It's now a given wisdom that using data to understand individual customer preferences is a home-run strategy for...
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business-to-consumer (B2C) relationships.
But what business-to-business (B2B) companies are learning is that data can have similar impact on their customer relationships.
Indeed, an enormous shift is taking place in the B2B market regarding engagement and customer relationships. Individual customers expect marketers to provide personalized communications based on individual preferences, rather than hosing customers with irrelevant "spray and pray" marketing blasts.
Striking a new bargain
Businesses now see the value of tailored communications and data in cultivating B2B relationships -- and B2B companies that are willing to strike a bargain can get dramatic results. Marketers understand that, in exchange for their requests for in-depth customer data, they need to improve the customer experience.
That is why, after careful research, The UPS Store repositioned itself as a small-business peer-to-peer company. Its research showed that 90% of small-business owners prefer to do business with other local business owners. As a result, UPS targeted this small-business audience and carefully crafted its messaging to directly answer its specific requirements.
An exchange of value
Just like their B2C counterparts, B2B marketers now recognize that to be truly personalized, marketing must be based on more than transactional, overlay and inferential data. It has to be based on an individual customer's stated needs and preference information.
However, developing a program to gain progressively deeper levels of self-profiled data must start with a foundation of trust. Per findings from Voice of Customer research conducted by Ernan Roman Direct Marketing Corp., B2B customers and prospects are willing to provide trusted brands with meaningful information in exchange for more personalized offers, communications and experiences. We call this exchange of value the Reciprocity of Value.
Built on trust, Reciprocity of Value is critical to B2B and B2C data-driven marketing. Trust and a perceived reciprocity motivate customers to provide the preference-based information that drives relevant, engaging communication.
Note some of these guiding principles:
- Trust is the foundation for obtaining deeper levels of personalized, preference-based data.
- Marketers must earn the right to get deeper levels of preference data by delivering on the promise of personalized communications.
- Marketers should build sustainable relationships with customers based on trust, commitment and reciprocity, from initial prospecting through every phase of the customer lifecycle.
Transcending the transaction
To better connect with B2B consumers and transcend product transactions, Microsoft sought a deeper level of customer understanding. Through VoC research with Microsoft's SMB business consumers, key rules of the road for improvement in personalization were outlined:
- Understand my unique business needs.
- Create user levels based on business size, industry and product focus, then create targeted content based on these levels.
- Develop relationships based on users' unique needs, not Microsoft's.
- Request user feedback at every touchpoint. And use that feedback to evolve the customer experience and provide relevant content and communications.
After gaining data through a preference-based, easy-to-navigate opt-in process, Microsoft developed ways to deliver on the promise of an enhanced experience. Customers received a welcome email, monthly personalized e-newsletters, and ongoing personalized offers and training. The results illustrated the power of well-thought-out personalization:
- Opt-in rates up to 95%
- Email open rates greater than 50%
- Response rates performing in the double-digits
- Revenue doubling
This is what the Reciprocity of Value looked like:
- Deeper level of personalized experience
- Customized communication, training and services
- Opt-in profile information to drive personalized content and communications
- Ability to analyze Web and email interaction behaviors Improved cross- and up-sell opportunities
What is true in the B2C universe is also true for the B2B realm: Apt use of data is about creating personalized, tailored, targeted, meaningful and, ultimately, human interactions with your audience. Companies can garner trust and new levels of insight if they commit themselves to an even exchange: They can get better insights and data if they create value from those insights and data -- and value for their customers.
That is how B2C and B2B companies can move from one-off transactions to forge long-term, value-based relationships with customers.
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