Not so similar

Editor's note: Alan Hale is president of Consight Marketing Group, Chicago. 

There have been claims that B2B marketing research is really no different than B2C research. While there are some commonalities, our firm wholeheartedly pushes back against this and believes there are far more differences than similarities.

The primary purpose in B2B voice-of-the-customer (VOC) research is to obtain the required insights as input into crafting actionable strategies and tactics. The goal is to achieve success in terms of new products, new markets and making key customers “raving fans,” to use the term made popular by Sheldon Bowles and Ken Blanchard’s book of the same name.

This article will offer guidelines for how to conduct more effective B2B research while addressing some major differences between B2B and B2C, along with some implications on the research design. 

Conduct research with a strategic perspective. Using a strategic perspective is important in B2C but it is more critical for B2B in our opinion. B2B research is like a jigsaw puzzle, piecing together different bits of information to make a complete picture. How will the client use the research? What are they going to do with the information? Is there a commitment from senior management to act upon the research findings?

In terms of customer satisfaction and loyalty, it is creating a story for each major account. For entering new markets, the issues are: How does this market work? What are the dynamics of the market? And, what are the key levers for success? For branding research, it is: What does your brand mean and how is it differentiated from the competition? 

Focus your research efforts. In the B2B arena, there is almost always an 80/20 rule. This is defined as 20% of your accounts accounting for 80% of your revenue. This concentration of revenue is much higher than B2C. Optimizing your wallet share in these accounts will generate more dollars and profits than trying to raise your win rate in other accounts, as well as acquiring new customers. Raving fans are usually less price-sensitive, are open to purchasing additional products, services and solutions and will be advocates for your firm in referring you to other companies who are not competitors to them. We are not saying you should not acquire new accounts but you need to spend extra effort on the lowest-hanging fruit: your key customers. Conversely, if one of those large key accounts churns over to a competitor, it would have disastrous effects on your bottom line.

Implications on research design. In the B2C world, there can be thousands to tens of millions of customers. Research thus requires statistical significance, random sampling and heavy use of data analytics to tease out potential opportunities. Then, after hypotheses have been constructed, one can use qualitative research such as focus groups, ethnography, mall intercepts, etc., to provide the understanding and insight behind the numbers.

B2B research is much different due to the high concentration of revenue. For assessing customer satisfaction and loyalty, as well as launching new products and services, the first priority should be to identify which customers are your major accounts. Major accounts are the 20% of your customers, those who control 80% of your revenue. If you have 200 customers, you probably will have 40 or so of these accounts. 

Second, spend the vast majority of your research dollars on understanding and gaining insight on your performance in these accounts. Forget about statistical significance – you are gaining insight into what makes up 80% of your revenue. B2C research providers sometimes struggle with the concept of not being statistically significant.

Third, use a methodology that will give you deep understanding and insights. It probably will not be web surveys, which are relatively inexpensive but are unlikely to provide you the required understanding and insight, regardless of the platform utilized. When a web survey asks a qualitative question there are several key problems. The vast majority of respondents will not answer a qualitative question. Those who do answer give two- or three-word answers and do not expand on the answer. Last, they do not prescribe any recommended solutions.

B2B research requires qualitative discovery questions that are asked as part of a dialogue. For customer satisfaction and loyalty, the following qualitative diagnostic questions are useful: What are we doing well? Where do we need to improve? How do we compare to other competitors? How do we compare to your best-in-class vendors? Are we a vendor or a partner? How can we become a partner? How can we make you a raving fan? How easy are we to do business with? In the end, identifying the whys is the critical issue. We recommend using a heavy dose of qualitative discovery research in addition to obtaining ratings and rankings.

A rule of thumb is that if your key accounts make up 80% of your volume, you should spend 60% of your marketing research dollars there as well. If you want to contact other current customers, who are not your top accounts, then employ a less-expensive research technology such as web surveys. 

To identify other companies for research, you can sample into accounts who have recently left you (within the last 18 months so they can still recall details) to determine why they left. This will yield great insights, although the answers may be difficult to hear. Useful questions include: What didn’t you like? Why did you go with a competitor? What could have we done differently?

If you are looking at entering a new market or offering new products and services, consider sampling into other target prospects as well as competitive large accounts. The research with competitive customers will also provide you some information on your competition, making it easier to conduct competitive interviews, as you are confirming rather than fishing for information.

