Thanks to Jeff White (President of EMD Electronics, a business of Merck KGaA) for his contributions. The content for this blog was published in the September 2021 US Print edition of GasWorld.
All companies have been faced with the challenge of maintaining robust and consistent customer relations in the midst the pandemic. In Salesforce’s annual (2020) ‘State of Service’ survey, it stated “the pandemic exposed a
variety of customer related shortcomings. Eighty-eight percent (88%) of service professionals said the pandemic exposed technology gaps, 86% said the same for service channel gaps (phone/email/face-to-face/digital/etc.) and 87% stated that existing policies and protocols were not suited for the circumstances.” Faced with these challenges, sales and service teams had to pivot quickly in many instances to meet customer expectations during the pandemic but, also institute many of those changes for the foreseeable future. In this article, we review some of these lessons learned in maintaining customer relations, best practices being employed and recommend steps for you to consider incorporating going forward.
Background
In its most basic form, Customer Relations (CR) involves managing all interactions with customers across all touchpoints. Historically in our industry, CR has been typically owned by the Commercial organization which encompassed customer interactions in Sales, Product/Applications marketing, Customer stations and local engineering, customer service and potentially a small group handling complaints and returns issues. Most of these teams were customer focused and proactive reaching out to discover why complaints were made, ensuring that the dissatisfied customers remained customers, and improving the product/service to customers.
Then in the mid-1990s, there was a bit of a shift to customer loyalty, partially driven by the focus on Total Quality Management (TQM) and pursuit of the Malcolm Baldridge award. The purpose was to turn one-time or short-term customers into “loyal customers” distinguishing loyalty from satisfaction. At the time, multiple studies documented that 75% of customers who reported being satisfied with one company’s products still bought competitors’ products as well. The emphasis on loyalty was mostly driven by the bottom line. Even with 3-5 year agreements (or even longer for onsite plants) the industry learned that contracts alone do not ensure loyalty. Keeping existing customers is cheaper than finding new ones and having a base of loyal customers for one product or service improves sales for the company’s other offerings. In addition, recurring customers (treated well) are also more likely to recommend the company to others and to try out the company’s latest products.
And now the latest shift is the focus on Customer experience (CX). One definition of CX is the overall experience a customer has with a company across all points of interactions – before, during and after purchase/renewal. In a way, this is a bit of “Back to the Future” and being more customer intimate, which is partly true. However, the execution of CX processes/tools are much more technology-enabled, anticipating or even predicting customer needs well before they tell us. McKinsey has stated that investing in improved CX pays dividends. These improvements can lower customer churn by 10-15%, increase the win rate of offers by 20-40%, and lower costs to serve by up to 50%.
In many ways, the pandemic enhanced and solidified incumbent business relationships.” stated Jeff White, President of EMD Electronics, a business of Merck KGaA, Darmstadt, Germany. “We learned new ways to interface using technology (that’s the how of the interface). Our challenge now is to leverage that new technology and those new efficiencies while maintaining the advantage the comes with close personal contact..
Lessons Learned
Teamwork & Internal Engagement – the importance of clear and documented work processes, understanding of roles and responsibilities, decision owners/rights, and the associated data/information flows, enabled teams to operate efficiently even as portions of them shifted to remote working. It was painful for many companies to collaborate efficiently if these “fundamentals” were not in place.
Changing the way you do business, or more specifically the business model, is something every business needs to do from time to time due to competitive, customer or external factors. However, having to change the model very quickly (i.e., in days or weeks) or perhaps very radically, is something very different. So, whether tweaking or transforming it, almost all companies have had to make these types of changes during the pandemic. Below are a few of the lessons learned with regards to CR:
- Engagement Efficiency – companies that had multiple channels in place (beyond phone/fax/email) were able to quickly shift to text messaging and other social tools with customers or vendors and were able to augment or even replace traditional customer interactions seamlessly.
- Effectiveness – companies that practiced greater creativity and flexibility in not just connecting efficiently with customers but focused on doing the “right things” to benefit the relationship, gained tremendous value and expanded relationships. Examples included showing greater levels of empathy, maybe teaming up and offering social or community support, and even recalibrating the in-person experience acknowledging their customer’s concerns/policies.
- Technology & Infrastructure – it was abundantly clear very quickly that companies that had the necessary IT hardware (laptops, smartphones, or even Augmented Reality (AR) glasses, etc.), software (cloud-based collaboration and operation tools) and work processes in place, were able to pivot quickly to meet external customer and internal employee requirements efficiently.
In addition to learnings suppliers gained from the pandemic, our customers equally “gleaned” some learnings from “us” in the process. They now know which of their suppliers were able to meet their product and service demands when their supply chains were challenged. They understand and better appreciate the value of dual sourcing, and value of those suppliers having in-region supply chains. Without a doubt, customers have grown more comfortable in doing more of their business with suppliers in a virtual fashion. For some it has been doing more research on supplier websites, using digital channels for ordering or checking delivery status, or leveraging self-service or even Chat features to get information quickly. These trends and learnings are expected to be long-lasting and become more of the norm over time.
