Which will get you more Profitable Revenue?
Christine Crandell in her Forbes blog asked the question, Customer Experience: Is It The Chicken or Egg?
The bottom line question is does a company strategically decide the customer problem they solve first or do they design a customer experience first.
The question should be less like “chicken or egg” and which comes first and more like how do the blind men understand the elephant.
The focus of this article is on B2B companies and how do they create intentional long-term profitable relationships with customers.
One of the questions not asked in Christine’s blog is “should we define customer service as a revenue strategy.” We have written about this before https://www.therevenuegame.com/ceochallenge/11/is-customer-service-really-a-revenue-strategy/, but it deserves a review.
A strategy needs to be “Intentionally” addressed and be compelling when deployed. If other companies promise or claim they deliver “customer service” (or do we expect competitors to admit they don’t), the result is the buyer doesn’t know who to trust before they buy. So price becomes the buying criteria, which sets the customer’s expectations for what they will pay long-term.
Intentionally selecting a strategy that results in the buyer using price as the decision criteria is seldom ideal, and only when the seller has the scale to be the long-term low price winner (at a sustainable level of profit) should it be considered.
Back to the elephant and understanding what Revenue Strategy would create that desirable long-term profitable customer relationship. Creating that long-term relationship requires putting together the various parts of the elephant into an intentional revenue strategy with predictable results for both the buyer and the seller. Make sure the following critical parts of the elephant get reviewed before taking any action and that all action is “Intentional” vs. opportunistic (not long-term sustainable).
Those critical parts are:
- Does the seller company consider itself a vendor (vendors fulfill buyer’s demands) or a partner (partners solve buyer problems). B2B Companies under $100m seldom have the scale to be a sustainable vendor. Most B2B companies under $100m describe themselves as adding GREAT value through business models, technology or their thought leadership.
- Customers/buyers have different relationships with partners and vendors (from vendors, they want first, price and logistics and second, a great experience). From partners, they need ideas, design, integration, change leadership, overall thought leadership to solve business problems the buyer is not sure how to solve or that the problem can EVEN be solved and a great customer experience.
- 3. The sophistication level of the buyer as it relates to the “problem” being solved helps frame the answers to the two questions above and determines the type and level of support desired by the buyer related to this problem. The seller’s “specific” offer to the buyer regarding solving this problem sets the original Scope of Work (SOW) to measure service against.
- The last critical element is “the details of offer” the seller makes to solve the buyer’s problem. The less specific and focused the offer means support is about trying to get or keep the offer aligned with the buyer,s emerging requirements. If the offer is specific to solve a problem where the seller is the thought leader in how to solve the problem and the buyer is following the seller’s lead, then the customer service is about leading the buyer to solve a problem.
The strategy first or last is really clear once the seller “Intentionally” decides if they are a vendor fulfilling the buyer’s defined needs or if the seller decides to be a partner who is leading the buyer to a solution of a problem they can’t solve without their partner.
Very few B2B companies under $100m can win as a low price vendor over the long-term and most don’t want to. SME (Small Medium Enterprise) B2B companies are proud of the value they bring and don’t even think of themselves as low price vendors.
The bottom line is if you are a B2B company and you are passionate about the value you bring, build a Revenue Strategy https://www.therevenuegame.com/ceochallenge/07/knowing-your-competitors/ based on the problem you solve for your buyers that no one else solves (every company can determine this), and you will get paid what you deserve by long-term customers who consider you their partner in solving business problems.