closing the gap

5 Ways Suppliers Are Closing the Customer-Experience Gap

Newly empowered customers want more—and not just from the Amazons of the world.

Suppliers worldwide are feeling competitive heat from their B2B customers as rapid changes in the consumer space drive new customer demands. Empowered customers expect more and want to buy at the time and through the channel of their choosing. Many suppliers are paying the price in customer experience as they struggle to meet expectations, lagging behind their consumer counterparts. They tend to score, on average, less than 50% in customer experience index ratings, compared to B2C organizations that tend to score between 65% and 85%. Why?

By Spencer Lin

B2B suppliers certainly know customer experience is important. In fact, IBM’s recent study of 375 industrial product manufacturers revealed that two-thirds of business suppliers believe it is vitally important to differentiate brand. Yet only a third said their organizations are good at it. These companies are also facing large gaps between objectives they identify as important—such as increasing market share, decreasing existing customer attrition and increasing share of wallet—and their current proficiency at acting on these objectives. What can manufacturers do to close these gaps and stand out?

We discovered that companies that self-reported having a high reputation for delivering an excellent customer experience delivered better financial performance than industry peers—five times better for both revenue growth and profitability. And all had something else in common beyond strong financial metrics. They share common practices for brand differentiation. They all excel at identifying customer engagement objectives. They approach design, culture and strategy differently. They view mobile, collaboration, automation and AI technology as critical enablers for digital transformation of the customer experience.

There are five concrete actions B2B manufacturers can take to learn from market outperformers, improve the overall customer experience and move into a leadership position within their industry:

1. Define a unifying vision and treat experience design as a core philosophy.

Experience design takes an empathetic approach that puts the needs of users at the center of projects by looking at the “why” of a problem and asking questions about the specific challenges that need to be solved. The leaders we surveyed are pivoting from being product-focused to experience- or customer-focused. They help employees internalize a customer-centric vision that is clear, memorable and inspiring. Sixty-five percent of leaders in this area treat experience design as a core philosophy or have a dedicated program that crosses multiple business units with multidisciplinary teams, compared with 12% of their peers.

Rather than be reactive, 70% of leaders also tell us they are revamping customer-facing functions with strategies like empowering customer service representatives to solve customer issues. Leaders further refine the approach with detailed customer segmentation to really focus on what each type of customer needs.

2. Orchestrate digital customer experiences through unique models.

Leaders use agile methods to iteratively test digital experience with customers and make sure that the digital customer experience eliminates underlying customer pain points. For example, customers might complain that they can’t easily find information about a product or service. Rapid prototyping planned digital experiences using A/B and standard usability tests can quickly show if the targeted experience meets the actual customer need. The digital experience can be quickly tweaked in the next two-week iteration before it is released to customers, thereby lowering the need for costly design cycles later.

Some large companies appoint a chief digital officer, charged with responsibility for the digital transformation of customer experience. This position shares ownership and works in collaboration with the chief customer service officer, chief technology officer, chief information officer and chief innovation officer. The executives are supported by cross-functional teams that include both traditional customer-focused functions such as customer service, marketing, analytics, customer insights and sales and non-traditional functions including operations, IT and digital services. This integration ensures the digital customer experience is an underlying business driver for the whole organization.

3. Commit to experience and tap additional channels. 

Leaders connect across multiple forms and channels with brand content. They share product and service content with customers. They are willing to experiment with different tactics. In the next two to three years, leaders say, blogs (79%), search engine (78%), buyer reviews (74%), social media (67%), personalized recommendations (66%) and professional industry sites (66%) will be the top six means to engage with customers.

To address this evolution, companies need to train existing employees or invest in content skills including content management, content development, interactive/digital design and community management. Concurrently, they need to hire data-minded talent with skills in advanced data analysis, data visualization, mathematical modeling, data acquisition and social media mining and analysis who can work side by side with customer-facing staff. Relevant skills can also be contracted, outsourced, crowdsourced or obtained through partners.

From a sales perspective, leaders provide multiple purchasing channels for customers that go beyond in-person sales. Digital commerce is playing a central role in a brand’s ultimate success, providing seamless connectivity between functions to enhance the buying experience between in-person and online. E-commerce, via manufacturer’s websites or third-party online marketplaces that allow manufacturers to take advantage of established e-commerce platforms, is growing.

4. Infuse data insights and integrate digital technologies for better performance.

Leading companies view technology as a critical enabler to digital customer experience. More leaders are using video chat in customer service. Three-to-eight times more leaders have implemented mobile, collaboration, automation and AI in marketing and in sales. Cloud computing is used to run marketing applications and maintain data around customer touchpoints. Mobile technologies are applied for ubiquitous access to information and help managing disruptions. Automation helps improve productivity of customer-facing functions and help sales manage lead distribution and prioritization. Artificial intelligence provides insights, powers experiences, automates personalized promotions and integrates external data so that marketers can identify prospects and understand customers at an individual level with scale.

5. Create the right team

Leaders address customer experience as a team sport both externally and internally. They develop a broad ecosystem of partners to leverage. They execute with agility. Over three times more leaders use agile methods to deliver improved customer experience. Agile methods focus on the “how” of project delivery, breaking up the planning and scope of work into smaller units. With the customer journey as the driver, teams identify customer needs, design engagement, and implement delivery. They can then make modifications based on real-time feedback from testing, iterating and continuously improving throughout the development process.

Companies may also consider aggregating select function activities to take better advantage of economies of scale and insight. For example, in sales, leaders have put digital payments, customer communications and back-office customer support into shared services centers of excellence or outsourcing contracts.

Customer experience is a journey for all companies. The road to improved customer-centricity requires suppliers to rethink their approaches for strategy and culture, channels, data and insights, technology and organization and skills. By taking these steps, engaged companies can close the ‘B2C customer experience gap’ and embark on a journey towards meeting their customer experience aspirations and providing their customers with the personalization, automation and smarter means to seamless transactions and customer lifecycle efficiencies that they crave.

This article originally appeared in IndustryWeek.

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