Any consumer can decide to no longer purchase from a particular store or business at their whim. Customers stop going to a restaurant or an apparel store without hesitation or remorse. Even cable TV and wireless contracts are being eliminated because of increased competition.
However, often businesses that purchase products or services from other businesses don’t have an option to change or end their relationship even when they are either somewhat or very unhappy. Those companies must wait until their service agreements come up for renewal or budget start-up costs to change vendors.
Therefore, businesses-to-business organizations may not know they are vulnerable with their customers until it’s too late.
There are other variables as well. Most large corporations use many suppliers for the same or similar services; i.e. insurance, recycling, paper supplies, etc. If a corporation is purchasing from multiple suppliers they normally have their favorites based on service and/or personal relationships. Generally, prices for services or products are going to be similar. If you are not increasing business with your customers, there may be areas of dissatisfaction that are not being disclosed.
Many times B2B companies will tell me they have had customers for years and there is no problem with client retention. However, what they are not factoring is that their customers may be growing their revenues and not increasing business with them, the specific supplier. Instead, they are maintaining business with your company, but at the same time dramatically increasing business with your company’s competitors.
Too many business-to-business companies tend to be naïve about their customers’ satisfaction and don’t have an accurate assessment of how to measure client attrition rates. Over the years, I have educated hundreds of corporations on the most effective way to determine at-risk and revenue opportunity ratios. I have found in our years of research that your clients will tell you exactly what they think and need, but you have to ask them for this information.
While there are many advantages to obtaining your B2B customer’s feedback, here are two that are often overlooked:
- The feedback process itself. When done correctly, the dialogue can help build a stronger personal relationship with your clients. Relationships are key to retention.
- Frequently your customers don’t know all the services and/or divisions your company has to offer. Having a frank and meaningful conversation might uncover additional sales opportunities.
Gaining client feedback to increase sales is something any B2B organization can and should do. Here are some suggestions to get you started building a framework of a feedback loop to retain clients:
- Brainstorm with your account execs what information would be helpful to know from your clients to help solidify relationships
- Don’t get bogged down creating questions; determine the information first, craft the questions, second
- Prioritize your customers into groups and determine how often to conduct customer assessments based on revenue size, competition and vulnerability to changing technology
- Teach your staff how to collect customer feedback without appearing defensive
- Ask customers questions that are more sensitive at the end of the interview; for example, what percentage of your business are we getting?
- Publicize your overall findings periodically so customers know the feedback is being used and their time is not being wasted
The best way to measure your customer attrition rates is not to examine your revenues, but to pinpoint your company’s at risk and opportunity ratio through direct client feedback.
Get started tomorrow. Waiting until next year, might be too late.