Customer loyalty in B2B

Top Stories

»	Indiaâs data centre capacity to more than double by 2027
»	Indiaâs savings rate shoots past global average: SBI report
»	PLI scheme has attracted Rs 1.46 lakh crore investment, created 9.5 lakh jobs
»	Centre pays Rs 4,820 crore to 2.75 lakh farmers for pulses under MSP scheme
»	India's private sector growth surges to 4-month high in Dec: Report

Bikky Khosla | 23 Dec, 2014
Does customer loyalty matter in B2B trade? It is commonly said that business-to-business buyers are clear-eyed. They base their buying decisions mostly on price. Besides, most of the product types made by alternative suppliers are hardly different from each other. They are made to a standard specification, manufactured using the same techniques and processes, cost almost the same, and even deliveries are very similar. So it is nearly impossible for a B2B firm to create exclusive loyal customers who would love to do business only with it. But a report I have gone through recently tells a different story.

The study stresses that there is customer loyalty in B2B and it starts with finding out what really delights and annoys customers. Not just great products at competitive pricing affect the buying decisions of B2B customers. Most of the buyers evaluate sellers on a combination of several criteria, such as "Do they create economic and strategic value for our business?", "Can I trust them?", "How they simplify our daily operations?", etc. So, besides making sure that the basics are right, it is equally important to take account of the softer things that may seem inconsequential in isolation. They are key to driving customer loyalty in B2B trade.

How to read the mind of your customers! The best way, it is suggested, is to rely on customer feedback. A B2B seller should have a permanent customer feedback system in place that can give a clear picture of the needs of the target customer segments and help find out how well these needs are served. But whom to contact? The study adds that it depends on the dynamics of the particular industry. For example, when a company sells to a distributor or other intermediary, it should collect feedback not only from the intermediaries but also from retailers and end-users.

Once customer feedback is collected, the next step is to fix the issues. Typical issues include handoff, long cycle time or rework of a job. The study also gives some interesting real-life examples: how an accounting software development firm, after soliciting feedback from its accountant customers on a newly launched software, finds that many of them are not aware of the product's full capabilities. Similarly, a luggage bag manufacturer comes to know that its retail customers want more visits from sales representatives. Such insights can be gained only from customer feedback, and over time, accumulation of improvements based on such feedback serves to build a very powerful competitive differentiation.

I invite your opinions.