Jamie Cleghorn, a Chicago-based partner at consultancy Bain & Company’s customer strategy and marketing practice, discussed this subject at the Association of National Advertisers’ (ANA) 2019 Masters of B2B Marketing conference.
“B2B customers want this same kind of magic in their business lives,” he said. (For more, read WARC’s in-depth report: Understanding the “Elements of Value” for business-to-business brands.)In the recent past, B2B sales and marketing generally “lived at the bottom: we lived at price, and performance, and steak dinners,” Cleghorn asserted.
Such a situation, however, has rapidly evolved: “Today, the new B2B construct extends to providing customers with higher purpose – including hope, and even vision.”
Bain’s research, though, found that while 80% of business-to-business companies believe they provide superior customer service, just 8% of customers agree.
The cost of this complacency is high: two-thirds of B2B customers say they will scale back a relationship after a bad experience, and one-third will end a relationship.
With customer acquisition costs running at five to seven times the cost of serving an existing happy client, short-sighted companies can struggle to grow, Cleghorn stated.
“We call it the ‘leaky bucket’ problem. There’s no point in pouring new water in your bucket if old water is leaking out the bottom,” he said.
In addressing how to escape the commodity trap, Cleghorn pointed to Bain's “Elements of Value”, a schematic that contains 40 distinct elements that can guide B2B brands all the way from table stakes and higher-order priorities.
Among the table stakes are acceptable prices, ethical standards and regulatory compliance. Product quality, scalabiltiy and cost reduction are indicators of functional value, and sit one tier up from the base.
Next comes a slate of criteria pertaining to the “ease of doing business”, and covering various areas of strategy, operations, access, relationships and productivity.
The second-highest level of the pyramid involves delivering personal and career growth – goals surpassed only by the top-tier, inspirational impact of purpose, as demonstrated by a B2B company delivering around vision, hope and social responsibility.
“The more higher-level ‘Elements of Value’ a company possesses, the more customers agree that, ‘Yes, your good or service actually delivers that value in a high way,’” said Cleghorn.
Sourced from WARC