Survey finds only 29% of B2B customers are engaged – why I’m not surprised

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B2B companies are failing to engage 70% of their customer base according to a recent Gallup report.

This significant study, conducted over five years and based on responses from over one hundred thousand people, completely chimes with research by Bsquared which shows that only 8% of B2B companies have reached full “maturity” in their customer engagement.

The report concludes that the reasons for this lack of engagement are due to incumbency – the difficulty and inconvenience in switching suppliers – and also because supplier organisations depend too much on their name and brand reputation.

The result is that organisational growth strategies rely more on acquisition of competitors and not engaging and nurturing customers. This latter strategy is the one which creates strong customer loyalty and organic growth.

Some people would question if this matters because revenue and profitability can be increased through acquisition. Well, in my opinion, it does because this strategy does not automatically increase shareholder value, especially when the customers (revenue generators) leave.

Bsquared research shows that while senior management is willing to devote resource to customer engagement initiatives within organisations and employees are likely to understand the importance of customer focus, the major weaknesses lie in the organisational infrastructure and culture.

These weaknesses are:

  • Lack of harmonised processes to capture customer feedback and intelligence
  • Little consistent analysis of information gathered to support decision making
  • Not enough communication of feedback throughout the organisation and to departments and employees who could make use of it
  • Inability to act on the information provided to drive changes throughout the organisation
  • Little or no management of outcomes
  • Poor integration with corporate governance or management dashboard

Our clients who have successfully improved their customer engagement see that moving from an operational focus to a relationship focus will identify issues early before they become major problems and help with the resolution of these issues. Having a partnership approach to customers gives greater direction on both sides – the supplier understands the customer’s strategy better, will spot opportunities quicker and can demonstrate an alignment with the customer objectives; the customer will be aware of the supplier working quickly to resolve issues and the value they add to the customer’s business.

The Gallup report is able to quantify the return on investment for customer engagement with the data showing that B2B customers with high customer engagement achieve:

  • 50% higher revenue/sales
  • 34% higher profitability
  • 55% higher share of wallet

The report also concludes that:

“B2B companies across all industries are at risk of being replaced – not because of their products or prices, but because they are failing their customers”

If you are interested in finding the level of your own organisation’s customer engagement, try this short assessment for a simple and immediate benchmark.

Rob Brickle
Rob Brickle is Managing Director of Bsquared Consulting, a company which specialises in helping organisations improve their business-to-business customer engagement and loyalty. Rob has many years experience advising business leaders on change and strategy and has a passion for helping organisations maximise the lifetime value of their relationships with key customers, suppliers and other key stakeholders.

6 COMMENTS

  1. All of the weaknesses you’ve identified are pretty much spot on. I’d suggest that, possibly embedded within the study results, there’s another factor contributing to low engagement. Because of a) broad availability of content, b) time constraints on the purchaser, and c) contact limitations and restrictions imposed by groups such as Procurement, much of b2b customer decision-making is completed before the buyer and seller ever interact. Bottom line is that, although partnership and collaboration with suppliers is healthier for b2b vendors, purchasers control the buying and relationship processes. They let the vendors in, or not, according to their preferences and imposed internal gatekeeping – hence the 29% engagement level.

  2. Thank you, I’ve been long looking for some ROI numbers to support our own theory on the maturity of customer relationship management (CRM) at B2B organizations. According to our estimates, less than 3% make it to the highest maturity level while the majority stagnate at the one where they can only keep electronic profiles of their customers without making any use of rich data in their hands. It’s also interesting to look at different strategies of organizational growth – never thought of acquisitions as a rival to growing a customer base at B2B companies.

  3. Michael, I completely agree with you although we are talking about when contracts are in place. If the procurement department manages the customer-supplier relationship it’s never going to work – the supplier needs to be talking to the end user, the decision maker and the budget holder.

  4. Dzianis,

    Thank you for your comment. Strange isn’t it the way some people think about acquisitions! I can tell you from personal experience that is how some of the finance orientated people looked at growth in a publicly quoted company I was involved in. It was a disaster as they felt no accountability for the subsequent customer relationship strategy. To them it was just a sales issue and the sole responsibility of the sales people – the message was go and win more business. Net result the customers eventually left as they felt they were poorly serviced and there was no alignment with their own strategies. Shareholder value diminished and eventually the company crashed and burnt. Fortunately I had already seen the writing on the wall and left by then!

  5. Interesting post, Rob! I agree that when it comes to customer satisfaction, proper engagement at all the stages of the sales funnel is important. Here, modern technology and tool like Zoho and Salesforce CRM can play a vital role in improving customer relationship. Thanks for sharing these statistics. Really helpful!!

  6. Thanks, Really informative! Yes, this is a big issue that B2B companies are failing to engage 70% of their customer base.

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