B2B Customer Experience: Same Animal, Different Spots
Mobility will increasingly be a hallmark of B2B
customer experience, according to almost threequarters
of businesses who say they plan to offer
sales and order status information to employees via
handheld device by 2012.
Reza Soudagar, Vinay Iyer, and Dr. Volker G. Hildebrand
—BLOOMBERG BUSINESSWEEK
RESEARCH SERVICES SURVEY, 2010
MOST DISCUSSIONS OF THE CUSTOMER experience revolve around the now familiar examples of Starbucks, Disney, Apple, and other famed businessto- consumer (B2C) companies. However, we believe that the tenets and goals of building the customer experience edge are also important to the business-to-business (B2B) world and, indeed, are just as relevant to B2B companies as to their B2C brethren.
Like B2C companies, B2B firms can no longer compete on the basis of new product offerings and lower prices. Instead, these companies need to focus on value-adds that are relevant to their customers and that they can deliver consistently and cost-effectively. Indeed, according to the Corporate Executive Board’s Integrated Sales Executive Council, only 9 percent of customers give price as a main differentiator when it comes to remaining loyal to their vendors, and 38 percent give brand and product/service quality as the main differentiator. The majority (53 percent) say that sales agents have a greater impact on customer loyalty than price, brand, and product/service quality combined.
We believe that the four essentials of a profitable customer experience (discussed in The Four Essentials of a Profitable Customer Experience)—convenience, responsiveness, relevance, and reliability—are crucial for the B2B world. In fact, the impact of an inconsistent customer experience is potentially more damaging for B2B in terms of downstream implications. Consider the detrimental effects of mistimed deliveries, shipment delays, and incorrect quantities. Anytime a supplier is unable to honor its contract commitments, a manufacturer can be faced with thousands of dollars in budget overruns as a result of labor, waste, or other avoidable costs.
As we said in Customer Experience in the “New Normal”, we would go so far as to say that when it
comes to creating and maintaining a positive and profitable customer experience, there is increasingly less and less distinction between B2C and B2B. In fact, we should simply think in terms of P2P—people to people.
TIP
There are ways to apply the human touch in the B2B world, says
TARP Worldwide’s John Goodman. For instance, he has advised
terminal operators at a chemical company to simply start a
conversation with the truck drivers who arrive at least twice a week
and wait a period of time to load their tanks. This bond would
encourage the drivers to speak positively about the company to anyone
to whom they are delivering chemicals, Goodman says. It goes to show
that it is possible to create an emotional connection even when the
product you are selling does not evoke passion.
Nevertheless, executives in B2B companies can fall into the trap of believing that focusing on the customer experience is solely the province of companies that serve consumers. Consumer products are the ones that generate passion (think iPhone, Lamborghini, and Venti Caramel Macchiato). Did anyone ever wax poetic about a shipment of lumber or a load of cement?
Maybe not. But while the B2B customer experience is necessarily quite different from the B2C, the experiences that people have as consumers inform their expectations in the B2B arena. B2B clients are increasingly becoming habituated, as consumers, to businesses that provide a rich and personalized online experience, fulfill their unspoken needs, and provide opportunities for engagement. They are now turning to their business partners and vendors and asking, “Why don’t we have that kind of relationship?” “Why aren’t you supporting a robust and helpful community (online or physical) where I can engage with my peers?” “Where are your proactive alerts on order status?” “Why didn’t you respond to that criticism I saw on the online forum I was on last night?”
In effect, nearly everyone who uses a B2B product or service is also an informed person who is connected to the digital world. Historically, opportunities for B2B clients to gather with their peers were limited to specialist communities that met in local chapters or at industry conferences held once or twice a year. Today, anyone can be plugged into a global network of ideas and information and be personally involved through Facebook, Twitter, and other social media. The line between social network interactions for personal and business reasons also is blurring. People who open their laptops after hours are likely to divide their time between an online forum for business and one with their friends. At SAP, for example, we now have more than two million business professionals in our online community network, a very large number for our industry. In fact, there is little reason anymore for any limitation on how people function in their jobs in a B2B context relative to how they interact in social communities in their personal lives.
