The most compelling reason to invest in CX
The C-suite needs to understand why great B2B customer experience is now non-negotiable, says Carlos Hidalgo.
Carlos Hidalgo hears it all the time – B2B executives questioning the need to invest in customer experience. Sure, they say, delivering great customer experience (CX) would be nice. But what impact will it have on the bottom line?
Hidalgo, a US-based adviser, author and speaker who has worked with B2B companies for over two decades, says he usually hears this from frustrated marketers, but it could be from anyone in B2B. “I can’t get my executives to invest in a customer experience program or initiative,” they say to him. “How do we make CX count?”
Well, Hidalgo says, you need to start speaking the only language those executives understand. You need to prove that good CX improves revenue growth and cuts business costs.
He points to a study in Harvard Business Review that shows a subscription-based business with the highest CX score is likely to retain members for six years longer than one with a lower CX score. It also found businesses offering great experiences have lower customer service costs. “Unhappy customers are expensive,” the researchers wrote.
“By 2020, price and product will be secondary to customer experience.”
Seeking great CX is now non-negotiable, Hidalgo says, for B2Cs and B2Bs. He cites ample international research showing how three out of four customers expect a good experience when they interact with brands. One study, from the Temkin Group, shows 86 per cent of customers who have a great experience are likely to repurchase.
“We have to acknowledge on the B2B side that customer experience is taking centre stage,” Hidalgo told the audience at the B2B Marketing Leaders Forum 2018 in Sydney. “When your CEO or CFO or CCO says: ‘why are we going to invest in this?’ Pull out that stat from the Temkin Group group and say ‘this is what we need to do’. By 2020, price and product will be secondary to customer experience.”
Hidalgo says deciding to make CX a priority is only part of the battle. Marketers now have little control over how and when prospective B2B customers interact with their brands, which makes every potential interaction important.
“Let me assure you: your customers start to engage with you long before there is a trigger event where they have to buy something,” he says. “They are engaging with your brand; they are engaging with some of your content before you ever know it.
“If we don’t make our brand welcoming and delight our customers with our brand content, the chances of us getting to be part of the audience they engage with when they’re in a buying cycle is doing to drop significantly.”
Hidalgo, who wrote one of most influential books on demand generation, Driving Demand, says CX doesn’t have a beginning or end point. “We have to dispel this myth that buyer interaction is when they buy something or [it’s about] demand gen … it happens way before the buying process even begins.”
Another myth Hidalgo wants to shatter is that customer experience is the same thing as customer service. “Traditional thinking is that all we need to do is provide really great service; that we have to deliver to the customers’ expectations,” he says. “However, that’s not true. You can provide really great service and still lose.
“What you have to provide is customer improvement. How do we improve your business by working with my brand, or working with our product or buying our service?” If you do that, Hidalgo says, customers will be much less likely to consider a competitor’s product or service at contract renewal time.
The path to CX success
Hidalgo says there are many steps businesses need to make before embarking on a CX-led culture change.
The first thing businesses must do is measure their maturity levels – are they ready to deliver great customer experience or are they just paying lip service to it? “One of the best ways to do that is to ask your customers,” he says. “Be ready to hear your baby is pretty ugly.”
It’s also essential for B2B businesses to pay close attention to the customer journey – who is actually using your product or service? “Just because we sell to one person,” Hidalgo says, “doesn’t mean that’s the individual using our product.”
Businesses also need to embrace the digital transformation their customers are bringing to their doorstep. “If we fight it, if we want to be disruptive, it’s not going to work,” he says.
Hidalgo believes employees play a crucial role in developing a company’s CX mindset. They need to be enabled, equipped and empowered to deliver exceptional customer experiences, he says.
“It’s going to be impossible for you to deliver CX if every employee in your company doesn’t understand what your brand promise or brand mission is,” Hidalgo says. “How on earth can you determine what kind of experience you’re going to deliver to your customers? You don’t even know if that’s what your customers want. We have to ensure it’s embedded in the DNA of our employees, because that’s where CX starts.”
He says businesses need to give employees the right tools and culture to deliver great CX, and the faith they will do it well. And when they do succeed, they must be rewarded. “Encourage your employees for acting on your customers’ behalf,” he says.
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Further reading: How CMOs can put customers front and centre