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Business Journal

B2B Barriers to Organic Growth (Part Three)

by Craig Kamins

Story Highlights

  • Barriers to growth fall into three categories
  • A key barrier prevents organic customer growth
  • B2Bs need to align recruiting, selection and development

This article is the third in a three-part series about the barriers business-to-business companies confront in getting the most out of their customer relationships.

If business-to-business (B2B) companies want to get more revenue from existing customers, they have a lot of work to do.

According to a recent Gallup report, B2Bs are only engaging 29% of their customers. That means 71% of global B2B customers are either indifferent toward a business or actively disengaged with it -- representing a significant loss of growth opportunities for B2Bs.

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Over the past few years, Gallup has conducted a series of in-depth reviews with leading B2B companies across various industries. By analyzing these interviews, Gallup has identified the most common barriers these companies face when changing or maximizing their business approach.

The barriers fall into three categories:

Overcoming defensive barriers, or barriers to retention, tends to be more straightforward than getting past offensive barriers. Defensive barriers present tangible obstacles, such as quality and on-time delivery. Offensive barriers, however, represent opportunities for organic growth, which can seem fairly limited.

Customers tend to have a strong status quo bias, or a preference for keeping things the same. Even if a B2B company delivers perfectly on its current contracts and takes measures to address or minimize problems, the customer won't necessarily give the company more business. Convincing customers to take that next step into new or existing territories or product lines often requires building a different kind of relationship with them.

Increasing organic growth within customer accounts involves overcoming several challenges:

Customers don't always communicate what they want from a company. Many customers want a more strategic relationship with their B2B partners, one in which the companies bring them innovative ideas that help them create product innovations, new approaches to markets or more efficient processes. But customers often have trouble defining what they need from their partners. For example, customers might point to a specific problem that they want to solve or an opportunity they are trying to capitalize on, but they rely on the company to figure out the rest. Sometimes customers are looking for a new product or service offering from the company, or they might want the company to share what it knows about their industry. Either way, the conversation has to evolve beyond the current transactions between company and customer.

The company's senior executives aren't involved in strategic positioning. The right people in the company must communicate its additional capabilities or knowledge to its customers. Though sales or account representatives are talented in their areas of expertise, they might lack the awareness or breadth of vision required to capture and package everything the company can do for its customers. Therefore, it's vital that the company's senior executives maintain relationships with customers because their involvement signals the customer's importance to the company. Top leaders from the company's C-suite don't necessarily need to have direct involvement with a customer account unless they have access to their counterparts in the customer organization. The company's sales and operational leaders should be more involved in account discussions.

B2B leaders don't think long term and invest in customer relationships. B2B companies can benefit from dynamic and forward-thinking conversations with customers and channel that dialogue into growth. Senior executives are often best suited to begin these conversations with customers, but account representatives should be brought into the dialogue quickly, as they are responsible for the ongoing customer relationship.

As a best practice, B2B leaders should meet periodically with their counterparts in the customer organization for business reviews. These meetings differ from key account reviews or quality reviews. The goal of a business review is to examine the state of the customer's business, not the state of the account, and to identify ways the company can help the customer meet its opportunities and challenges. Customers could also schedule -- or the company might propose -- summit meetings or technology fairs at which the company displays all the products, technologies and services it offers.

Most B2B companies usually don't train their sales or account representatives to focus on much more than selling products or services, and representatives often don't understand how to demonstrate a product or service's value beyond its price. To compete in the B2B marketplace, companies need representatives who can extend their spheres of influence beyond the procurement department. They should be problem-solvers who use all their resources to meet customers' needs.

Creating Opportunities for Organic Growth

Transforming a sales and service company requires aligning its recruiting, selection and development. Companies can shift their strategies by:

Recruiting business-minded people: Gallup has found that B2B companies are looking at a different applicant pool for sales and service roles. These companies are recruiting businesspeople with MBAs or experience that helps them understand a customer's business problems and how to solve them. These companies are hiring employees who can balance customers' complex needs while consistently delivering value.

Selecting for talent: The hiring process starts by clearly defining the sales or service role and then finding people with the innate talents to succeed in that role. Gallup defines talent as "a natural capacity for excellence." Companies can define the desired talent profile for a role by looking at their top performers. As the role evolves, however, the talents required for success in that role will change; when this happens, the company will need to adjust the talent profile for the role.

Developing the account team takes more than a training class: In too many companies, the conversation about development begins and ends with sales training. But businesses should think about development more broadly. Selection starts by defining a role, but development starts by describing what success looks like in the role. Companies should define the key performance indicators or metrics of success and then hold people accountable to those measures by including them in performance reviews. If this approach is new to the company and its account representatives, sales leaders should give them real-time feedback on their performance as they adapt to the change. This ongoing feedback will be more important to representatives' success than any formal training program.

Craig Kamins is a Senior Practice Consultant at Gallup.
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