In a McKinsey article titled “Improving the business-to-business customer experience”, the authors state, “when executives delve into the competitive advantages of building a more customer-centric organization, they very often focus on interactions with retail buyers — the end consumers. But in our experience, a customer-centric mindset is just as critical in the B2B space and more and more executives are developing B2B customer-experience strategies with striking results”
Satisfied, loyal customers’ contribution to revenue and profits is much higher than that of new customers, as we explored in our earlier article titled ‘How to Nurture Customer Loyalty and Create Raving Customers for Your B2B Product’. In this article, we explore 4 aspects that a B2B product company can continuously improve, to refine customer experience and create raving customers.
They are: maintaining product-market fit, removing barriers to trial, delivering excellent customer service and leveraging existing loyal customers to promote the brand or product.
1. Maintaining Product-Market Fit
Most product companies know that their products’ survival depends on providing financial or operational efficiencies to their customers’ businesses or being the right fit for them. Product-market fit is achieved when a product finds the sweet spot between an underserved need of the target customer and the value proposition it offers.
Airfocus, a product management tool used by the likes of Shopify and the Washington Post suggests a 40% rule to identify whether a product has achieved a reasonable level of this fit. Their surveys indicate that if a minimum of 40% of the customers surveyed will be disappointed to lose access to a product after the trial period, it signals reasonable product-market fit.
However, 40% of customers being happy with your product will only mean you are on the right path, and not that it is the ideal fit. It gets to that level only when your target customers will readily purchase, use, and tell others about it in significant enough numbers to sustain your product’s growth and profitability. Failure to find this balance and provide value for customers can affect the acquisition, activation, referral and revenue stages of the user journey of your product.
ProductPlan.com’s blog post “Product-Market Fit”, quoting The Lean Product Playbook by Dan Olsen, presents 6 high-level steps to get started on achieving product-market fit, i.e i)Determine your target customer, ii) Identify underserved needs of that customer iii) Define product’s value proposition iv) Specify the minimum viable product (MVP) feature set v) Develop the MVP and vi) Test your MVP with customers.
After identifying the target market segment, building a firm customer orientation into the company’s ethos, ideally from the inception, will help your company create a product that customers are happy to buy, use and recommend to others. If your product has gained traction without deliberate effort, your intuition may have led you to the right path.
Dan Olsen’s third step, defining the value proposition, must not happen without consulting the target customers. Most products start with concepts the founders have faith in, however, to thrive and succeed in the real world and build a loyal customer base, it is important to take in user input even as early as building an MVP. A strong product-customer alignment and feedback help mould an MVP into a cleverly designed, constantly evolving product with a set of meaningful features that exist to support a core user need.
An example here is how the small business HRM system Humanised R was developed based on a hunch that there was scope for a cloud-based HR system for small and medium-sized companies. After gathering information from several verticals in the finance sector, it found its target market in the payroll service providers segment. Its features were built with active customer feedback, enabling a close target market fit.
Therefore, early engagement and ongoing customer interaction in the product development process will ensure the product stays current and relevant to its target market.
2. Remove All Barriers to Trial
“Companies often want to be certain that your software can slot well into their business and work well with their current solutions. They also want to know whether they will get a good return on investment (ROI) by committing to your SaaS solution, and of course, that their employees can even use it”, says Combox.io, an AI-powered multi-channel digital communications service used by the likes of IKEA, CLAL Insurance & Finance and British shoe manufacturer Clarks, in one of their blogs.
Simply put, for your ROI to have a positive impact, your product has to improve your customers’ ROI. Gaps in supporting this need can lead to lower levels of activation. The activation stage is the customers’ first real experience with the product. Support at this stage will lead to it being a pleasant one.
Some companies use freemium models and offer free trials, particularly when their software is very costly, complex, tool-rich and requires a substantial amount of implementation time and user training to be used to its full potential.
However, the freemium models and free trials should be purpose-driven. The duration of the trial and the engagement plan before ending the trial to encourage a purchase should be deliberated. A good example is how Zoom’s widely used video communications service converts its free trials to paying customers in the B2B space.
“Zoom reported year-over-year revenue growth of 326 per cent between March 2020 and March 2021. Even though it costs nothing for someone to create a Zoom account and set up meetings the free plan works only up to 40 minutes. To unlock longer meetings users need to sign up for paid plans, which start at nearly $150 a year.” https://builtin.com/product/freemium
Another barrier for B2B prospective customers to try digital products is the cost and time involved in the onsite implementation of systems. Post implementation, the client companies will need to invest in hiring people on their payroll or a service provider to maintain these systems. Contrarily, making the product cloud-based will encourage trial among the target audience and adoption by reducing implementation time and costs, while improving fast and easy scalability. Naturally, the customer’s reach and business grow.
