State of B2B Customer - Regalix...State of B2B Customer Experience Customer experience (CX) is the sum total of the experiences between a customer and his/her supplier over the duration

Research

State of B2B Customer Experience 2014B2B Customer Experience Survey Report September 2014

State of B2B Customer Experience

Customer experience (CX) is the sum total of the experiences between a customer and his/her supplier over the duration of their relationship. It covers the stages of the customer’s buying cycle–awareness, discovery, attraction, interaction, purchase, use, cultivation, and advocacy. Forrester analyst Harley Manning defines good CX as comprising three elements1 two-way interactions that are useful (i.e. deliver value), usable (i.e. possess value that is easy to find and engage with), and enjoyable (i.e. are emotionally engaging so people want them).

The definitions of CX are many. But their focus remains the same – the customer. Thus, understanding the customer’s buying journey and ensuring that he/she has the best possible experience before, during and after the purchase of a product or solution are what CX is all about.

The State of B2B Customer Experience report analyzes the current state of CX in today’s B2B companies– from the benefits of superior CX, to the challenges preventing CX excellence, to the tactics employed by companies, to CX measurement, and much more. The survey also points out the gaps between how B2B companies conceptualize CX and operationalize it.

State of B2B Customer Experience 2014 /01 © Regalix Research

1Customer Experience Defined

Key Takeaways

State of B2B Customer Experience 2014 /02© Regalix Research

91%

91%

81%

80%

80%

76%

62%

62%

50%

49%

Marketers say integrating customer feedback with product development is key to high-quality CX

Executives report that improving online CX is their CX program’s top priority

Marketers consider CX as one of their top strategic priorities

Marketers identified advocacy and positive word-of-mouth as the key benefits of improving their CX

Marketers use Customer Retention as a key metric to measure CX program effectiveness

Marketers have yet to implement a single-pane view of customers

Marketers identified the lack of a clear CX strategy as being a significant obstacle to improving CX

Marketers expect to see their CX program budgets increase in the next 12 months

Marketers report that their executive team’s goals for CX is to differentiate themselves from their competitors

Marketers say they have an executive in charge of improving CX across products and channels

» tweet this «

» tweet this «

» tweet this «

» tweet this «

» tweet this «

» tweet this «

» tweet this «

» tweet this «

» tweet this «

» tweet this «


CX a Strategic Priority

According to Customers 2020: The Future of B-to-B Customer Experience1, CX will overtake price and product as the key brand differentiator. Brands and companies are well aware of this changing trend: 86% of marketers report that superior CX is extremely critical to a company’s growth, and 81% say that CX is their top strategic priority. However, companies are still on their way to implementing these insights. 58 percent report following a highly focused approach to CX management.

1Customers 2020

Criticality of CX to an Organization’s Growth

Overall Approach to CX Management

Extremely Critical

Somewhat Critical

Highly Focused

Somewhat Focused

Not Focused

Not Critical

Yes

No

86%

81% 58%

14%

19% 39% 3%

0%

Extremely Critical

Somewhat Critical

Highly Focused

Somewhat Focused

Not Focused

Not Critical

Yes

No

86%

81% 58%

14%

19% 39% 3%

0%

Extremely Critical

Somewhat Critical

Highly Focused

Somewhat Focused

Not Focused

Not Critical

Yes

No

86%

81% 58%

14%

19% 39% 3%

0%

Strategic Priority of CX

Customer Areas Organizations Understand BetterBy and large, all respondents expressed confidence regarding feeling their customers’ pulse. As many as 80% of the marketers surveyed stated that they could gauge which customers were their most valuable ones, while 64% reported that they had understood customers’ past purchase behaviors. Analyzing customer profiles by examining their demographic makeup was what 48% executives reported as being their forte. A strategic consequence of this, said 44% marketers, was their ability to correctly guess when a customer was likely to make a purchase.

However, driving these insights down organizational levels and coaxing operational teams to incorporate them in day-to-day tasks appeared to be an area for improvement.

Customer’s demographic makeup

Customer-journey map

Customer’s past purchase behavior

Customer’s wants, needs, likes and interests

Which customers are most valuable / valuable customers

When customers are likely to purchase / likeliness of customers purchasing

Customer’s channel preferences

48%

36%

64%

40%

80%

44%

24%

Customer Areas Organizations Have an Excellent Understand of


Customer-centric companies are aware that employing enterprise-wide tools and strategies enhances CX. CX, said 53% marketers, was not only communicated consistently but was also a senior management focus. However, only 21% reported that their employees were clear and consistent regarding the image of their target audience. There were two main reasons for this:

Company’s branding not well-defined

Of the marketers surveyed, only 23% confirmed that their company’s brand attributes were well-defined. Lack of clarity regarding the corporate brand had resulted in inadequate communication of it. This had led to organizations being unable to drive quality CX programs.

