Don’t forget B2B CRM

Posted: April 21, 2010 in CRM, Technology
Tags: , ,

While we’re on the subject of the customer relationship it’s important, even vital, that we do a better job of teasing apart customer types.  It seems to me that the vast conversation about social CRM and the social customer has focused on the end consumer — the business-to-consumer (B2C) relationship — not the business-to-business (B2B) one.  That’s probably a smart over reaction to the fact the about two-thirds of the economy consists of B2C transactions.

What might not be smart is assuming that the other third of the economy operates more or less like the consumer economy and that B2B customers are the same and can be addressed with the same tools and methods.  The most popular business organization model is still some form of hierarchy and businesses often make decisions based on the consensus of people up the ladder.  Other people have input in the decision but very often, final approval comes from people higher up who have budget responsibilities.

Businesses spend money for only two reasons, to make money or to save it.  If a purchase, and the ongoing cost of repair, maintenance and upgrade, cannot be justified on these grounds, or if the purchase cannot flat out make more money than it costs, there is no reason for it.  This reality puts a box around most B2B relationships, which prevents them from becoming emotional in a B2C sense.  It also lets a business relationship operate more along operational lines where objective measures like price, on-time performance and quality standards dictate the health of the relationship.

Over the years, vendors have had varying degrees of difficulty dealing with the differences since they are often in B2B relationships with suppliers as well as B2C relationships with consumers.

There’s more room for bruised egos in a business-to-consumer (B2C) relationship than in a B2B one.  A consumer can take offence at a vendor’s behavior while in a similar B2B situation a behavior might be shrugged of as “just doing business”.

With all that said, it ought to be easier to produce B2B CRM systems focused on operational standards yet deployment of good operational CRM systems seems to lag right now.  Exceptions show up in customer service in companies like RightNow (kudos for the Magic Quadrant), Salesforce and others dedicated to building knowledge bases that are accessible and searchable from multiple channels.

In the best examples of B2B service, vendors are using social technologies to capture customer needs and collective solutions and then make them useful and available to others.  This neat trick enables vendors to actually capture intellectual property (IP) from normal conversations.  The IP is recycled through the cloud support infrastructure resulting in lower service costs and, presumably, customers that are happier because their issues are quickly resolved.

Salesforce, with its Sales Cloud, also applies social ideas to B2B selling with positive results.  Here the company gathers social IP from all sales encounters and distills common ideas from numerous encounters that can be applied in the future.

What’s most interesting to me is the evolving realization that social ideas apply equally well to both kinds of relationships but in opposite directions.  The B2C approach is to socialize the relationship with the customer by gathering data from the market and analyzing it for common trends.  Understanding customer trends enables B2C vendors to extract information they can apply in future encounters.  Sales Playbooks, a term popularized by Kadient and some others, are the distillation of customer reactions to vendor sales initiatives and materials.  From a playbook a vendor can plot a sales strategy with confidence of being on the right track.

In comparison, B2B vendors are beginning to socialize the organizational, e.g. operational, response to the customer.  Chatter, another Salesforce invention, socializes the vendor organization.  In a B2B situation, a vendor organization knows that operational excellence is critical to most relationships.  Socializing the customer relationship from within the vendor organization simply provides the necessary and immediate stimuli for personnel to take appropriate actions.

That may sound like a mouthful, and it is, but the net of all this is an easier take-away.  The B2C and B2B relationships are fundamentally different and lately, we’ve given a lot of attention to the former and maybe not enough to the latter.  The social approaches to each are diametrical opposites but once we get our heads around that essential idea, I think we’ll be more successful in the B2B world.

Finally, who drives the relationship — B2C or B2B?  I think it’s a smart vendor who enables the customer to believe he or she is in the driver’s seat.

Comments
  1. emschles says:

    The CALCULUS behind the acquisition (My guess)
    Sales Cloud + Crowd Sourced Data/IaaS = SUCCESS for salesforce.com clients

  2. johnonlineuk says:

    Whilst B2B may only be a small segment of the overall market I agree with your comments about SCRM.
    SCRM for B2B is just another channel of conversation rather than THE channel. Whilst customers are made up of individuals we need to monitor what is being said using all channels, but when we communicate with them as individuals within the business then the traditional phone calls and email work just fine.
    The secret to any good relationship is communication, but you wouldn’t use Twitter or Blogs to ask a girl out – would you?

    • Denis Pombriant says:

      B2B might be small in percentage terms, but with a $60+ trillion global economy it is significant. Thanks for reading and writing. D

  3. […] Pombriant makes a great point when he says “Don’t Forget About B2B CRM.“  We certainly have not…and I think it is why we have been so […]

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