Industryweek 12638 Customer Promo

Do Your Industrial Customers Love Their Experience?

Dec. 21, 2016
Four questions manufacturers should ask themselves if they want to develop loyal - and more valuable - customers.

We love the equipment. We’re struggling with the instruction manual.

That was the feedback from an automaker after it bought equipment from a plant-engineering company. The equipment had been assembled by three of the engineering company’s departments. And because each department used a different standard for its technical documentation, the automaker found it difficult to feed the information into its IT system.

In the past, the engineering company might have cobbled together a quick solution and moved on, happy to be done with the problem. Businesses selling to other businesses, after all, have long competed on the strength of their technology or engineering, not the finer points of the customer experience. But this time, the company made the upfront investment to create a single documentation standard for all its departments – and all its customers.  The cost was not insignificant, but neither was the potential gain customer loyalty.

Leading B2B companies are learning from their B2C counterparts that in hotly competitive markets, making life easier for the customer matters – a lot. While the B2B world still revolves around the quality of a company’s business solutions, building greater loyalty often boils down to making those solutions easier to buy and use. The payoff is clear: Loyal customers buy more and stay longer. They are less sensitive to price, cost less to serve, and recommend the supplier to others. Over time, they are two to seven times more valuable than customers who are detractors, depending on the industry.

Winning sustained loyalty, however, requires a sustained effort. Although companies can achieve some quick gains, executives who are serious about building a compelling customer experience take a long-term, systematic approach. That starts with answering four critical questions:

What do we want to stand for in the eyes of our customers?

Senior leaders might understand what makes the company’s value proposition distinctive, but they often fail to mobilize people at the front line. Beyond a slogan or slide deck, leaders need to paint a compelling picture of what the company stands for and then work with the front line to define specific behaviors and milestones for delivering that mission to customers.

Continuous improvement involves truly understanding what annoys or delights customers and then harnessing the energy of your employees to make changes.
—Michael Staebe and Andreas Dullweber, Bain & Co.

One electrical components company, for example, distilled its vision to being “the easiest manufacturer to conduct business with and the first choice for electrical products.” Based on feedback from distributors and end customers, leadership then laid out specific behaviors to put that vision into practice, including better demand forecasting to assure product availability, a more user-friendly interface on its website and better communication with distributors.

Which handful of actions will generate the most impact?

This is hard to know from the inside so starting with customer input is critical. Effective experience design works outside-in from the customer’s perspective, not inside-out from an engineering standpoint. Plans to improve the customer experience are often scattershot, with little clarity as to which will create the most value. Asking customers is the best way to determine which initiatives work and deserve more resources.

For a major truck company in Europe, this sort of specificity came by asking its customers two simple questions: Would you recommend company X and why? It turned out customers were most concerned about repair time and quality, so service repairs became a must-win battle. The company dramatically improved loyalty scores with a handful of initiatives: training front-line employees to be more attentive, spreading out the workload and communicating better with customers.

How can we use customer feedback learn and change behaviors ?

Continuous improvement involves truly understanding what annoys or delights customers and then harnessing the energy of your employees to make changes. The most effective companies do this by regularly deploying both inner and outer feedback loops. An inner loop collects feedback which goes quickly to the relevant employees and supervisors so that they can learn, change behaviors accordingly and follow up with customers. An outer loop identifies the root causes of problems. Since these issues are often systemic, management needs to diagnose how these problems cut across functions and departments so they can make structural improvements to the overall customer experience.

How can we sustain the changes?

Companies that fall short of their expectations tend to push initiatives without articulating the behaviors they expect from their people (and themselves). The mere prospect of change can be unsettling; employees worry about their own roles, resist the change and get distracted from their work. Just as devising a winning experience starts with the customer’s priorities, an achievable plan shows empathy for employees and assesses the organization’s state of readiness. It identifies which groups are critical in carrying out the changes, equips them for success and provides coaching support.

There’s no doubt that rebuilding the customer experience can be disruptive. But leading companies don’t hesitate to start with a clean sheet because the payoff can be huge. Simplifying processes, learning to better resolve customer complaints, promoting customer self-service where appropriate—all these changes tend to reduce complexity, improve effectiveness and lower costs. A customer-centered culture that delivers exceptional experiences at reduced cost, time after time, will create lasting competitive differentiation.

Michael Staebe is a partner with Bain & Company’s Customer Strategy & Marketing practice, and Andreas Dullweber leads the practice in Europe, the Middle East and Africa. They are both based in Munich.

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