How vital is building strong, lasting, and loyal B2B relationships with customers? According to research by BIA/Kelsey and Manta, 61% percent of SMBs say that more than half of their revenue is derived from repeat customers. And research by Bain & Co. found that a mere 5% increase in customer loyalty can boost profitability by up to a whopping 75%.
Of course, the other side of the equation also needs to be acknowledged: failing to build strong relationships is excessively costly at best, and outright perilous at worst. For example, research by Oracle found that 89% of customers will switch loyalties after a bad customer experience, and SaaS customer service engagement firm Parature found that is takes 12 positive customer experiences to compensate for just one negative experience.
Clearly, fostering and forging effective relationships with customers isn’t just important for success: it’s essential. However, what is less clear — particularly in the complex and multi-faceted B2B space — is how to establish these relationships, and sustain them over time; which is relatively easy when things are well and everyone is happy, but is much tougher when challenges, disagreements and misunderstandings occur (or perhaps more aptly stated, when they erupt and explode).
According to Bill Scuorzo, the President and CEO of New Jersey-based BCG Advisors, here are the four keys to building effective B2B relationships that withstand the test of time:
Relentlessly Focus on Delivering Value
Naturally, price is always going to be a factor in any B2B relationships. However, contrary to what many businesses believe, it is not the number one factor that determines and drives lasting customer loyalty and engagement That distinction belongs to the one concept that, more than anything else, either makes or breaks B2B relationships: value.
Adds Bill Scuorzo: “In the context of B2B relationships, value is the willingness and capacity for businesses to lean forward and demonstrate that they are a true partner, and not just interested in increasing the frequency of transactions and the amount on invoices.”
Commit to Being Hyper Responsive
Research by Salesforce has found that 80% of B2B customers expect real-time interaction through channels like phone, social media, instant messaging, and web chat. And even when this level of instant responsiveness of neither practical nor expected — which is typically the case in many professional service relationships — businesses need to ensure that they monitor all touchpoints and respond promptly and professionally.
Bill Scuorzo adds: “It’s not that today’s customers are more impatient than yesterday’s customers. Rather, it’s that the level of expectation has dramatically increased, and the stakes have never been higher. Responsiveness is not a nice-to-have. Businesses that fail to meet this expectation — even if it simply means updating a voicemail recording or email auto-responder so that customers trying to reach an individual or department aren’t left in the dark — can make the difference between enhancing loyalty, or permanently losing a profitable customer to the competition.”
Be Completely Honest — No Matter the Cost
Loyal B2B customers will forgive some transgressions, such as the occasional lapses in responsiveness or not being notified of something relevant to them (e.g. the availability of a new product or service, etc.). However, one thing that they will not pardon — and in fact, will likely publicize across the professional and personal networks — is not getting honest advice and answers.
Nobody likes negative information. However, businesses should never obfuscate or avoid the truth, even if it upsets their customers and potentially threatens the survival of the relationship. There is no room for circumstantial ethics.
Don’t be Afraid to Apologize
Last but certainly not least: in all affiliations, associations and engagement — and B2B relationships are certainly not the exception — mistakes happen. Obviously, these should be kept to a minimum, and lessons should be learned from previous blunders to avoid future ones. But when mistakes happen, businesses should not disappear from the radar screen. Instead, they should do what they can to change the narrative.
Adds Bill Scuorzo: “Nobody is happy when mistakes happen. But when they do, businesses should immediately investigate to understand what went wrong, unreservedly apologize, take full ownership, and offer something tangible that demonstrates both their contrition, and their commitment to the relationship. Notably, many customers are more influenced by how a business deals with a mistake, than they are with the mistake itself. In the long run, they can deepen the relationship because they give businesses the opportunity to prove that they really care.”