Similarly, insights and information about B2B products, performance, and even pricing that previously could only be obtained through a salesperson or an exclusive group are now obtainable through multiple websites. The power of information control is no longer in the vendor’s hands; in effect, access to information has been democratized. The ease of 24/7 information access has changed the dynamics of B2B companies and their customers.
That is why, even in industries like industrial manufacturing, we are slowly beginning to see companies offering B2C-like experiences through rich Internet application technologies and easier access to data for making buying decisions and online postpurchase support.1 According to global IT, consulting, and business process outsourcing firm Cognizant Technology Solutions, B2B e-commerce is moving from primarily transactional to increasingly collaborative, influenced by key practices of B2C e-commerce such as better navigation and cart capabilities, improved pricing and availability, multiple search and display options, product comparison capabilities, and marketing tools that help cross-sell and upsell products through recommendations and promotions. B2B websites are starting to become embedded with social media tools, such as blogs and forums, to help with buying decisions or postpurchase support. Benefits, according to Cognizant, include larger average order sizes, lower dropout rates, fewer returns, and increased customer loyalty.
SPOTLIGHT ON: Colmobil
For some companies, there is little distinction between the B2B customer experience and the B2C customer experience. Colmobil, an Israeli automobile importer, sells trucks to business clients, in addition to selling several brands of cars to consumers. In some cases, a business client might be a consumer client, too. This dual role served as one incentive for Colmobil to integrate its enterprise systems to obtain a 360-degree view of all of its customers and fulfill the reliability, convenience, and relevance essentials of the customer experience.
• Reliability. Sales and service employees record all customer transactions and interactions in a centralized system and follow standardized policies and processes.
• Convenience. Colmobil fitted its new cars with radio-frequency ID (RFID) tags and placed tag scanners at its entrance gates. When a customer arrives, reception agents can offer a personal greeting rather than an identification inquiry. When the customer leaves, the exit gate opens automatically, without further inquiry.
• Relevance. If a B2B client walks into a Colmobil sales outlet to purchase a Hyundai for a family member, the sales staff will know that he is a valued customer from a B2B context and can offer him a corresponding personalized experience, perhaps along with a special discount.
Central Role of Information Visibility
At the same time, while the customer experience is equally important in the B2B world, there are very different considerations compared to B2C. The customer experience can be more complicated to deliver in the B2B world, and it can be mission-critical for the customer. For instance, B2B transactions may involve large-volume orders, stringent security requirements, complex trade regulations, multiparty supply chains, contract offshore manufacturing, and intricate fulfillment issues. All of these factors drive the need for timely, accurate information. This is different from the B2C world, where one e-mail acknowledgment sent when the order is received and one e-mail sent when it is shipped are pretty much what a customer needs.
In many ways, access to information—deeper, richer information than just the order shipment data—is at the heart of the B2B customer experience. Customers and employees must be able to access relevant information at key points of interaction and product/service consumption, both within and outside the four walls of the organization. For B2B, this is one of the hallmarks of a customer-centric enterprise.
Senior executives are well aware of the need to serve up information to employees to enable them to better serve customers. In the global Bloomberg Businessweek Research Services (BBRS) survey, almost threequarters of respondents said that they had plans to offer sales and order status information to employees via handheld device by 2012 (see Figure 3.1). Today, only a minority of the organizations surveyed empower their employees with information, such as customer order status and inventory levels, accessible via handheld. Being able to answer customers’ questions and provide speedy access to relevant information is a clear priority across industries, according to the BBRS survey. Additionally, once companies provide employees with data via their mobile devices, they are one step closer to doing the same for customers.
