What is it like to be a customer when both you and your suppliers are manufacturers? More than meets the eye. And a large percentage of the world’s gross domestic product comes from these customers. You’ll find them in industries such as these: aviation, chemicals, defense, computer hardware, construction, energy, industrial automation, machinery, medical devices, and packaging, just to name a few.
Industrial customers have a lot riding on most things they buy. High-pressure components of their customer experience include their reputation, productivity, time-to-market, cycle time, assets usage, opportunity cost, substantial financial risk, and career paths.
B2B Customer Loyalty
B2B buying decisions are often complicated. Putting all your eggs in one basket, so to speak, may not make good business sense. A major equipment manufacturer once found themselves in more than a tight squeeze when a supplier of a critical, unique part had a fire in their factory. It took the supplier several weeks to get back on their feet, and this customer was, of course, one of many whose orders the supplier needed to expedite. Naturally, there was a snowball effect of bad economics for every business downstream. B2B customers are leery of granting “sole supplier” status. And rightly so. Contingency plans are a must in life. It almost always makes more business sense for critical components to have at least two suppliers. Getting preferred supplier status is a huge coup for a B2B supplier.
B2B Decision Influencers
With so much at stake, the selection of trustworthy suppliers who match your requirements can’t be left to individual buyers. First of all, there are many aspects of a purchase that the customer must consider: safety, quality, financial, regulatory compliance, shipping and packaging for reliable yet easy receiving, preferences among those who will be handling the product in their day-to-day work, overall fit with the company’s or plant’s strategy (including long-term relationships with their customers and other stakeholders, environmental stewardship, etc.), scientific specifications, and downstream customer concerns. Roles often include project manager, foreman, estimator, purchasing manager, general manager, facilities, IT, legal, and manufacturing. As such, “it takes a village” to decide to buy: what, when, how much, from whom, and under what conditions. Some of these decision influencers are known to a typical supplier, while others have behind-the-scenes say-so that can derail a deal.
To infuse some sanity into all this complexity the customer company is likely to establish a Supplier Management group, which may or may not include the Procurement department. Usually the roles are separate. Supplier Management establishes standards for qualifying as a supplier, conducts audits of product at the supplier factory or upon receipt, conducts business management and financial viability audits, provides certification levels to qualifying suppliers, and so forth. Procurement typically pursues attractive terms, handles the purchase orders and other paperwork, and works with Legal to minimize risk. Note that the sanity infused by Supplier Management is generally for the customer’s benefit, and often creates significant administrative burdens on suppliers, and also may obscure the reality of all the decision influencers.
The greatness of B2B purchase complexity, risk, and stakeholders usually leads to extensive interactions between the customer and supplier companies for a long time after the initial purchase. There’s much more than a call center involved. Engineers may be requested formally or informally to visit their counterpart (electrical, mechanical, chemical, industrial, software, etc.) to work out the details in creation and use of the product. Specialists at one or both companies may be called in to conversations with the supplier’s account team, or ad hoc as needs arise. As is frequently the case with call centers, customers typically share a LOT of extremely high-value anecdotal information that seldom gets captured in these informal interactions, and even more rarely is acted upon by the group that could prevent recurrence of an issue or be proactive with customers’ creative ideas.
B2B Customer Experience Influencers
While a consumer may visit various geographies within a short span, B2B customers are omni-present in numerous geographies. This makes consistency of the customer experience even more important, as inconsistencies can erode trust. Respect of local nuances is appreciated, while similar responsiveness, quality, and affordability are desired globally. B2B customers talk with one another at trade shows, symposiums, and trade association events. Sometimes one customer company takes the lead on an issue that is followed by the others. In some B2B industries, technology alliances are formed between a couple or few customer companies to share risk, combine resources, or meet a need of their collective customers. In all these cases, suppliers must be savvy about all of these influences in order to stay relevant, serve customers well, and make the most of emerging opportunities.
High Stakes Winners
What’s B2B customer experience like? It’s challenging! Building strong relationships with suppliers is highly desirable, especially when it comes to critical components. B2B suppliers who have the best understanding of and “best fit” for their customers are obvious winners in this serious world of high stakes.