Brand attributes not clearly understood

Lack of understanding of key brand attributes persists among employees. Only 28% marketers reported that their employees possessed a complete understanding of the company’s brand attributes.

It is crucial for companies – especially the senior management – to clearly define and communicate the brand at all levels in the organization. Employees are a company’s best brand advocates. Only when they are clear regarding the brand’s vision and goal can they provide excellent service to customers.

Gap Between Senior and Other Levels of Management


Employees fully understand the key attributes of our brand28%

The attributes of our company’s brand are well defined23%

Our company’s brand drives how we design CXs16%

We translate brand attributes into specific promises we make to customers23%

Employees across the company share a consistent and vivid image of target customers21%

The quality of interactions with target customers is closely monitored21%

Primary research is used to fully understand the needs and behaviors of target customers28%

Employees across the company are recognized and rewarded for improving the experience21%

Senior executives consistently communicate the importance of serving target customers52%

Our company has a clearly defined set of target customer segments51%

Decision-making processes systematically incorporate the needs of target customers35%

Senior executives regularly interact with target customers49%

CX Positioning Within Organizations


1The Rise of Mobile Infographic2Is B2B becoming the new B2C?

Successful senior-level customer-facing executives set clear goals, objectives and expected outcomes for their CX programs. Differentiating their companies from the competition in the industry was reported as being the main goal of 50% of the executives surveyed, while differentiating themselves from all firms across any industry was the stated goal of 32% executives.

However, 9% admitted they had not identified any CX goals – alarming because that could set their organizations up for haphazard and ad hoc CX initiatives.

Steady improvement of online CX programs was a key priority for 91% marketers. This was remarkable, as online channels complement personal selling and account management, offering customers the control and flexibility to browse and purchase at their convenience, and enable B2B sellers to focus on building stronger customer relationships and enhancing new customer acquisition. Online channels also provide marketers the ability to more profitably service smaller customers, whose buying habits do not justify the expense incurred by putting a dedicated sales force in place.

However, mobile CX proved to be an area of striking contrast, when compared with the rising interest in online channels such as websites, social media, etc. Mobile, as a channel, was of relatively low priority, felt 46% of the marketers surveyed, who also reported that they were prioritizing improvements in mobile CX. With 1.2 billion people accessing the Web from mobile phones1 to search for peer reviews, conduct product research and showrooming, and seek issue resolution and complaints handling, not to mention making purchases online, availing discounts, etc, ignoring the potential of mobile CX can be perilous. In today’s business environment, mobile CX is crucial in shaping customer attitudes. A Latitude study showed that 61% customers and prospects feel brands that provide a good mobile experience more memorable, trustworthy, valuable, and likeable than the competition.

As customers transact along an increasing number of channels, to take purchasing decisions, marketers are feeling the need to aggressively improve cross-channel CX. Thus, 46% marketers said that it was a strategic priority for their CX programs. A global November 2013 Avanade survey2 revealed that an astonishing 61% B2B customers had been adopting cross-channel B2C shopping behaviors. Clearly, businesses need to orchestrate experiences across all channels, providing seamless CX for customer acquisition and retention. If companies do not provide enterprise buyers the right information using the right medium at the right time, leads may fizzle out long before they even get to the sales team.

CX Goals and Priorities


Key CX Goals

Key CX Priorities

Differentiate ourselves from all firms across any industry Differentiate ourselves from competitors in our industry

No identified goals

Keep from falling too far behind leaders in our industryMaintain parity with other leaders in our industry

Stay in the mainstream in our industry

6%9%

32%

0%

50%

3%

Improving online CX

Improving cross-channel CX

Improving mobile CX

Improving call center CX

Improving store CX

Improving phone self-service CX (IVR/speech)

Others

91%

46%

46%

32%

32%

18%

14%


Decentralization of functions

CX is intensely cross-departmental. It straddles a broad spectrum of organizational roles and responsibilities, involving participation from all departments. The survey results showed that 46% marketers accepted this as fact. However, 51% marketers said their companies lacked a single executive who was in charge of improving CX across products and channels. Some believed that the decentralization of power had led to a diffusion of responsibility for ensuring consistent delivery of quality CX programs.

Teams Responsible for CX Management

Customer Service

Product Management

Human Resources

IT

Every department is equally responsible

Others

Marketing

Sales and Business Development

11%

20%

3%

6%

0%

0%

46%

14%

Organizations With an Executive In Charge for Improving CX

Yes No

49%

51%


Preferred CX Improvement Tactics

Use customer journey maps to better understand the clients’ needs52%

Monitoring social media sites52%

Others 10%

Conducting voice of customer studies (focus groups, individual interviews, feedback etc)57%

Employing feedback tools such as annual relationship surveys62%

Companies employ various tactics to understand their customers’ expectations, needs, and wants and interpret their suggestions for improvement. The most popular tactic was tool-based feedback using instruments. While 62% marketers said they used annual relationship surveys, 57% reported using voice-of-customer studies in the form of focus groups, individual interviews, etc. Journey maps, which are essential in mapping and gaining insights into the various steps customers take as they interact with the brand during their buying journey, were utilized by 52% of the executives surveyed.