Determine the stakeholders and titles to be interviewed. In B2C, usually one or two people make a purchase decision. In B2B, there are many influencers and decision makers forming a buying unit. For example, you have economic buyers who evaluate the cost; and users, specifiers and purchasing agents who create the actual purchase order. Design a research plan to talk to each of them to obtain their perspectives. 

Sometimes the people in these accounts are known, other times one needs to determine who they are by networking to reach the correct person. (The salesperson assigned to that account can assist but they can sometimes be wrong.) Who buys cutting fluids at an industrial account? Is it purchasing, an engineer, manufacturing or the maintenance manager? Who buys a copier at a law firm? Is it the managing partner, purchasing, office manager or other?

Here are some examples from actual projects: 

• A manufacturer of plastic bottles sold its products to bottling plants of cola products. The following titles were interviewed: packaging engineers, to determine the impact on the bottling line; purchasing, to discuss any issues with delivery, quality and pricing; marketing, to discuss colors of labels and impact on their branding; and senior management, to discuss alignment with objectives, etc.
• For a power tool sold to contractors, it was the foreman, purchasing agent, the owner and a sample of a few contractors using the product. For commercial roofing, interviews were conducted with the roofing contractor, the general contractor, the building owner and the architect for new construction.

Assuming 40 accounts, at an average of three contacts per major account, the number of potential responses for key accounts would be 120 (three x 40), a very manageable amount. Even if the number is larger than 200, it is not thousands or millions of contacts. 

Determine if the survey will be conducted blind or the sponsor will be identified. In consumer research it is very common to conduct the research blind so as not to bias the results. Often in advertising focus groups, the moderator does not mention the sponsoring company, while the client’s marketing personnel may be sitting behind the glass. 

In business-to-business research, unless the issue is awareness, we find it more productive to identify the sponsor of the research. You won’t spend as much time chasing and explaining and the customer tends to give you longer and deeper answers. In fact, we ask the client to send out e-mails and hard-copy letters requesting participation. Response rates are generally 70%-80%, which is far higher than B2C survey response rates.

Identify the frequency and length of surveys. In the B2C world we see a lot of satisfaction survey research employed at every customer interaction, usually in the form of “Please take our five-question survey.” This provides little insight and, in fact, causes survey fatigue. We prefer utilizing 25-30-minute qualitative discussions (usually in-depth phone interviews) every 12-18 months to track progress – or lack thereof – within each major account.

Determine the importance of the product or solution. Is it expensive or relatively inexpensive? Is it like copy paper or pens, where it is not worth a lot of time to constantly evaluate vendors? Is it bought in a package with other products, like metering pumps on a skid for pharmaceutical manufacturing? Is it a requirement for the end product, such as a chemical specified for a proprietary chemical coating? 

Get the customer perspective through talking about the use of the product. There is a lot of digging in the research to determine the product’s role. You become something like a detective, figuring out the story. This is different than B2C and can benefit from the involvement of a research partner with deep experience in B2B.

Identify the purchase process. For new markets or new products, one needs to understand the purchase process as well as the criteria for the selection. Does the product require a test-and-evaluation phase? What are the criteria that determine whether the solution will be purchased? Is it cost or capital cost? Is it lifetime cost or current cost? Is it ROI, payback or some other financial hurdle? Is it doing something better, cheaper or faster? Does a new vendor have to be approved? Is there a practice of consolidating or standardizing vendors? How does a new vendor get approved? This research can identify the make-or-break success factors in a go-to-market strategy.

Factor in recognition and risk. Although this occurs in both B2C and B2B, the consequences are much more severe in the B2B setting. If you buy the wrong toothpaste, you will just pick another brand next time. If you buy the wrong car, your spouse may get upset with you but hopefully you will be forgiven. In the B2B arena, if you buy the wrong ERP or CRM software, expect to be fired. An example of real risk with a past client is introducing a new product to civil engineers who specify road construction materials. They are very reluctant to specify a new product unless it has been successfully tested for years or even decades of winter freeze/thaw cycles.

Implications for research: The research for developing a go-to-market strategy needs to determine how the solution will be evaluated and the role of each of the influencers and decision makers. Also, it is critical to identify what can be utilized to reduce the perception of risk. This could be length of time in the marketplace, other big-name companies using your product, testing results from an independent lab, an engineer being provided on-site during the testing period, a trial run or a guarantee.

