The future of customer experience: How B2B companies are building an ‘Offer You Can’t Refuse’
According to research by B2B International, only 14% of large B2B companies have a culture in which the customer experience is deeply ingrained. And according to McKinsey, B2C companies typically score in the 65 to 85 percent range when it comes to customer experience, while B2B companies average less than 50 percent.
And yet, according to that same McKinsey, the benefits of a fantastic customer experience for B2B companies are high:
“In our experience, customer-experience leaders in B2B settings have on average higher margins than their competitors. In cases where companies have undertaken broad transformations of their customer-experience processes, the impact among B2B and B2C players has been similar, with higher client-satisfaction scores, reductions of 10 to 20 percent in cost to serve, revenue growth of 10 to 15 percent, and an increase in employee satisfaction.”
But when I talk to B2B companies about the matter, the response I receive more often than anything else something is along the lines of “We know Steven, but it’s a lot easier for B2C companies to focus on this experience than for us.” That’s why I wanted to share the B2B company cases below that, each in their very own way, are building “An Offer You Can’t Refuse” for their customers, in each of the three strategies: offering the ultimate convenience, becoming a ‘Partner in the Life’ and ‘Saving the world’. Check my book trailer If you’re not familiar enough with these 3 strategies.
Offering the ultimate convenience
Kabbage – 5,000 times faster
It usually takes a typical bank 20 days to approve of a small businesses loan, which is a horrible experience if you are so eager to keep track of the future of your company. Financial-technology start-up Kabbage understood that frustration and solved it with a system where it requires just 7 minutes to approve a small-business loan which is nearly 5,000 times faster than the industry standard.
ING & Shipster: Better access to information
Sometimes offering convenience is just as simple as offering better access to information. The Netherlands-based bank ING for example enables its retail and corporate clients access to real-time account overviews and customized reporting, along with the ability to process various transactions from any location. Offering this service required a significant transformation of its systems and processes but after just one year, ING had grown profits by 23% and increased its share price by 15%. Another great example is how logistics start-up Shipster ‘recycled’ the tracking and tracing apps used in retail to the B2B world of international shipping: it puts live tracking of international shipments on apps for web and mobile phones for all its customers.
Hewlett-Packard – friction-free buying
One of the best way for offering customers the ultimate convenience, is the use of the subscription model, where the customer only has to take an action once, to launch the service. After that, everything is taken care of. For its enterprise customers, for instance, Hewlett-Packard identified a gap in the market for a friction free ink replenishment service and launched its Instant Ink offering which delivers ink before the cartridge runs out. On top of that, it provides attractive cost savings of up to 70% through the subscription program with its high yield cartridges.
Becoming a Partner in Life
Of course, becoming a Life Partner of customers and answering to their hopes and dreams takes on a slightly different twist here, as the end-customer this time is a large entity like a company. But, the way I see it, becoming a Partner in the (Business) Life of companies, entails helping them becoming better versions of themselves, growing, becoming smarter or helping them helping their customers. There are several ways B2B companies are stepping up to that challenge.
The Belgium-based Aertssen – a customer of my company nexxworks – operates in the construction and infrastructure industry, not exactly an industry known for its digitization efforts or customer experience. Its ‘Partner in Life’ strategy started in a very pragmatic way. It wanted to streamline the tedious and stressful internal process of renting heavy machinery for their projects. This could only be done ‘efficiently’ by phone and so Aertssen decided to completely digitize this repetitive and time-consuming task. The result was great: its planners ended up renting the materials 75% faster, and making 55% fewer mistakes. This made the management realize that its customers, partners and even competitors had the very same ‘frustration’ and so they crossed the industry lines from construction to the platform rental business in order to ‘solve the whole problem’ of their network. So they launched the platform Smartyard, enabling others too to hire or rent out heavy construction machinery a lot faster, with less friction. Put like this, you could mistake their move for an “ultimate convenience” strategy. And it is, but they are planning to go far beyond that: they plan to create additional value for their customers by returning the data they collect through the platform in a structured way. This information should help them make investment decisions based on market insights and grow in much more informed ways.
Salesforce launched Work.com, a hub of new technology solutions and resources to help its B2B customers to reopen safely, re-skill employees and respond efficiently to the COVID-19 pandemic. This is not just a convenient and helpful solution for its customers, it focusses just as much on wellbeing, health and reskilling in times where all the latter have become absolutely crucial. In short, it helps them grow as a company and helps them help their own customers and employees.
Another great example of a company that helps its customers’ businesses grow is Alibaba. It’s often called the Amazon of China, but it has a very different approach that is very ecosystem-driven. Through its e-commerce marketplaces Taobao (consumer-to-consumer), Tmall (business-to-consumer) and Aliexpress (aimed at international shoppers), it functions as a network that empowers a huge group of small businesses with the tools and platform they need to thrive. The underlying idea is that “if you help others grow, you’ll grow with them too”. In 2004, for instance, it launched Aliwangwang, an instant messaging system to connect buyers and sellers with each other and also provided free business trainings to sellers. And it is constantly looking out for ways to enable and train its customers.
Saving the world
Cisco is one of those B2B companies that has a very strong Saving the World strategy. It focuses on education to help solve society’s toughest problems with Cisco Networking Academy, for instance, which builds IT and career skills that empower people to thrive in the digital economy. And through grants and donations of its technology, the company helps improve access to quality education worldwide. It also helps create IT careers for youth in Asia, support entrepreneurs in Latin America, and enable access to financial resources in Africa. It also continuously seeks ways technology can reduce energy use and greenhouse gas emissions. In 2019, it boasted a 49% reduction in Scope 1 and 2 greenhouse gas emissions, 83% of energy came from renewable sources and 1M metric tonnes of supply chain greenhouse gas emissions was avoided. Last but not least, its technology help disaster-relief teams move faster and provide vital services to more people when disasters strike. The company helps making the world a better place from several angles.
But Salesforce is perhaps the most well-known B2B company with a ‘Saving the World’ strategy and has been so from the moment it was founded. Even before the company had a working product, in the earliest planning documents, it designed the 1-1-1 philanthropic model that set aside 1% of Salesforce’s equity, and 1% of its product and 1% of its employees’ time to the community. As the company has grown, that model has serious financial teeth now, and Over 8,500 companies have since joined Salesforce in this pledge.
Mark Benioff, its CEO, is a strong believer in corporate social responsibility: “Now being a CEO means that you’re taking care of all stakeholders,” Benioff told Fast Company in 2019. Benioff’s activism includes bold stands on homelessness in San Francisco in which he believes that if companies and government work together and invest enough money, they will be able to solve homelessness.
He clashed with a lot of other tech leaders on Proposition C, a 2018 San Francisco ballot measure that would tax the city’s largest businesses in order to support homeless services. While Prop C’s implementation is stuck in the courts, Benioff has doubled down on his commitment to the issue. In 2019, he established the Benioff Homelessness and Housing Initiative to study homelessness intervention strategies.