The growing importance of CX was clear from the kind of tactics companies had employed in the recent past. Net Promoter scores, Retention rates, and other single-set customer feedback scores had been used by 46% marketers for over a year. Voice-of-the-Customer programs had been deployed by 42% respondents for a year, while 36% marketers reported having an executive in charge of improving CX across products and channels for over a year.

CX Tactics and Tools


Growing Importance of CX

A voice-of-the-customer program

A companywide program focused on improving CX across channels

An executive in charge of improving CX across products and channels

A single set of feedback scores (e.g. Customer Satisfaction, Net Promoter Score) deployed across the company

Been doing for one year or more Been doing for less than six monthsNot doing but actively considering Not doing

42%8%

25%25%

42%24%

19%15%

36%8%

28%28%

46%4%

19%31%


As opposed to pre- or in-purchase consumer behavior, CX has profound impact on post-purchase behavior – the customer’s feelings or perceptions regarding the brand or the product purchased. While 80% executives identified advocacy and positive word-of-mouth as the top benefits of enhancing CX, another 80% executives said that CX triggered enhanced engagement and fostered higher customer loyalty. (Compare these with what respondents reported regarding sales and revenue: 60% marketers said CX increased sales, while 57% reported that it brought in additional revenue.)

Key Benefits of Improving CX

Accelerated conversions

Increase in sales

Increase in revenues

Enhanced engagement

Enhanced customer loyalty

Reduction in cost

Thought leadership

Advocacy and positive word-of-mouth

43%

60%

57%

77%

80%

43%

80%

50%

CX Benefits and Results


Marketers chose a number of metrics to measure quality of CX programs. As many as 80% put their finger on for customer retention – the percentage of customers who stayed loyal to the company.

But companies also looked at other metrics to determine the impact of CX quality on pre-purchase customer interactions that led to sales: 65% used sales volume, while 55% preferred number of leads generated, and 50% selected rate of conversion.

Shopping basket values0%

Others0%

Leads generated55%

Sales65%

Customer acquisition60%

Rate of conversion50%

Customer churn rate45%

Repeat sales45%

Referrals35%

Increase in traffic (website / store)35%

Frequency of visit (website / store)35%

Net Promoter Score (% of people who would recommend you to their friends and networks)35%

Up-sell and cross-sell rate40%

Social engagement measurement30%

Requests for product trials10%

Shopping cart abandonment5%

Customer retention80%

Measuring CX Program Effectiveness


Key Metrics for Measuring Effectiveness of CX Programs

The survey found that companies used a wide range of offline and online channels to reach out to and engage their target audience. Regarding the offline channels preferred, 68% marketers used direct mail and print, while 53% marketers used telemarketing. About online channels, 100% respondents said they used websites, while 88% executives used email and 80% marketers used blogs and social media.

Less than one-third respondents surveyed utilized mobile channel to engage audiences. It is crucial that marketers provide consumers a consistent and seamless experience when they move between channels. Customers are annoyed when, after purchasing a product online, they must furnish all their details again, if using the telephone. However, regarding providing consistent CX, only 20% executives surveyed reported that their online and offline CX were highly consistent, 52% marketers stating that it was somewhat consistent.

Without a consolidated view of customers’ data – their demographics, past purchase behavior, and needs and wants, and their current place in the buying cycle – companies will not succeed in establishing the personalized communication needed to convert their target audience. But 76% marketers said that they did not have a single-pane view of their customers.

Offline Channels Predominately Used to Interact with Customers

Television

Direct mail

Print media

Outdoor ads

Radio

Telemarketing

Store/branch

68%

68%

32%

16%

11%

53%

32%

Focus Still on Multi-Channel, not Omni-Channel CX


Online Channels Predominately Used to Interact with Customers

Website

Email

Social Media (Facebook, LinkedIn etc)

Social Communities

Blogs

Mobile Web

Mobile Apps

Online Chat

Mobile Messaging (text messaging)

Paid Search

Online Display Ads

Affiliate Marketing

100%

88%

80%

48%

80%

32%

32%

12%

32%

28%

44%

20%

Consistency of Online and Offline CX

Very consistent Not consistent Not sureSomewhat consistent

16%

12% 20%

52%


Customer’s Overall Experience with the Brands

Excellent Satisfactory PoorGood

16%2%

38%44%

In rating their customers’ overall experience with the brand, 44% marketers said it was good, while only 16% marketers rated their customers’ experience as excellent.

