Similar aim, different approaches

Editor’s note: Doug Berdie is a research strategist with Minneapolis-based BI.

Fundamental differences exist between consumer and business-to-business customer satisfaction research. Failure to attend to these differences has resulted in many expensive measurement systems that do not address real business needs.

The core survival strategy of companies who sell b-to-b is to keep their key clients and insure that the revenue from these clients remains steady or increases. Because the “80/20 rule” generally applies to b-to-b companies, they pay less attention to their smaller accounts (unless it is obvious these are major growth candidates) and devote much more effort to their key accounts. The key accounts often have personal sales reps assigned to them, are “wined and dined,” participate in client review sessions, and are tracked with great care by upper management.

The core survival strategy of consumer-oriented companies is to maintain revenues across the entire customer base and to, at least, retain market share within the industry. Few customers are identified individually and, hence, little attention is paid to specific customers.

(The lack of focus on individual customers is not a hard and fast rule and is more readily apparent in some consumer-oriented companies [e.g., consumer packaged goods companies whose individual customers rarely account for major revenue] than in others [airlines, for example, and other companies that have devoted significant effort to CRM and do focus on individual customers].)

Growth strategies

The core growth strategy for many b-to-b companies is to replace many small accounts with a few larger ones. They would rather see 80/20 move more toward 70/30 or 60/40. To accomplish this, much effort is expended on identifying specific accounts that have the potential to become major accounts. Again, top-to-top meetings are held with these candidates to see how the relationship can be expanded. Pricing concessions and other tactics are discussed for furthering the relationship.

The core growth strategy for most consumer-oriented companies is to increase the number of customers it has. Again, in most cases, little effort is made to deal with customers on an individual basis. Mass media advertising and promotions are much more commonly used techniques.

How these differences influence the measurement of customer satisfaction

If one’s focus is on retaining individual, specific customers, one will want to know what is important to those customers and how well they feel they are being served - one by one. This necessitates a research process in which: 1) the identity of each survey respondent is known; 2) what is important to each survey respondent is known - and tied back to that person’s identity; 3) levels of satisfaction with supplier performance are known - and tied back to that person’s identity; and 4) the exact details of areas of dissatisfaction are known - and, again, tied back to that person’s identity. It will not suffice to have “overall measures” of what is important across all customers, nor will it suffice to know satisfaction levels across all customers. If what is the single most important purchase criterion to the most critical customer is only ninth-most important across the entire sample, and individual responses are not tended to, insuring that the important customer is totally satisfied with this element of experience may not be deemed a high priority - putting this critical customer at risk.

However, one cannot (in a practical sense) pay attention to the individual responses of millions of customers across a typical consumer market. Here, it does make sense to look at what is most important across the entire customer base and to see how well satisfaction scores relate to the most important attributes of the experience.

What this means is that b-to-b customer satisfaction measurement systems should:

1. Ask customers for permission to tie their name to their responses - and to allow the coupled information to be shared with the supplier and its sales team. (This question is best asked at the end of the survey, so it will not bias responses, and permission, typically, is granted in more than 90 percent of cases - often enthusiastically: “Please do tell them!”)

2. Contain appropriate ways to measure what is important to the customer - with such measures having validity and reliability at the individual level. Commonly-used factor analysis and regression-based techniques for assessing what is important to customers are ill suited to b-to-b studies because they only reflect what is important to customers as a whole, not what is important to specific, individual customers. Experience shows that importance rating scales are also of limited value given the tendency of respondents to rate most, if not all, attributes “important.” Instead, “Indicate the two most important” (of a longer list), pairwise trade-off questions (“Which is more important, A or B, B or C, A or C?” etc.), rankings (even with their limitations), and other questioning techniques that force some discrimination among attributes work best to determine importance at the individual level.

3. Produce an output that profiles, for each customer, how that customer answered each satisfaction question and which elements of the experience are most important to that specific customer. Elements that are of high importance where satisfaction is low should be highlighted.

Conversely, consumer customer satisfaction measurement systems can:

1. Be done anonymously (or confidentially) because there is little need to relate identities to responses.

2. Use statistical derivations based on regression and other multivariate techniques to measure what is important to customers because subsequent actions aimed at customers will be aimed at them as a whole (or, by segment) and will not be tailored to individual customers.

3. Contain summary reports across the customer base (or, by segments) - again, because actions will not be taken on an individual basis.

Also, the procedures for measuring how effective customer satisfaction improvement initiatives have been differ between b-to-b and consumer settings. In b-to-b settings, financial information about revenues and margins is known for specific customers, and changes in these numbers can be tracked against changes in how the specific customers are treated. Effects on revenues and margins for consumer companies will, again, be tracked on more of an aggregate level.

Implications

Although the intent of both b-to-b and consumer-oriented customer satisfaction systems is to measure performance so that targeted improvements can be made, the techniques and applications used successfully in one domain are not maximally effective in the other.

Historically, many quantitative market researchers have come from consumer packaged goods backgrounds and are steeped in quantitative measures that summarize large numbers of customers. This fact may explain how these techniques have found their way into the b-to-b environment - especially when customer satisfaction measurement became such a lucrative research business. Conversely, many researchers steeped in b-to-b research have relied on qualitative techniques for other types of research and feel uncomfortable tackling customer satisfaction work that may include larger samples than they are used to.

Properly conducted b-to-b customer satisfaction research does rely on a quantitative orientation. It’s just that it is not quite the same as that used with consumer-oriented research. B-to-b research cares primarily about specific, individual customers, whereas consumer research cares much more about the customer base as a whole or large-scale segments of it.

Differentiating between b-to-b and consumer techniques also insures that the b-to-b measurement process produces credible, helpful and actionable results. And, meeting these criteria is a necessary ingredient of customer satisfaction measurement systems that actually cause positive organizational change.

The results are credible because 1) customers can see that their individual concerns are known, being examined, and getting addressed - not being lost in averages spread across an entire customer base; and 2) the sales team “believes” the research results because they can see that the results apply to “their customers.”

The differentiated results also are helpful because they identify the specific needs of the most important customers (usually those who either now are, or might be, the greatest revenue and/or margin producers), and they show exactly what changes are needed to meet the needs of these customers.

And, these results are actionable because they lead to in-depth, follow-up discussions with the affected customers, who then further elucidate the nature of any problems and point to customer-defined solutions and steps to achieve them.

Finally, use of this customer-centric measurement process for b-to-b customers increases loyalty among the customer base because 1) success stories can be publicized to the entire customer base as they occur from individual customer solutions; and 2) experience has shown that getting customers involved in solving supplier problems makes the customers feel more a part of the supplier organization and their commitment to it increases.