the buying decision, not the price. That’s why we like to say that convenience is “winning” over price. As a company, are you making it easier for customers to buy from you, or just trying to sell them more stuff?
Loyalty is part of basic human nature, but the nature of loyalty is evolving as digital transformation marches on. Buyers preferences and needs (as well as other roles in the process) are changing along with generational shifts in the workplace. Loyalty is no longer between salesperson and customer; loyalty is earned by the customer experience whether it’s self-service, full-service, or a hybrid process. Manufacturers and distributors need to be focused on solving their customers’ problems and providing an experience they can’t get anywhere else.
Knowing your customers, how they perceive every aspect of your brand, and most importantly what they want are the keys to retaining customers and building loyalty in the 21st century. Which leads us to our last point, something that hasn’t changed and likely never will. In your business, more loyalty always equals more revenue.