FIGURE 3.1: More Mobile Data Access
Access to key applications—anytime, anywhere—will increasingly be a hallmark of the B2B customer experience (percent of respondents).
Types of corporate information accessible via handheld
Base: 1,004 respondents from midsize to large companies, worldwide.
Source: Bloomberg Businessweek Research Services, 2010.
In the B2B world, data visibility—into order status, inventory levels, and supplier status—is particularly welcome, as it enables companies to keep their own customers happy and their own operations humming along. CEMEX USA, a business unit of $15 billion global cement manufacturer CEMEX S.A.B. de C.V. of Monterrey, Mexico, installed sensors at customer sites to monitor and automatically replenish cement-inventory levels for customers who want a seamless and continuous supply of cement. In addition, customers can view their current stock levels and orders received via a self-service online portal.
TIP
B2B companies are working to put the customer at the center of their processes. Doug Hurley, a managing director at PricewaterhouseCoopers, provides an example of an electronics manufacturer that revamped its processes and added new technologies at its inbound call center after analyzing how it could better serve its distributor base. For product repairs, the firm now follows up on the original phone call with an e-mail confirmation, which includes a bar-code label to be attached to the return so that it can be tracked throughout the repair process. It also continuously alerts the distributor to the status of the repair. “They’re looking for ways to extend their customer service, where there is perceived value, with the intent that distributors will be more satisfied customers,” Hurley says. In our view, the change also fulfills all four of our essentials of the customer experience. ERP and CRM system that reveals key information on process flows and sets system alerts when delays are likely. Not only has this increased ontime delivery, but CEMEX also notifies customers proactively of delays and how it intends to resolve them. CEMEX’s overarching goal is to consistently and cost-effectively enable its customers to achieve their project and budget goals, and information is key to that. (For a full report on CEMEX USA’s customer experience efforts, see the case study “Cementing Customer Bonds” in Adding Disruptive Technologies to Advance the Game)
Industrial robot manufacturer Yaskawa America makes it as easy as possible for its customers to quickly, easily, and consistently access product information and support, whether online or via its call center. Yaskawa support personnel have the full range of customer information available within one customer relationship management (CRM) system so that they can help customers speedily without having to put them on long holds, a more satisfying experience than the usual waiting game. At the same time, employees can gather information from customers during each interaction to help the company refine its product development and other strategies for the future, thereby helping to ensure that Yaskawa stays on track. This information is maintained in a knowledge base to inspire and inform anyone in the company.
When Synopsys, Inc., a world-leading maker of electronic design automation software for semiconductors, decided to differentiate itself based on the customer experience, it created an online self-service portal that enables customers to initiate and check on service requests, in addition to other functions. It is currently used by more than 30,000 customers. In addition, Synopsys established a single “system of record” to store all customer interactions and support issues so that all employees can access the information they need to help customers. (For a full report on Synopsys’s customer experience efforts,
Another key difference for B2B, as Strativity Group’s Lior Arussy points out in an article, is what he calls “wallet share,” where B2B customers give the vendor 100 percent of the available budget for a specific product or service, rather than distributing it among several vendors. As a result, the inherent loyalty in B2B is greater than that in the notoriously fickle consumer segment. And because one B2B relationship can be worth millions, there is all the more reason to nurture that relationship at all costs. This is difficult, because one B2B customer often requires dealing with a host of individuals in different departments with different needs. “B2B organizations face different challenges that require different business paradigms and customer experiences,” Arussy writes.
B2B companies have a genuine opportunity—one that is not quite achievable in the B2C realm—to get to know their top customers on a personal level. The bond is formed around the interpersonal relationship, as opposed to the product. “The smart B2B can—and should—tailor its product or service specifically to deliver the experiences wanted by that person they know directly,” writes Richard Tait, blogger and principal at Product Development Consulting, which helps companies create product portfolios using customer-centric innovation management.4 By contrast, many B2C companies are often unaware of who their best customers even are. Or, they know the demographics of their best customers—the types and personas—but they do not know these most valuable customers as individuals on a one-to-one level at all.
