Customer at the Heart

How B2B leaders build successful Customer-Centric Organisations

John O'Connor, Peter Whitelaw

• Publisher: Publicious Book Publishing
• Year: 2020
• ISBN:
  9780648824305
• Edition: 1
• Topic: Business
• Subtopic: Customer Relations
• Index: Business

About ‘Customer at the Heart - How B2B Leaders Build Successful Customer-Centric Organisations

Could a business leader learn anything about customer centricity from 15 senior executives who have been there and done that?

John O’Connor and Peter Whitelaw are both experienced business leaders in their own right. They have not only shared their own considerable knowledge about customer experience, but they have enticed business leaders from across Europe and Australia to be interviewed on how their organisations have changed their culture – positioning their customers at the heart of their organisation.

This book, targeted at C-suite leaders, is about how to do it. It includes topics that cover how to lead a customer centricity transformation, developing the strategy, tactics and execution of a customer centricity project and how to change the culture. The results for companies who have followed this guidance are remarkable.

Gavin Patterson, Chief Executive of BT Group plc – “As a CEO you've got to ask the right questions, so when people give recommendations to you, you must ensure that actually you start with the customer and end with the customer. You look at the financial impacts of something, you look at the risks that go with it, but ultimately what is in it for the customer, how has it improved a customer's life and ultimately make the decisions on that basis.”

Sue de Wit, Head of Customer Experience at Atos UK – “I think everybody gets focused by following whatever the leader does. If they're a charismatic, influential person it immediately puts the spotlight on. Leadership was a huge influence on the rest of the organisation and that's absolutely key. If you don't have that very senior sponsorship to any change that you're trying to drive, it's just not going to work. Everything we do starts with ‘Client At The Heart’.”

David Thodey, CEO of Telstra – “I've realised that customer centricity is greater than just the service. Because it's around what you stand for, and it turns the company out to the outside, and it creates this drive for change and reinvention. The culture is putting the customer at the centre of everything you do and bringing the voice of the customer into the discussion and giving people permission to say if you serve the customer well, then you will get a good profit outcome.”

Part I – About Customer Centricity

Chapter 1 – Customer at the Heart

•Definitions

•The Nature of Business Relationships

•Getting the Basics Right

•Customer Relationship Quality (CRQ)

•The Value of Being Customer-Centric

•The Importance of Good Customer Data

•Product-orientation versus Customer-orientation

Chapter 2 – The Role of the Account Manager

•The Central Role of the Account Manager

•The Account Manager as ‘Conductor’

•KAMs and GAMs

•Organisational Design

Chapter 3 – Customer Metrics

•Transactional versus Relationship Surveys

Chapter 4 – Net Promoter Score

•The Ultimate Question

•Net Promoter Score – Pros and Cons

•NPS Benchmarking

Chapter 5 – A CX Framework

•Leadership

•Strategy

•Tactics & Execution

•Culture & Change

•A Tale of Two CX Transformation Journeys

Summary of Part I

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”

- Jeff Bezos, Founder & CEO of Amazon

“A business is simply an idea to make other people’s lives better.”

- Richard Branson, Founder of Virgin

“In the age of the customer, executives don’t decide how customer-centric their companies are — customers do.”

- Kate Leggett, Forrester Research

Chapter 1 – Customer at the Heart

Let’s start with the challenge that telecommunications companies face – the example we discussed in the Introduction.

Delivering a phone line to a new business premises requires a whole series of activities to be carried out precisely and in sequence: scoping out the work accurately in the first instance, taking the order and processing it on internal IT systems, provisioning the circuits and other equipment, digging up roads to get cables to the client’s premises, obtaining permissions from the local authority to dig up that road, and so on. None of these individual tasks is particularly difficult in isolation but stringing these tasks together in a coherent repeatable reliable process is more of a challenge.

If you are a large retailer, you will have multiple outlets that are served by the same telecommunications provider, sometimes in different countries. You will probably be using multiple products from that telecommunications provider as well – broadband as well as data, mobile phones as well as fixed lines, and so on. It gets more complex if the underlying products are supported by different product teams and customer service is provided by different specialists in different geographical locations. Even the process of getting an accurate invoice out to that retailer each month is not that simple when the billing data is held on different billing systems in different countries that invariably do not talk to each other.

This is the day-to-day reality in most B2B organisations. It’s not that difficult to be customer-centric if you have a single product delivered to all clients in the same way, using the same technology platform. Very few B2B companies are so lucky. Most are hampered by a myriad of products and product lines, old technologies that require manual intervention, often supported by poorly thought-out processes. Many companies today are the result of mergers that have never been fully integrated. Welcome to the B2B world.

Definitions

Before we launch into the discussion in earnest, it’s worth a brief discussion on terminology. Let’s start with the term business-to- business (B2B) which refers to a sales or partnership arrangement between two businesses as opposed to business-to-consumer (B2C) which involves selling to individuals.

The main difference between B2B and B2C is that consumer sales – everything from groceries, books, bicycles to perfumes – are focused on meeting the needs of a large number of individual consumers, whereas B2B is based on selling to a smaller number of large accounts. This drives the way marketing, sales and product development are done. Figure 1 below summarises some of the main differences.