The biggest challenges in unleashing the true potential of CX programs were internal to companies. Lack of a clear CX strategy was a factor reported by 62% executives, while 55% reported lack of CX management processes. About 38% marketers attributed shortfalls in CX excellence to the lack of integrated cross-channel management that enabled single-pane views of customer behavior and interactions.

Of the executives who reported not prioritizing CX in their companies, 41% cited the prime reason as being the lack of a customer-centric organizational culture.

Challenges Mostly Intra-Organizational


Obstacles Faced While Improving CX

Others

Lack of budget

Lack of customer-centric culture

Lack of clear CX strategy

Lack of understanding about customers

Lack of CX management processes

Buy-in from executive teams

Lack of integrated cross-channel management

48%

41%

62%

28%

55%

28%

38%

10%


Most organizations – 71% of the executives surveyed – reported that they did not have separate budgets for CX management programs. One-third marketers said that CX management spends were part of Marketing budgets. 56 percent of all respondents reported allocating not more than 10% of the budget to CX management programs, but 62% marketers said they planned to increase allocations for CX program budgets in the next 12 months.

Organizations with Separate Budgets for CX Programs

YesNo29%

71%

Budget Allocation


Organizations Without Separate Budgets for CX Programs Currently Have CX Budgets Grouped Under

Marketing

Sales and Business Development

Customer Service

Product Management

Human Resources

IT

Every department is equally responsible

Others

31%

19%

0%

13%

6%

0%

19%

13%

Current Budgets Allocated to CX Programs

0-10%

25-50%

50-75%

75-100%

56%

31%13%

0%

0%

10-25%


CX Budget Allocation Over next 12 Months

Increase Decrease Stay the same

30%

10%

62%

Critical Factors for Providing Superior CX

Integrating customer feedback data with product development was critical for superior CX, said 91% marketers. Integration of customer behavior data was key to superior CX, according to 65% executives. Increasing the thrust on CX training for employees, 57% marketers believed, would help sensitize teams to customer expectations. Interestingly, 47% respondents strongly felt that mobile ought to be integrated with other channels. Despite these insights, however, marketers faced challenges in delivering harmonious cross-channel CX.


Integration of customer feedback data with product development

Integration of customer behavioral data

Predictive anticipatory customer service

Integration of mobile with other channels

Rise of customer experience training

Others

65%

91%

52%

47%

57%

0%

Factors Critical for Providing Superior CX


The proliferation of channels and devices has influenced B2B buying to become more complex and follow B2C shopping patterns. It is thus essential for B2B companies to analyze the CX dynamics of their B2C counterparts.

When marketers were asked about companies that they had the best customer experience with, majority identified Apple and Amazon, among Google, Zappos, eBay, and a few others.

CX: A B2C Perspective


Nimish, Senior Vice President and General Manager, works with CMOs and senior marketing professionals. His research focuses on customer experience management, predictive analytics, mobile enablement and other emerging trends that help customers leverage technology as an enabler of marketing and business outcomes.

Srinivasan’s research is focused on optimizing customer experiences across all channels. His research is aimed at all marketers who want to understand how they can spend their budgets more efficiently by improving customer experiences across marketing channels.

Nimish VohraSVP, Principal Analyst

SrinivasanSeethapathySenior Marketing Manager

About the Analysts


Headquartered in Silicon Valley, we help the CMO organization leverage emerging digital practices for creating marketing leverage as they bring new products and innovation to market. Regalix Research helps marketers through research-based insights, consulting and peer-to-peer programs that guide marketing strategy development and execution. Our focus is helping Technology companies leverage innovation and best practices to create real differentiation. Our analysts are practitioners with a successful track record of delivering real marketing results for both leading Fortune 500 companies as well as venture backed firms.

Regalix is an award-winning Global Innovation company that leverages technology and marketing to help companies grow. We create successful ventures with our clients through co-innovation and idea-driven frameworks that inspire companies to think different. We bring ideas to life by envisioning new companies, developing brands, engineering products, and designing technology platforms. Founded in 1998, Regalix is based in Palo Alto. Our Silicon Valley setting has enabled us to stay ahead of emerging trends in digital technology and marketing.

For over a decade, we have provided complete marketing services – Social, Mobile, Content, Multi-channel Campaigns, Technology Development, and Analytics – to companies such as CA Technologies, Citi, Apple, eBay, Cisco, VMWare, NetApp, Cypress, LSI, Keynote, and MetricStream.

For more information

To find out how Regalix Research can help you, please contact our office, or visit us at www.regalix.com

Regalix Research

1121 San Antonio Road, Suite # B200 Palo Alto, CA 9 4303 Phone: 650 - 331 - 1167Email: [email protected]

About Regalix Research

Documents

State of B2B Customer - Regalix...State of B2B Customer Experience Customer experience (CX) is the sum total of the experiences between a customer and his/her supplier over the duration