The pandemic taught us both some new lessons as well as reconfirmed that our business model was sound even in the midst of a pandemic,” said Jeff White. “There was no one way to interface with customers so flexibility enabled by your technology platform was absolutely needed. And on the flip- side, the pandemic reconfirmed that business is still done by relationships. The pandemic advantaged existing relationships and particularly those that were supported by appropriate technology interface solutions. However, cold calls have become even more difficult, he continued.
Best Practices
The pandemic has changed how B2B buyers and sellers interact, some more than others, and savvy commercial leaders are learning how to adapt to the “next normal.” A top priority must be taking care of customers, while simultaneously prioritizing our employees’ well-being, and adjusting how their organizations sell and service in the face of new customer habits. In many ways, the changes in customer behavior are an acceleration of digital trends that were in motion before the pandemic. Market experts believe we are at a digital inflection point, where B2B sales operations going forward will look fundamentally different from what they were before the pandemic. If that is the case, here are some best practices that you may want to consider:
- Bolster the Strategy Review Process – A clearly understood, executive driven business strategy is critical to success. However, the pandemic has forced companies to think differently about the best timing to refresh or change strategies and business models, topics/exercises to include to bolster attention to resilience or other cross-organizational topics and what external events or metrics will trigger those activities. Instead of a set schedule (annually or semi-annually) companies use alerts or triggers to drive the need to revisit strategy. In addition, use High- Profile Strategic Initiatives (outputs from strategic planning) to build traction ensuring that the new strategy is not drowned out by day-to-day concerns. Particularly for strategies that involve adjacent moves or new business models, initiatives may not have a natural organizational home. In these cases, it is essential to have a strong executive sponsor and clear funding sources.
- Reset the Desired Customer Experience – Re-orchestrating the customer experience and the accompanying sales processes across channels should be at the top of the list for sales leaders trying to manage effectively through this post-pandemic stage. Companies not only need to have the right channels and choices for their customers, but it also means “getting it right” across all those channels. It means delivering on the three things customers value most, in addition to price: speed, transparency, and expertise. Those priorities apply across all channels, and they are more pertinent now than ever. More than three-quarters of executives expect changed customer behavior to continue after COVID-19, trading face-to-face contact for more shopping and customer service interactions online. To that end, 84 percent of executives say that customer experience management will be a high priority over the next two years, compared to only 35 percent just two years ago. And yet, “improved customer service” sits in the bottom half of the list of benefits that executives seek from digital transformation.
- Select the “Right” Digital Investments – The CEO of Microsoft, Satya Nadella, stated during the pandemic, “we have seen two years’ worth of digital transformation in two months among enterprise customers — and the result of those investments will persist long after the crisis.” It is abundantly clear that significant levels of digital transformation are already in the works at many companies. As a best practice, IT investments should focus on specific business-model innovations to address new opportunities, rather than just increase the use of digital technologies in general. In addition, this investment is critical to retain and grow business, as confirmed in a recent survey of Fortune 500 CEOs. Sixty-three (63%) stated that the Covid-19 crisis would accelerate their technological investment despite financial pressures, and only 6% said it would slow it down.
- Reset the Desired Customer Experience – Re-orchestrating the customer experience and the accompanying sales processes across channels should be at the top of the list for sales leaders trying to manage effectively through this post-pandemic stage. Companies not only need to have the right channels and choices for their customers, but it also means “getting it right” across all those channels. It means delivering on the three things customers value most, in addition to price: speed, transparency, and expertise. Those priorities apply across all channels, and they are more pertinent now than ever. More than three-quarters of executives expect changed customer behavior to continue after COVID-19, trading face-to-face contact for more shopping and customer service interactions online. To that end, 84 percent of executives say that customer experience management will be a high priority over the next two years, compared to only 35 percent just two years ago. And yet, “improved customer service” sits in the bottom half of the list of benefits that executives seek from digital transformation.
Path Forward
GasWorld has captured several stories over the past year of companies going above and beyond to meet customer requirements, whether it was the supply of specialty products (i.e., medical oxygen) to hospitals or even entire countries (i.e., India), or retooling factories to produce ventilators or other types of specialty equipment. In all cases, it was meeting customer expectations under extreme circumstances. The key in all those examples was maintaining customer relations as effectively and efficiently as possible despite the circumstances, and in many cases without the necessary tools/systems. With this learning under our belts, there are probably a few items companies can incorporate into their business model, to not only continue to meet post-pandemic customer expectations but build that capability into a sustainable competitive advantage enhancing their business models. What things should you be doing?
