by Paul-Louis Caylar, Candace Lun Plotkin, Adina Poenaru, and Patrick Schulze.
Traditionally, B2B success comes from being in the right markets, offering superior products and services, or being the lowest-cost producer. But these advantages are eroding fast. Business-to-business customers are demanding a better experience.
In a recent McKinsey survey of 1,000 B2B decision makers, lack of speed in interactions with suppliers emerged as the number-one pain point, with twice as many mentions as price.
Industry-leading B2B companies are responding by putting customer-centricity and experience at the heart of their strategy, but it doesn’t always come naturally. What’s needed is the smart combination of digital and nondigital to improve customer experience —and the trick is striking the right balance.
We’ve seen companies substantially raise customer-satisfaction scores through significant improvements in operational performance (primarily by speeding up and simplifying interactions). These improvements can lower customer churn by 10 to 15 percent, increase the win rate of offers by 20 to 40 percent, and lower costs to serve by up to 50 percent. In parallel, as customer experience improves, employee satisfaction tends to increase as well, because a more direct connection with customers adds meaning to employees’ work.
Yet the reality is that many companies still need days to provide a quote, requiring customers to fill in complicated order forms (often on paper), and frequently leave them in the dark about the status of their order. A wholesale-customer-experience program is needed. In our experience, there are five key success factors.
1. Focus on the journeys that drive customer experience in B2B
Analysis of customer interactions and touchpoints across B2B industries reveals that six journeys have the greatest effect on the customer experience and customer life cycle.[[Exhibit Graphic]]
2. Address the root causes of customer dissatisfaction to enable digital interaction
Digitization is often heralded as a tool to leapfrog competitors but given the length and complexity of many customer journeys, it may not be possible or economical to fully automate them. Nor do most B2B decision makers want that approach anyway; they still prefer to deal with an individual in many cases. Successful customer-experience transformations require first a deep understanding of the root causes of customer dissatisfaction. Only then can businesses define an effective solution. Delivering the solution is based on program management and a portfolio of initiatives to address issues in performance management, employee mind-sets and behaviors, organization, and skills gaps.
3. Design hybrid journeys combining digital and human interactions
Companies with standardized products and a fragmented customer base will want to invest more heavily in the customer journeys of identifying products and services, making initial purchases, and reordering to benefit from efficiencies. In contrast, those companies selling more customized products to a smaller set of customers often put a higher priority on the journeys of codeveloping with suppliers and dealing with unexpected events. The best journeys purposefully switch between digital self-service, digitally enabled human interactions, and offline interactions, based on what the customer prefers. Any solution needs to ensure sufficient standardization and transaction volume to warrant investments in digitization. B2B customers are generally happy to use digital self-service for simple, routine interactions like reordering in order to save time or be more flexible. But when the interaction is new and complex, or the stakes are high, most still prefer a real person with digital tools to help address their needs.
4. Create different customer-journey tracks to tailor experiences
B2B journeys often grow complex because they must accommodate the special needs of many small groups of customers. Such relationships require specific tailoring, extra services, or additional checks. Splitting the journey into standard and specialty tracks can minimize complexity, resulting in easier implementation for a majority of clients and significantly lower costs.
5. Use an agile approach to cut through the complexity
Customer journeys can be complex. Typically, the initial design of a new customer journey is not 100 percent right. Instead, a cross-functional team with journey experts from the business side and IT needs to work hand-in-hand from design to ongoing operation to test, learn, and iterate. Journey owners should be empowered to make decisions and revisit priorities for every one-to-four-week development sprint. At the end of each sprint, the full team can review the improved journey with customers and get critical feedback.
While B2B players share with B2C companies the need to build strategies around customer journeys, the complexity of B2B relationships makes digital-transformation efforts unique. Carefully parsing those complex customer relationships, striking the right balance of human and digital interactions, and maintaining an agile approach to navigating intricate customer networks will be the keys to success.
Paul-Louis Caylar is a partner in McKinsey’s Paris office, Candace Lun Plotkin is a director of knowledge in the Boston office, Adina Poenaru is an associate partner in the London office, and Patrick Schulze is a partner in the Berlin office.