B2B companies can open a direct line of communication to their best, most influential customers, discovering what makes them tick, simply by asking. They usually have more data about their customers, their business challenges, and their competitive landscape. This is something that is virtually nonexistent in the B2C world, so theoretically, B2B companies are better positioned to know their customers and provide a better experience. At the same time, their customers also set the bar higher for them.
Differences aside, the important point for B2B companies to keep in mind is the human element, and that is what is being emphasized with customer experience initiatives today. The line between B2B and B2C is becoming increasingly blurred, especially as digitally engaged people from younger generations continue to enter the workforce. As you read through the rest of this book, you will see that we draw from examples in both worlds to create a complete picture of the customer experience edge.
CASE STUDY: SYNOPSYS
Focus on Customer Success Yields Substantial Cost Savings for Synopsys
Differentiated service at every stage of the chip design
life cycle helps this electronic design automation
leader’s top and bottom lines.
Thanks to global demand for high-tech consumer devices like smart-phones and tablets, the electronics industry is pulling out of the depths of the recession. With shorter consumer and business product life cycles, coupled with widely divergent demands in developing vs. developed economies, system makers and their semiconductor suppliers are always pushing for the next new thing. To deliver, chipmakers depend on electronic design automation (EDA) systems to infuse their intricate wares with ever more capacity and sophisticated features in a timely manner.
CE ESSENTIALS
• Reliability. Synopsys standardized on a single CRM system, which would enable its engineering support staff to follow a consistent process for supporting customers, no matter where in the company they resided.
• Convenience. Customers can use a self-service portal to initiate and check on service requests or upload a test case to a support engineer via Synopsys’s web portal.
• Relevance. Synopsys’s five-pronged strategy addresses the needs of a diverse customer base, from small start-ups to global companies.
• Responsiveness. Field consultants set up notifications and subscriptions in the CRM system, enabling the sales rep who is in charge of each account to see and respond to all issues, even if they come in via different channels.
Despite this reliance, chip manufacturers’ success during boom periods does not, for the most part, spill over to EDA vendors. This counterintuitive fact keeps the three leading players—Synopsys, Cadence, and Mentor Graphics—working hard to grow both their revenue and their net income.
“There’s a steady drive by Moore’s Law to design more and more into the chips, and the design grows more and more complex,” says Gary Smith, chief analyst at Gary Smith EDA, a market intelligence and advisory services firm in Santa Clara, California. To accommodate this relentless change, EDA vendors are constantly in an upgrade cycle. And yet, their biggest customers expect more functionality and better performance for the same price, which leads to lower profit margins. “The whole basis of the electronics industry is on the back of this industry. But the EDA companies are not compensated well,” Smith says.
To succeed in these challenging conditions, market leader Synopsys decided that the best way to attract more customers, keep existing ones, and improve its margins was to bond ever more closely with its customers. The tighter its relationship with the engineers and Ph.D.s that make up its customer base, the more it would learn about their constantly changing needs.
Commitment to Customer Success
With fiscal 2010 revenues of almost $1.38 billion, Synopsys has fought hard in the past few years to reach the top spot in EDA, and the Mountain View, California–based company is determined to stay there. It has grown from a $500 million firm through a flurry of acquisitions, strong investment in R&D, and competitor weaknesses over the course of the last 10 of its 25 years in business.
Synopsys’s chosen differentiator is a commitment to enabling its customers’ success by anticipating their needs through every stage of the chip design life cycle. It delivers on that commitment by offering reliable, relevant, and responsive support resources. Thriving customers, after all, have little reason to move to a competitor. This is especially true in EDA, because chip design projects often involve millions of dollars and months if not years of time.
