Reading that title you might begin to think that the purpose is to support the outdated notion that the customer is always right. Well, they aren’t – especially in B2B environments. Instead, the purpose is to explain how your company’s approach to servicing customers is what ultimately makes them easy and cost-effective to service, or difficult and impossible to service. In essence, your business development team help to create the impossible customer, the one who is rarely, if ever, satisfied and one whose expectations are beyond reach. In B2C environments the consumer is often always right and that’s because of how all service and retail establishments must manage customers. However, it’s different in a B2B environment. Why is it different?
When looking at business to consumer environments it’s important to understand that the service norms are often dictated by the market itself. These service norms force retailers and service-focused enterprises to capitulate to customer requests, or at the very least, to accommodate those requests. For instance, as a consumer you may want to return a recent purchase, and very few retailers will refuse that request – the ones that do won’t be around for long. However, business to business markets are entirely different. Allowing your customer to think that they are always right, always justified in their request, and always able to get what they believe they’re entitled to, will cost your company money – that’s a guarantee. So, when it comes to the impossible customer, everything begins and ends with your B2B approach. In essence, you decide what happens with your business to business customer relationships and how they are managed.
Understanding Your Service Capabilities
One of the reasons that B2C and B2B environments are so different is because business to business environments operate on a global scale, one where companies must service customers within a global marketplace. Your new customer could be a world away, or right around the corner, and they almost always have different expectations on service. In essence, the service capabilities within B2B environments aren’t as easily defined as they are in B2C environments. Part of it has to do with the fact that consumer establishments operate in close proximity to one another. You could have a global chain of outlets, but individual outlets must compete with local competition and that often forces each to match one another’s service levels.
Your B2B service levels aren’t defined by these aforementioned criteria. Granted, there are some service norms within certain industries and markets. However, your company’s service capabilities should encompass what your company can afford to offer its customers. In essence, your customer service strategy must start with marketing & sales. Marketing must define what your company is able to offer its customer base and your sales and customer service personnel must expand on that message with new customers. Anytime you deviate from your service criteria means you are going outside your service capabilities – which ultimately implies added costs. Just because one competitor offers a service doesn’t necessarily mean you should – especially if you can’t afford it. However, if you don’t discuss that with your customer first, how are they to know you can’t provide what they believe they’re entitled to?
What are Your Service Capabilities?
The idea is to define how your business development team manages the expectations of new customers. As mentioned, that message starts with marketing. Afterwards, it’s up to your sales and customer service team to manage new customer expectations based on your established service capabilities. It’s not a onetime affair, but it is ultimately something that must be done as part of managing your company's long-term customer relationships.
There are no all-encompassing rules to defining your service capabilities in business markets. What it ultimately boils down to is what you can afford to offer your customers as part of your service offering. For instance, can you afford to provide freight as a service and if so, is this limited to a given geographical area? What is your company’s policy on product returns and what are the conditions under which you would charge a restocking fee? What are your standard payment terms and do you offer different payment options based on the size of a given customer’s account? Do you have any minimum order quantities or policies that dictate a minimum volume ordered on each purchase? Who is ultimately responsible for servicing the day-to-day needs of customers – sales or customer service?
Each of these aforementioned questions should help to point you in the right direction in terms of defining your service capabilities. However, they must be discussed with your new customer at the outset of any new relationship. This is ultimately the most important aspect of managing customer expectations. Taking the time to discuss what your company can afford to offer in terms of service allows both you and your customer to have an exchange of needs and requirements. In essence, you may find that you have the ability to offer something they desperately need, but if you don’t take the time to define what you can offer, how will your customer know? Don’t leave this up to your customer's assumptions. Once your customer starts assuming what your enterprise can offer them, you’ll find yourself in constant catch up mode. Worse yet, that customer will dictate all future service requirements.
Managing your customer expectations helps to mitigate the high costs of servicing the impossible customer. You’ll know exactly what they need at the outset of the relationship and will ultimately be able to decide if this is something your company wants to pursue.
To read more about this subject, please refer to Defining Value Assertion and Value Proposition in Business Development. It contains the video above and additional information about definign your value to customers.
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