B2C companies have long had to become agile and adapt to avoid losing customers to their competitors in highly transparent markets. Insights into customer behaviour and needs have been critical parameters for strengthening customer loyalty, and omni-channel strategies, AI (artificial intelligence), web content management and marketing automation software have become part of everyday business.
As a consumer, you cannot click on a link, look up a product on the web or read about a holiday destination without immediately being faced with various related web sites and ads the next time you go online or check your inbox. B2C companies have in other words managed to draw on all channels and technologies to gain more insight into the needs and behaviour of their customers, and they use these insights to be able to reach their customers from all angles.
Is Facebook the way to increased growth?
So does this mean that your B2B company should advertise on Facebook and Instagram? Should your marketing department use AI to reach your customers? Both yes and no. There is no doubt that B2B companies need to move beyond the traditional parameters such as company size and industry in their approach to customer segmentation. Valcon’s latest Growth Survey, which is based on responses from more than 60 executives with commercial responsibility, shows that B2B companies seem to have fallen behind B2C companies to some extent when it comes to focussing on the customer experience and using digital tools to gain more insight into their customers’ needs and behaviour and to interact with their customers. Many of the digital tools used as a matter of course in B2C companies would also be beneficial for B2B companies to learn more about their customers’ needs and reach their customers through more channels. The point is that it should be your insight into and understanding of your customers which should determine the strategy and channels to be used, both in B2C and B2B.
Valcon’s Growth Survey also shows that B2B executives have ambitious growth targets. No less than 80% plan to achieve these targets through sales to new markets but with their existing products and services. Focus is consequently on selling the same products to new customers, which will only be feasible if you know something about the people you are trying to sell to. Both broad and in-depth customer insight is therefore critical to success.
Efficient sales requires insight into customer needs and purchasing behaviour
This is also the strategy chosen in the company Berendsen Mats Services where Wilfred De Roos, Business Unit Director, states, “We have had a relatively conventional focus on product and service properties with respect to our customer sales, where we have not really considered how we could perhaps help solve the customer’s issues. But if you enter new segments and like us need to have a physical sales organisation, you have to be highly efficient from the beginning as it will otherwise be too expensive. And in order to be efficient, you need insight into your customers’ needs and purchasing behaviour.”
Our experiences with our clients show that there are benefits to be realised if you listen to your customers and fulfil their needs, no matter if you are a B2B or a B2C company. Increased customer insights will also provide input for the company’s product and service development and enable your company to stand out from the competition to an even higher degree than before. Customer segmentation will help promote a higher degree of customer loyalty and consequently enable you to keep your customers for longer.
How do you become better at understanding your customers?
Dialogue and communication with your customers is crucial to increasing your company’s competitive abilities, and where B2C companies typically have a slightly more distant relationship with their customers, B2B companies should focus on nurturing the close relationships. But the dialogue and communication should not only be external and with your customers but also internal in the form of more dialogue between marketing and sales as well as the rest of the organisation. Customer knowledge should be general knowledge in your organisation, and the entire company should focus on ensuring a good customer experience throughout the value chain. This requires among other things that your company does the following:
- Segment your customers according to value drivers in the market (i.e. what really creates value for your customers), which clearly characterise and differentiate your customers’ needs and behaviour. The segmentation should be both meaningful and executable and should act as the cornerstone in your company’s go-to-market strategy
- Delimit your market focus and selects areas where you want to be world champions. You then identify your target segments, which will form the basis for the company’s development
- Ensure that all business development is based on customer insights and can be traced throughout your company’s value chain from product development to marketing, sales, delivery and service. Your company’s development should in other words be driven by the needs and behaviour of your target segments
“The greatest challenges to success are not external but rather internal. You need to make quite a few practical changes. I see the internal organisation as the most tricky part because political interests can easily become part of the mix, and everyone has special interests. But we are good at involving everybody, and it works, but it also takes time,” adds Wilfred De Roos.
Customer focus should in other words not only live in the sales department but should be integrated in all parts of the company.
Your reward will be more and more loyal customers
A customer-oriented mindset is in short the key to doing better than your competitors. Our experience shows that the companies able to translate insights into their customers’ needs and behaviour into a targeted and segment-specific sales approach are the companies which will be able to realise their long-term growth targets. They are simply just better at engaging their customers, winning them and keeping them for longer.
Originally Published in Børsen Ledelse.