CE PILLARS
• Operational excellence. A centralized CRM system serves as the “system of record” for all customer support issues and standardizes processes for all support technicians across Synopsys’s business units. All support cases come through the central CRM system, and calls are routed globally to the support staff members with the right expertise.
• Interaction excellence. A self-service portal enables customers to initiate and check on service requests. Through a community forum, engineers can pose questions or converse with other customers who have faced similar design challenges. The idea is to encourage customers to ask for help—and for Synopsys to proactively offer help—at each step of the chip design journey.
For a full discussion of the CE Pillars, see The Underlying Foundation for the Customer Experience Edge.
“Our customers are using our tools to design every chip in your cell phone, your computer, the new Android, that TV you just purchased. We are used in everything from your gaming systems to your automotive electronics,” says Vito Mazzarino, vice president of field support operations at Synopsys. The world’s top chip designers are among the company’s customers.
Rather than getting an SOS call when a customer’s project is running late, with big money at stake, Synopsys wanted to ensure customer success from the beginning. That meant making it easy—almost intuitive—for busy engineers to ask for and receive help in the way that was most valuable to them. And it could not succeed by providing generic levels of service; customers had to feel as though they were getting personalized support from staff members who understood their problem.
And so Synopsys went about infusing its organization with customercentric systems, processes, and culture. An immediate hurdle, however, was its diverse collection of CRM systems. Thanks to Synopsys’s dozens of acquisitions, customer information was spread across 17 different data repositories. This made it all but impossible to deliver a consistent experience across the company’s multiple business units.
Synopsys was in good company. In a recent survey by Bloomberg Businessweek Research Services, a majority of respondents said that disconnected applications were a major obstacle to improving the customer experience (see Throwing Out the Old Playbook , Figure 4.1, “Disconnections, Silos Are Biggest Barrier to Improving Customer Experience”). The EDA vendor realized that it needed to standardize on a single CRM system, which would also enable its engineering support staff to follow a consistent process for supporting customers, no matter where in the company they resided.
Synopsys chose a CRM system from its enterprise resource planning (ERP) system vendor, SAP, which enabled additional synergies between these two core business systems.
A second hurdle was the geographic and size distribution of its customer base. “We have customers in every part of the globe,” Mazzarino says. “There are big companies producing semiconductors, but we also have small start-ups in garages in California and China.” The challenge was to develop a service and support strategy that would address diverse customer needs while maintaining Synopsys’s profitability in a difficult market.
Five-Pronged Approach Adds Up to Customer Success
After studying its different types of customers and gaining a better understanding of their needs, Mazzarino’s field-support organization developed a layered customer-support and field-support strategy that is based on the various channels that customers use to get support. Different channels come into play at the different stages of the project life cycle.
The key to providing differentiated support was enabling both support techs and customers with the tools to access the right support and data at the right time. Synopsys’s five-pronged strategy is as follows:
1. Customer Education The starting point for all customers is education on Synopsys’s tools and methodologies, ranging from traditional instructor-led classes to online offerings. Many of these options are free, such as selfpaced video training on new software releases. Synopsys also offers training via archived WebEx presentations. With the notorious time pressure in the electronics industry, customers are always tempted to skip over the education step, Mazzarino says. But his organization sees these resources as a building block to later success. “This is a way of avoiding support and other problems down the road,” he says.
2. Online Customer Portal The second layer is an online portal called SolvNet. Membership in SolvNet—which is free with the maintenance contract—gives engineers access to a variety of assets, including best practices, a library of tool documentation, FAQs, and a knowledge base containing reusable code. Customers can use SolvNet to initiate and check on service requests, which flow into and out of the CRM system automatically. SolvNet is integrated with Synopsys’s core systems. Through a community forum, engineers can pose questions or converse with other customers who have faced similar design challenges. The idea is to encourage customers to ask for help—and for Synopsys to proactively offer help—at each step of the chip design journey. “We really stress with the customer to get out there early. We don’t want them to wait until the project is late and they are panicking,” Mazzarino says. Currently, 35,000 to 38,000 engineers are registered on the portal, out of a total user base of about 50,000.
