In two previous posts, we’ve been discussing the concept of red flags in the business-to-business (B2B) context.
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Because it can cost five times as much to acquire a new customer as to retain an existing one, and because of the differing business models between B2B and business-to-consumer (B2C) businesses, companies serving B2B customers must pay particular attention to staying aware of and properly addressing potential red flags in their customer relationships.
We recently talked about some common red flags to keep an eye out for. Here, we’ll talk about some best practices for identifying and addressing those red flags.
Regular Touch Points
One of the red flags we mentioned in a previous post was radio silence from customers. Having regular touch points in place to keep open lines of communication can help prevent that scenario. And if customers stop engaging in those touch points, you must respond quickly to those cues that something might be wrong.
Objective Metrics to Track Quality and Usage
Another red flag we mentioned was diminished use of a product or service. To the extent possible, try to create some metrics to objectively determine if usage has declined. Some examples could be number of units sold, traffic on your website from your customer’s IP address, time since last purchase, etc.
Escalation Plan
Identifying red flags is only part of the battle. You must have a plan and structure in place to address issues as they arise. This should mean getting key managers involved at predetermined times, and it could involve leadership meetings between key staff at both companies.
Learn from Experience
B2B companies may encounter a variety of issues managing customers. But at the same time, they are also likely to see patterns and similarities in these issues.
It’s important to learn from experience when it comes to B2B relationships. If a problem is identified with one customer, take inventory of the others and see if you might have a common issue. This can help avoid making the same mistake twice.
B2B companies need to be extremely careful about maintaining existing customers, both because it costs so much to find new customers and because every B2B customer typically accounts for a big chunk of revenue relative to B2C customers.
It’s impossible to avoid every potential bump in the road with customers. But having strategies and processes in place to identify red flags early on so they can be addressed quickly can do wonders for any company’s employee retention.