Let’s take a look at a supplier in the B2B market which has 40 customers, positioned in the manufacturing sector who work on a contract basis. They close annual contracts where they supply a certain volume of goods or services at set prices. The supplier renews contracts on a yearly basis; with some customers they have a consolidated relationship, with others the negotiations are a cost in terms of time, resources, and margin. In the case of newly acquired customers, only after the first initial contract will it be possible to forecast how the business relationship will progress.
There are several questions that the supplier should be able to answer with absolute certainty and precision in order to assure business continuity and growth:
- Will I win the next tender?
- Am I competitive in terms of quality/price? With which specific products/services?
- Am I managing the business relationship well? Is my negotiation process efficient?
- Is my after-sales services satisfactory?
- Would my clients recommend me to other potential customers?
- What are the strengths of my competitors?
Studies show that very few customers tell us if they are dissatisfied with our products or relationship. Most (more than 90%) keep their complaints to themselves, or worse, tell them to other people in and around their network.
The result is that the supplier may receive negative feedback from the customer but most likely there has already been a negative impact on revenue, or worse, the levels of dissatisfaction have been so high that they lose the customer.
Experience has also taught us that companies do not always have the time and resources to listen actively to their customers. This is, however, the primary source from which solid empirical insights should be gathered and used in order to take effective strategic decisions.
We have created a survey which enables us to gather accurate information from customers which can then be used to guide business plans and policies aimed at consolidating customer retention and preventing churn.
Our customer value analysis survey consists of four key phases:
- Building a customized survey around the suppliers’ specific business attributes.
- Survey interviews held on a one to one basis in person.
- Data is collected and entered into a proprietary modelling tool for analysis.
- Key findings are translated into a viable execution plan.
Execution time of a B2B customer analysis survey depends on the number of customers, the type of business and the expected number of interviews. We normally work directly with the management team of our client’s customers. This gives us an unbiased assessment of many business aspects including quality, product range, response times, customer care, relationship management, strategic alignment and price.
- The survey, the specific action of asking individuals to give their feedback in a neutral environment, shows B2B customers that you are investing in the relationship, that their opinion matters therefore there is an increase in trust.
- As a third party, we can guarantee that all information gathered and analyzed is accurate and verifiable.
- Costs are optimized because you can concentrate on activities which the customer recognizes as added value.
- You maximize return on investments because you start doing what the customer really wants.
- Fact based strategic decisions are made; targeted, personalised and effective sales policies are formulated.
- New customers are attracted due to positive reviews regarding your company ‘that listens to what the customer needs’.
- The survey builds a proprietary, highly personalized data asset from which to extrapolate additional strategic guidelines to formulate better decisions.
The goal is to align the perceived value with the value offered. This means safeguarding margins by strengthening the negotiating position, limiting development only to what is necessary in order to achieve margin, keeping process or sales costs down to only what really brings ‘added value’.
It also means maximizing your return on investment; the data gathered becomes an asset which over time becomes more and more accurate supplying you with the key indicators you need to invest only in initiatives which will have a guaranteed positive impact on your growth.