Learning & Development

4 Common Red Flags to Watch Out for in B2B Relationships

In a previous post, we discussed the importance of identifying red flags in a company’s business to business (B2B) relationships. A red flag, as we’re using the term, is a sign that losing a customer may be imminent. Specifically, we talked about the cost of losing a customer.

red flag

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A commonly quoted ballpark estimate is that it costs five times as much to acquire a new customer as to retain an existing one. The differing business models between B2B and business to customer (B2C) businesses are important to keep in mind as well.
Here we’ll talk about some specific red flags companies working with B2B companies should be on the lookout for.

Radio Silence

Be careful about falling into the “no news is good news” or “out of sight, out of mind” mentalities with customers. Not hearing from a customer might not be a sign that everything is fine. It could be a sign that they are fed up and don’t see value in communicating anymore.

Lingering Issues

A lot of maintaining B2B relationships involves addressing issues that come up from time to time with a product or service. If you have a customer with a lot of outstanding items that need to be addressed, it should definitely be a red flag. Even if he or she isn’t making a big deal about these issues now, that customer might be quietly stewing over them and becoming increasingly frustrated.

Complaints About Price, Quality, or Value

Customers always want to have a better price, greater value, or better quality. But that doesn’t mean complaints about deficiencies in any of those areas should be disregarded.

Diminished Use

If a customer starts using your products or services less, it should be a clear sign he or she isn’t finding value in them and may be turning elsewhere. The easy way out would be to think you’re getting paid for doing nothing; Sooner or later, someone is going to start doing some cost cutting, and your company is likely to be top of the list for potential cuts.
It’s never fun to lose a customer, but when it comes to companies with B2B customers, a single customer can represent a significant portion of the business’s revenue.
Here, we’ve talked about some of the specific red flags to look for to identify a potential customer loss. In our final post on this topic, we’ll discuss some tips for having processes and procedures in place to deal with those red flags.

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