Explore experience and account service. According to industry research, 60%-80% of accounts leave, not due to price, but in response to how your customers feel they are being serviced. Research needs to be designed to determine how well your company services key accounts. Are we responsive? Are we proactive? Are we easy to do business with? In addition to ratings, it is beneficial to have detailed explanations and concrete examples, especially when it is a low rating. How effective was the support pre-sale, transaction and post-sale? How can we improve your overall service?

Assess the effectiveness of your communication. In customer satisfaction research, it is important to determine the effectiveness of the communication between you and each major customer. Is it clear? Is the company responsive? This is especially necessary in major accounts who are multinational corporations. Does the account manager listen effectively and communicate the concerns cited by the customer? Do they act as an advocate for the customers in marshalling the required resources across all countries?

Offer to assist your major clients’ key customers in achieving their objectives. In the B2C world, this is not really a factor. In the B2B world, when you help to solidify the relationship bond between your major customer and one of their key customers, you win more loyalty. You become a partner, not merely a supplier, in strengthening the tie between your major account and their customer. Research should incorporate the asking: Is there anything we can do to help your largest customers? Note: they may or may not want this type of support.

Determine the role of incentives. It is an industry standard to pay consumers somewhere in the range of $125-$200 to participate in a focus group. In the B2B world, incentives are not normally necessary, as the customer wants to see increased performance from the vendor as the outcome. Sometimes you need to offer very senior executives the option to donate $200 to the charity of their choice. Occasionally, it is more efficient to use incentives to minimize the wasted time of dialing for interviews. An example of the latter is office supplies. It is usually not an important decision in terms of function or cost and the office manager normally does the purchasing. But it is very difficult getting these busy people to the phone for a survey, even to commit to a time for the survey. You may be better off giving them an incentive, like $50, for their time. For non-customers, like prospects, competitive customers and lost customers, be prepared to offer incentives. Please note that some companies have policies that prohibit incentives or gifts, so you may have to consider other options.

We see many clients who are reluctant to use these incentives due to the increased cost but it can have a very significant positive impact on increasing the response rate. It really is not worth trying to eliminate incentives when they are required.

Determine your alignment with customers. Sometimes it is useful to measure the alignment with a client’s management team and their key customers. There are a lot of stories and paradigms within the client organization. For example, a salesperson may assume that customers leave due to higher prices but usually there are other factors that come into play. The C-level executives may be making decisions based on how the market operated 25-30 years ago and assume there have been no changes in the marketplace. Senior management may believe their brand represents something different from the perceptions of their customers.

Our firm likes to give the management team an abbreviated survey to measure the alignment with their customers. Oddly enough, we find that the clients who are closest to the customer tend to grade their performance a lot tougher. They have seen what it takes to meet the customer requirements behind the scenes, where the customer can’t see all the problems. Other times the client is way too generous in rating their own performance – a clear signal of misalignment.

Develop actionable strategies

VOC research should be designed to develop actionable strategies and tactics. The success is not the end of this phase of research but is measured in launching new initiatives that drive additional revenue and profit.

In our research designs, the qualitative discussion is 60%-80% of the discussion guide, with the customer doing the majority of the talking. The interviewer concentrates on listening, probing and writing notes for the eventual transcript. There is a place for every research methodology and data analytics can be very effective in many situations but may not be the most effective methodology to deliver true insight. In B2B, you have a limited sample base and VOC research is very effective at digging out insights and fostering understanding. 

There are many marketing research tools in the toolbox. But one needs to be careful to not fall prey to the old axiom: “If all you have is a hammer, everything looks like a nail.” It is the responsibility of the market research provider to listen to the objectives of the research and present the best research methodology.

One of the primary goals in customer satisfaction and loyalty research is to make each of your major accounts raving fans. In order to obtain exceptional insights, ones that lead to actions, you need a mix of quantitative and qualitative data. Ideally, VOC research should lead to the design of specific strategies for each of your major accounts, with an eye toward getting corporate leadership to view research an investment instead of an expense. 

We hope this article has helped clarify the differences in B2B research in the ongoing debate. We wish you luck and success in your next research initiative.