In an environment where business-to-business (B2B) customers are demanding a richer consumer-like experience, new research from Accenture Strategy finds that only 23% of companies are implementing truly effective customer experience programs and achieving higher revenue growth.
According to the report, of the 1,350 B2B sales and customer service executives surveyed in ten countries, 66% believe that new entrants are providing better customer experiences in today’s age of digital disruption. To compete, incumbent businesses recognize they need to make a significant shift in their business models: 78% of executives think higher customer expectations for tailored B2B solutions will have a substantial impact, and 76% feel that customers are now more knowledgeable, self-directed, and continually evaluating suppliers.
This poor self-assessed performance comes despite the fact that 86% of B2B supplier executives continue to view the overall customer as “very important” to their strategic priorities. Furthermore, 74% of respondents recognize customer experience will play an even larger role in overall corporate strategy over the next two years.
Spend on the right things
“B2B companies overwhelmingly recognize the importance of customer experience to their corporate strategy and bottom line, but the majority are wasting their investments on changes that are delivering mediocre results,” says Robert Wollan, senior managing director, Accenture Strategy. “With consumer-like expectations and a substantial threat from new entrants, B2B companies must be ready to design and execute a transformed customer experience or not invest in such improvements at all.”
In response to rapidly changing customer demands, new competition and low returns on investment, 45% of executives surveyed intend to increase spending by 6% or more to improve customer experience programs.
However, internal roadblocks are preventing B2B companies from meeting higher customer expectations. Only 32% of executives (versus 40% polled in the same research in 2014) say they are well-equipped with the skills, tools, and resources necessary to deliver the desired B2B customer experience. Executives point to a lack of C-suite attention, customer experience processes, and necessary cross-organizational integration.
More Strivers, fewer Laggards
Accenture Strategy identifies three groups of B2B companies—Leaders, Strivers, and Laggards—differentiated by their ability to plan and execute customer experience and deliver annual revenue growth. With just over a fifth (23%) of organizations remaining as Leaders since last year, more Laggards have moved up to the Strivers category, increasing it from 48% to 57%.
The 2015 research shows Leaders generate an average of 13% annual revenue growth. Strivers achieve an average of 6% annual revenue growth and Laggards record an average decline in revenue growth of 1%.
Among the main ways that Leaders generate outsized returns on their customer experience investments compared to Strivers:
• Almost double the proportion of Leaders (61% to 34% of Strivers) place greater value on after-sales service. They see it as the most important point in the customer lifecycle.
• 62% of Leaders (versus 42% of Strivers) see defending their business from new types of competitors as a priority and a third (35%) are being more proactive in using customer experience to become the disruptor instead of the disruptee compared to 24% of Strivers.
• Twice as many Leaders (44% versus 23% of Strivers) believe their digital investments give them a competitive advantage and allocate more of their customer experience budget to digital (67% versus 41%). But Leaders also continue to invest in traditional channels, with 39% (versus 22% of Strivers) spending more on contact centers, field service capabilities, and even legacy CRM systems over the past two years.
• Leaders are more focused on partner collaboration and performance monitoring to ensure optimal customer experience. Notably, 51% of Leaders, versus 29% of Strivers, maintain vigorous vendor management programs across several external partners.