Figure 1 – Consumer World versus B2B World

Ultimately the difference between B2B and B2C is relationships and most B2B companies employ people with titles such as relationship manager or account director to manage those business relationships and to increase sales into key accounts.

Like ice creams, B2B also comes in several different flavours. B2G refers to selling to, or partnering with, government and public sector organisations. Most of the principles remain the same but there are subtle differences in how procurement and tendering is carried out. B2B2C (business to business to consumer) refers to selling through distributors, wholesalers or channel partners. For example, selling your insurance products through brokers or selling food and clothing items through retailers is a B2B2C activity. Who is the real customer? The answer is clearly both: the insurance company must create a product that end-customers will want but the insurer must also get inside the minds of its brokers in order to figure out how to persuade them to push its product rather than those of its competitors. Increasing the share of wallet is the name of the game here but in most respects, the same rules apply.

In this book, we talk about customer experience (CX) programmes and capturing the Voice of the Customer (VOC). But is Customer eXperience Management (CXM) the same as Customer Relationship Management (CRM) and frankly does it even matter? A 2018 study by CustomerThink looked at some of these questions and found considerable overlap amongst practitioners. They were asked if they agree or disagree with the following statements:

Statement	Agree
CXM can’t succeed without engaged employees	100%
CXM is a business strategy for creating loyal customer relationships	97%
CXM means delivering the brand promise	90%
CXM includes any effort to improve customer satisfaction	89%
By 2020, customer experience will overtake price and product as the key brand differentiator	74%
CX initiatives must include products and pricing	65%
CXM requires and a Chief Customer/Experience Officer to be successful	52%
The primary goal of CXM is to improve customer service	31%
To be successful, CXM should just focus on making experiences easy	24%
CXM is another term for a Voice of the Customer programme	23%
CXM is difficult because customer perceptions can’t be “managed”	15%
CXM is the same as Customer Success Management	13%
CXM is a replacement for Customer Relationship Management	13%

Bob Thompson of CustomerThink says that “the implication for CX leaders is that key stakeholders may — and probably do — have widely varying perceptions about CX and CXM. Some may think of CXM in a holistic way, but others may believe that CX is just another term for customer service, process improvement, or customer surveys”.

We are very much in the holistic camp and this was borne out by the interviews with various CEOs and sales directors that we interviewed for this book. As a general rule, they viewed CX or CXM as a fundamental transformation of their organisations to make them truly customer-facing. Essentially, they were talking about major change programmes that involved every function in their companies, not just the customer-facing ones. David Thodey from Telstra explained to us why customer experience is so much more than just customer service. Customer surveys are only one tiny part of that transformation story that our interviewees talked about.

The Nature of Business Relationships

In the B2B world, business relationships are based more on a partnership between two organisations rather than a pure buyer- supplier approach. Sure, there are cases where the buyer is purchasing a commodity product and is not really interested in developing a longterm relationship but in our experience these cases are few and far between. Even where the underlying product or service is a commodity, there are other factors at play. For example, GasTerra is a Dutch company involved in the wholesale of natural gas to energy companies and large industrial organisations. It is 50 percent owned by the Dutch government, 25 percent by Shell and 25 percent ExxonMobil. It is the sole buyer of gas from the Groningen gas fields in the Netherlands.

On the face of it, GasTerra is a commodity organisation. Scratch beneath the surface and it becomes clear that GasTerra’s customers are interested in more than just the lowest price. Security of supply is of critical importance to many industrial clients, so a long-term contract is more than just a commercial agreement based on price alone. Other clients have requirements to have energy delivered from green sources such as biogas or other sources of non-fossil origin. Others require flexible solutions regarding contractual obligations, options and invoicing. It might seem strange but many of GasTerra’s customers have specifically stated that they are looking for a partnership approach rather than commodity supplier arrangement.

So, what does a good partnership arrangement like? In our view, the three fundamental pillars of any good business relationship are:

•Commitment. As we have seen from the GasTerra example, commitment to a long-term two-way partnership is a key objective for most B2B relationships. Commitment is the cornerstone of any loyal partnership.

•Trust. Long-term relationships are built upon a basis of fairness and honesty between both parties. This requires give and take on both sides and a willingness to go beyond the confines of any underpinning commercial agreement if the situation demands it.

•Satisfaction. Satisfaction is the outcome of meeting or exceeding a client’s expectations for the delivery of a certain product, service or solution. Although it is more ‘transactional’ than Commitment or Trust, it is nonetheless a key element of any business relationship.

We have already mentioned that most B2B companies have good relationships with the majority of their clients. Figure 2 shows what a typical client portfolio should look like. These figures are based on nearly 20 years of data from Deep-Insight – all from B2B companies – across Europe and Australia (together with some North American organisations).

Figure 2 – Typical B2B Customer Portfolio (segmented by Relationship Type)

In a typical client portfolio, one third of accounts are Ambassadors that think the service they receive is unique. Ambassadors are great advocates for your company and are generally prepared to pay a premium because, in their view, there is nobody else in the market who can deliver as good a product or service in as consistent or reliable a fashion. It is difficult or impossible for competitors to muscle in on the territory.

The largest number of clients in any client portfolio are typically Rational in nature. They don’t see you or your offering as unique but they are gen...