3. Deliver Excellent Customer Service
An article on strategy + business, a PWC publication, states, “in a recent PWC customer survey, almost 60% of B2B customers reported they had never had an experience with a brand that made them feel special“.
While the article says this is untapped potential for forward-thinking product companies, it shows a need for more focus on building customer loyalty by B2Bs. It possibly stems from them being unaware of the benefits of looking after existing customers before giving prominence to attracting new customers.
The above article points out, “after all, it can cost five times more to acquire a customer than to retain one, and on average the most loyal customers account for up to 80% of a company’s revenues”.
For B2B customers, time translates to money. While they are generally aware that 100% perfect, bug-free products do not exist, they do, however, expect a speedy and efficient approach to fixing issues. Anticipating the support the customers need in activating and using a product, acknowledging the issues ideally before the customers even spot them, demonstrating a commitment to resolving issues fast, ensuring the customers are kept in the communications loop, and checking with the customers that the fixes worked, are important parts of the process to keep the customers highly satisfied.
A highly differentiated product with excellent customer service is every customer’s dream. However, when your competition and you have marginal differences in the product offering, excellent customer service will set you apart. It will make your customers recommend you to others, and set you on the path of revenue growth.
The importance of making this orientation is even more apparent when looking at the statistics of ThinkImpact, a free source of statistics, trends and data, cited by those of the ilk of Forbes, HuffPost, and TechCrunch. This study states, “78% of the B2B referrals create viable customer leads for the business”.
4. Leverage Brand Evangelists to Grow Revenue
“83% of the customers are open to referring a business after conducting a successful purchase” is another insight from the ThinkImpact study. The earlier mentioned figure of high business lead generation of up to 78% via referrals in the B2B space is also reflected in other studies.
A blog post in CleverTap titled ‘Referrals are Fintech’s Most Powerful Marketing Weapon’ also indicates that “78% of B2B marketers say referrals generate leads of good or excellent quality, and 54% of marketers say referral programs have a lower cost-per-lead than other channels“.
Choosing the right customers to evangelise a product and encouraging and even rewarding them for sharing their experience is extremely important in the ‘awareness’ stage of the buyer journey. Paying loyal customers who have spent time using the product and have contributed to its development process will bring more credibility than recently acquired customers on a trial programme.
In today’s extremely interconnected world, the positive experience of actual users, particularly of leaders in the industry vertical, will be more convincing to prospective buyers than a combination of other promotional tactics such as advertising, product demos and free trials.
In conclusion, the potential for growth in a B2B digital product company building a satisfied customer base is very high. Creating loyal customers should, therefore, take precedence over acquiring new customers. The reasons for this are many: the new customer acquisition process is significantly costlier, loyal customers generate more revenue, provide up-sell and cross-sell opportunities, and help in the new customer acquisition effort as brand evangelists.
Therefore, creating happy customers must be a core business principle of any B2B product company. Constantly engaging with the customers will help develop a product that dynamically establishes product-market fit and creates value for its customer’s business. Removing barriers to trial will ensure that the customer’s first experience with the product is positive. Delivering excellent customer service is paramount to building a happy, loyal customer base that will contribute to your digital product’s revenue growth.
Finally, the happy base of customers created following the above three steps can be used strategically to evangelise your digital product to prospective new buyers, lowering acquisition costs and increasing revenue growth.
Improving the business-to-business customer experience: https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/improving-the-business-to-business-customer-experience Product-market Fit: https://airfocus.com/glossary/what-is-product-market-fit/ Product-Market Fit: https://www.productplan.com/glossary/product-market-fit/ The untapped potential of B2B customer loyalty programs: https://www.strategy-business.com/article/The-untapped-potential-of-B2B-customer-loyalty-programs B2B Referral Statistics:https://www.thinkimpact.com/b2b-referral-statistics/ How to Market to B2B Technology Buyers: https://www.gartner.com/smarterwithgartner/how-to-market-to-b2b-technology-buyers Finding the right digital balance in B2B customer experience: https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/finding-the-right-digital-balance-in-b2b-customer-experience B2B Customer Service: What It Is and How To Do It Well: https://www.helpscout.com/blog/the-importance-of-b2b-service/ Referrals are Fintech’s Most Powerful Marketing Weapon: https://clevertap.com/blog/referrals-fintech/