Strategies for B2B Organizations to Pivot their Focus Towards the Customer
B2B (Business-to-Business) organizations, like all businesses, exist to serve customers. However, in the past, many B2B companies have tended to focus more on their own internal processes and operations, rather than on the needs and preferences of their customers. This is particularly true in industries where the customer is not the end user of the product or service, but rather another business or organization.
In recent years, however, there has been a growing recognition of the importance of customer-centricity in B2B organizations. This involves refocusing the company’s strategy and operations around the needs and preferences of its customers, and putting the customer at the center of all decision-making processes.
While many B2B companies have historically been more focused on their own products and services, those that are able to put their customers at the center of their operations are much more likely to succeed in the long run.
The proportion of demand teams reporting to sales is expected to increase to 20%, according to a highly debated prediction. This forecast reflects that the belief that the longstanding tension in B2B will come to a head, and as organizations increase their focus on existing customers, the need for sales and marketing to collaborate closely throughout the customer lifecycle will become a top priority. Unfortunately, many companies may respond to this challenge by merely reshuffling internal reporting lines, hoping that this will solve their misalignment issues.
While three times more CMOs will prioritize customer health. Given the economic uncertainty, B2B organizations will aim to expand in familiar and comprehensible areas. As a result, growth strategies will shift towards retaining existing customers, increasing cross-selling and upselling revenues. Growing revenue within the existing customer base necessitates not only excellent products and services, but also strong customer relationships.
However, in 2022, only 11% of B2B marketing decision-makers reported that their company’s CMO dashboard contained customer health scores. When customer health is not well-defined, it cannot be well-managed. We expect the use of customer health scores on CMO dashboards to triple in 2023, indicating an increased emphasis on customer health. We would be pleased if more B2B marketing organizations joined in to prioritize customer health.
Excelsior Research analysts, who possess expertise spanning across all aspects of the B2B revenue engine (marketing, sales, and product), have collaborated to address what 2023 holds for B2B marketing and sales, and what changes businesses should make if they had this knowledge.
To set the stage for 2023, it is clear that B2B leaders are preparing for potential economic turbulence. With concerns surrounding inflation, higher interest rates, supply chain shortages, and the possibility of an impending recession, businesses are already reconsidering their growth strategies. We anticipate that companies will minimize risks and concentrate their resources, with those that orient their operations and strategies more closely around their customers being the ones that come out on top.
Here are some tips on how B2B organizations can establish a customer-focused approach for 2023:
- Understand your customers’ needs and challenges
The first step in refocusing your organization around the customer is to truly understand their needs and challenges. This requires spending time listening to your customers, asking questions, and gathering feedback. The more you know about your customers, the better equipped you will be to provide them with products and services that meet their specific needs.
- Align your internal teams around the customer
Once you have a solid understanding of your customers, it’s important to align your internal teams around the customer. This means breaking down silos and encouraging collaboration between teams. For example, your sales team should be working closely with your customer support team to ensure that they are providing a consistent and positive experience for customers.
- Develop customer-focused metrics
In order to measure the success of your customer-focused approach, you need to develop metrics that are aligned with the customer. This might include metrics around customer satisfaction, retention rates, or even the number of customer referrals you receive.
- Implement technology to support the customer experience
Technology can play a key role in supporting a customer-focused approach. For example, implementing a CRM system can help you better track customer interactions and identify opportunities for improvement. You might also consider implementing tools that allow customers to easily connect with your team, such as live chat or a customer portal.
- Provide ongoing training and development
Finally, it’s important to provide ongoing training and development for your team to ensure that they are equipped to provide the best possible customer experience. This might include training on customer service skills, product knowledge, or even soft skills like communication and empathy.
Reasons why customer-centricity is becoming increasingly important for B2B organizations:
- Increased competition: As the global economy becomes more interconnected, competition among B2B companies is intensifying. Customers have more options than ever before, and they are looking for suppliers who can offer them the best value for their money. By focusing on the customer, B2B organizations can differentiate themselves from their competitors and gain a competitive advantage.
- Changing customer expectations: Customers are becoming more sophisticated and demanding, and they expect B2B organizations to provide them with the same level of service and personalized attention that they receive from B2C (Business-to-Consumer) companies. B2B organizations that fail to meet these expectations risk losing customers to competitors who can.
- Increased complexity: B2B transactions are often more complex than B2C transactions, involving multiple stakeholders and decision-makers. By focusing on the customer and understanding their needs and preferences, B2B organizations can simplify the buying process and make it easier for customers to do business with them.
- Better customer retention: It is generally more cost-effective to retain existing customers than to acquire new ones. By focusing on the customer and building strong relationships with them, B2B organizations can increase customer loyalty and reduce churn.
In conclusion, the shift towards customer-centricity is essential for B2B organizations to remain competitive and relevant in today’s business environment. By putting the customer at the center of their operations, B2B organizations can differentiate themselves from their competitors, meet the changing expectations of their customers, simplify the buying process, and increase customer loyalty and retention.
Also by establishing a customer-focused approach, B2B organizations can differentiate themselves from the competition and build long-lasting relationships with their customers. While it may require some investment and effort upfront, the payoff in terms of customer loyalty and revenue growth can be significant.
Additionally, we predict that over 40% of B2B organizations will eliminate their channel marketing function, which will transform into something more significant: partner ecosystem marketing. This shift is a result of the rapid growth in traditional and non-traditional B2B partnerships. Rather than focusing solely on transactional partners, channel marketing will broaden its focus to encompass the full range of ecosystem business models, including client access. This is a welcome development because it demonstrates how B2B organizations are aligning with the needs and preferences of buyers in their search for comprehensive solutions to complex business problems.
If you’re not yet an Excelsior Research client, please don’t hesitate to reach out to us to learn more about our Predictions hub.
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