3. Support Centers Located in the United States, India, and China, these centers are staffed not with traditional service representatives, but with 130 electronics engineers, most of them with master’s degrees. “Most have done design work at other companies,” Mazzarino says. “We look for designers who like the people side of the business and recruit them. It takes a special kind of person.” If a customer runs into a problem, she can upload a test case to a support engineer over SolvNet. All support cases come through the central CRM system, creating one “system of record” for all customer issues. The central CRM system also routes calls globally to the person with the right expertise, providing a personalized experience and minimizing the time the customer might otherwise spend bouncing from one agent to the next.
4. Field Application Consultants Engineers in local offices are also available to help customers get up and running with their design projects— once again, in the interest of encouraging success early to avoid bigger problems downstream. Consultants partner with salespeople, and, early in the sales cycle, they preview what type of help and support the customer is likely to need. They are also skilled in suggesting resources on SolvNet or elsewhere, with a view toward efficiency. “Often, we can move the customer to a different resource, where the issue can be handled more effectively,” Mazzarino says. For example, when a new software release or patch comes out, the consultant will engage the affected customers directly, sharing tips and best practices. Working with sales reps, the consultants set up notifications and subscriptions in the CRM system, so that the rep in charge of the account will know if an issue comes in via a different channel. For example, if three individuals from one customer have open issues, the sales rep might call the field application consultant and share relevant information about the account. In this way, Synopsys customers from large global companies sometimes discover things that they did not know about what their own colleagues on the other side of the world are doing.
5. Professional Services Organization The top tier of Synopsys’s support structure is its professional services organization, the chief function of which is to offer design services on complex projects. This team concentrates on helping customers structure their design environment and match the right resources, such as tools and methodologies, to the job at hand. The multitiered support approach also optimizes Synopsys’s customer service costs.
SYNOPSYS AT A GLANCE
• Business description: Maker of electronic design automation technology
• Location: Mountain View, California
• Products and services: EDA software and solutions
• Annual revenues: $1.38 billion (FY 2010)
• Number of employees: 6,700
• Number of customers: About 4,000 companies worldwide
“Customer support is a business of human touch, and we never lose sight of that,” Mazzarino says. “But we have to do this in a way that allows us to maintain our profitability.”
To that end, Synopsys attributes many cost efficiencies to its focus on the customer experience. The company estimates that it has reduced the amount of time application consultants spend on reactive support from 33 percent to 20 percent, enabling the company to shift support to more accessible channels and leverage a broader global talent pool.
Gary Smith is confident that Synopsys will succeed despite the EDA industry’s ongoing fluctuations and transitions. “This industry is all about change,” he says. “They are focused on their customers and on R&D.” That is just what it takes to thrive in this historically challenging industry.
Notes
Quoted material that is not referenced is from personal interviews.
1. Ashwin Nayan Rai, “From Brick to Click: E-Commerce Trends in Industrial Manufacturing,” Cognizant Technology Solutions, 2010,
http://www.cognizant.com/InsightsWhitepapers/From-Brick-to-Click.pdf.
2. “SAP Helps Companies of All Sizes Become Customer-Centric Businesses,” SAP press release, August 3, 2010, http://www.sap.com/solutions/businesssuite/crm/newsevents/press.epx?pressid=13707.
3. Lior Arussy, “Creating Customer Experience in B2B Relationships,” Global Customer Experience Management Organization,
http://www.g-cem.org/eng/content_details.jsp?contentid=2203&subjectid=107.
4. Richard Tait, “What’s Different About the B2B Customer Experience,”
blog post, August 16, 2010, http://winningcustomerexperiences.wordpress.com/2010/08/16/whatsdifferent-about-the-b2b-customer-experience/.
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The author offers advice to companies that think they’ve committed to customer experience but haven’t.
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