September 22, 2023

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Happiness is a Cigar

Here's What Really Builds Customer Loyalty in the B2B Industry

Here’s What Really Builds Customer Loyalty in the B2B Industry

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During the past couple of years, we’ve all had a front-row seat at the B2B digital transformation, and it has become clear that great B2B ecommerce buying experiences don’t just happen. They require a strategic investment of time and money — and an understanding of the psychological drivers that create experience loyalty in business buyers.

While experience loyalty has been around the B2C world for decades, the B2B industry is now catching on that delighting customers doesn’t build loyalty. Instead, reducing buyer effort, or the work a buyer must do to get their problems solved, does. For today’s B2B customers, the “problem” that needs to be solved starts with the first purchase: Is it easy to start doing business with your company?

Related: The Convergence of B2B and B2C: How to Create Epic Experiences in an Experience-driven Economy

Over half of B2B buyers have switched all suppliers in one year

Most B2B companies earn a large share of their revenue from ongoing sales to existing customers, making customer retention an important B2B business priority. As human encounters are replaced with digital ones, sellers are challenged to find new ways to keep clients sticky when the competition is just a click away.

In 2021, 55% of US-based respondents in a global survey said they had switched suppliers for all business purchases in the 12 months preceding the survey. Another 41% said they had switched some suppliers for some business purchases. With nine of 10 respondents switching vendors, one can only conclude that great B2B buying experiences are not happening and likely falling further behind as the digital age progresses. Only a year earlier, in 2020, the comparable percentages were 20% for all purchases and 43% for some purchases.

Although 2022 numbers aren’t out yet, it’s safe to assume that B2B buyers continue to have rising expectations based on their B2C ecommerce habits. That’s why B2B leaders need to understand that today’s key differentiator is their company’s ability to deliver the best possible B2B customer experience.

Customer effort matters much more than delight

Gartner has extensively studied experience loyalty, evaluating whether customer satisfaction can accurately predict future loyalty. Although counterintuitive, their conclusion is “no.” The data revealed that 20% of customers who reported that they were “satisfied” also expressed an intention to buy from someone else. And the delight strategy fares no better: “There was virtually no difference between the loyalty of customers whose expectations were exceeded and those whose expectations were simply met,” the report states. Instead, the true driver of customer loyalty is the amount of effort customers must use to resolve a problem: 96% of customers who had a high-effort experience reported being disloyal compared with 9% with low-effort experiences.

As business leaders, we don’t want our customers to have problems with our products or services. But it doesn’t take a “big” problem to give a customer the feeling that a company is hard to do business with. Gartner identifies the key sources of customer effort as:

It’s more likely that a “simple” customer request can reveal whether it’s genuinely easy to do business with your company.

Related: 12 Golden Rules for Customer Experience Strategy

B2B payments are complex, but the buying experience can be simple

In evaluating today’s B2B customer journey, many B2B buyers find the purchase process complicated and time-consuming. It can be hard to select a supplier, and once chosen, the onboarding process can take days (or even weeks, in some industries) adding immense friction at the very beginning of the customer experience. This segment of the customer journey has historically been a manual and paper-based system. In my experience, many companies “digitize” payments by adding online forms, which does not improve or accelerate the manual underpinnings.

Today’s buyers have much higher expectations and expect B2B ecommerce to be fully automated, instantly responsive and mobile-friendly. Furthermore, corporate customers increasingly want more self-service account options, which require robust portals or apps that allow them to access invoices, make payments, manage disputes and more in just a few clicks.

Better B2B payments can remove a majority of the friction

Today, business growth will likely include new digital channels, such as ecommerce, marketplaces and more. And although B2B customers enjoy these new channels, they want to continue purchasing the way they always have, with contracts, purchase orders (POs) and invoices. Why? Because contracts often include special pricing and other negotiated terms, and the POs and invoices are required to manage enterprise expenses.

That’s why digital channels designed to offer a great B2B customer experience must include all the complexity required by buyers and their organizations. The key is that the complicated plumbing must sit behind a sleek, easy checkout experience.

The good news is that the days of building these digital solutions in-house are long gone. Instead, B2B merchants can choose to join an existing B2B payments and invoicing network that is purpose-built to reduce many of the challenges organizations encounter as they strive to enhance experience loyalty. These proven B2B payments providers can provide:

  • Real-time trade credit decisioning in moments, not days, that keep prospective buyers engaged when they have decided to purchase

  • Right-sized corporate trade credit accounts

  • Automated accounts receivable to support new customer acquisition and onboarding

  • Digital invoices in formats that are easy for enterprise systems to digest

  • Fraud detection and mitigation during trade credit decisioning

Related: The Ultimate Secret of Building a Loyal Customer Base

A modern B2B payment process can create experience loyalty

It’s the new reality: Most B2B buyers don’t want help during “the sales process” unless they ask for it. Instead of relying on salespeople to build sticky relationships, companies must grow customer loyalty in other ways. Investing in an easier payments experience is an excellent place to start.

Many companies view their online payment experience as merely mechanical — it either works or not — and in the past, they were largely correct. But like it or not, today’s digital world is very different. With a world of merchants at their fingertips, buyers know they have choices and are quick to take their business elsewhere. That’s why suppliers that create a customer-centric checkout, designed to give B2B buyers an experience that is neither complicated nor time-consuming, can gain a significant competitive edge. According to McKinsey, B2B companies that transformed their customer experiences saw 10 to 15% revenue growth, higher client satisfaction scores, improved employee satisfaction and a 10-20% reduction in operational costs.

Companies of all sizes can use this type of technology to their strategic advantage where loyalty-building B2B payments experiences are just a few APIs away. A comprehensive payments solution can significantly reduce the friction that new buyers encounter. Investing in a low-effort onboarding process can create a memorable relationship starter, build experience loyalty and differentiate your company — all the result of strategically investing time and money to create a great B2B ecommerce experience.