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Business Journal

3 Ways Beyond NPS to Fully Understand B2B Relationships

Business Journal

3 Ways Beyond NPS to Fully Understand B2B Relationships

by Jeff Durr

Story Highlights

  • Net promoter scores don't reveal the full picture because B2B relationships are complex
  • VoC programs should mix quantitative and qualitative feedback
  • Collect in-person feedback from your most important relationships

Many B2B companies use Net Promoter Scores (NPS) to evaluate customer outcomes and make important customer-related decisions.

The use of NPS scores attempts to distill diverse customers' complicated feedback about a company into a single score. It asks the question, "How likely is it that you would recommend our company/product/service to a friend or colleague?"

While helpful as a general indicator of customer sentiment, NPS scores alone provide an incomplete picture of customer relationships and often can lead to an imperfect understanding of the current health of a company's customers.

In the past, many companies implemented NPS scores as part of their strategy to understand how they were performing with customers.

The focus on that single question was and still is beneficial in helping companies gain some understanding about where they stand with customers, but NPS scores alone aren't enough to fully understand and improve B2B customer relationships.

Why Aren't NPS Scores Enough?

Unlike B2C customer relationships, B2B relationships have the following characteristics that prevent a single-question survey from providing well-rounded insight:

1. Complexity: B2B relationships between two firms frequently depend on multiple stakeholders at the customer company who have different needs and expectations for their supplier's goods and services.

2. Not all votes are equal: Unlike a B2C relationship, where frequently there is one buyer, and one vote on the quality of service or product provided, B2B relationships have multiple voices and votes, and they do not all hold equal weight.

In our consulting work, Gallup frequently uncovers a disconnect between the more influential stakeholders at a customer company and the day-to-day contacts.

This nuance is important because the strategies to address a senior executive's concern are different than the strategies to address the concerns of a day-to-day contact.

Different voices, different strategies, different perspectives -- all with different effects on the relationship.

A real-world example:

In one client project, NPS scores had been trending positively, but on further review, those positive scores and feedback were overwhelmingly from the customer stakeholders who had little authority over contract renewals and awarding new business.

When Gallup interviewed more senior contacts at the customer company on behalf of our client, scores and sentiment about the overall relationship were poor. Understanding this was the difference for Gallup's client between keeping and losing one of their most important accounts.

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Quantitative Feedback Needs Qualitative Context

Gallup has interviewed and surveyed tens of thousands of customers for clients over the years, and we continue to see that quantitative data aren't sufficient to fully appreciate the messy and ever-changing nature of B2B customer relationships.

NPS scores will not provide you with the specifics. Driving improvement is what matters most, and a simple metric will not give you context or additional insights about the NPS rating your customers gave you.

How can a company ensure they are truly hearing their customers in order to grow their business?

1. Voice of the Customer (VoC) programs should provide a structured mix of quantitative and qualitative feedback to be effective.

Feedback collection needs to be structured to take both qualitative and quantitative feedback into account. Quantitative metrics are not a substitute for the rich qualitative data gained through interviewing customers.

In conducting hundreds of client studies, Gallup has seen firsthand the importance of mixing quantitative and qualitative feedback.

Single-metric or multiple-metric quantitative research has value but can't adequately explain the nuanced nature of relationships.

The devil is in the details of B2B relationships. NPS scores and other traditional data-only VoC programs don't pick up nuggets of insight that can have significant impacts on relationships.

It's important to properly structure the feedback gained through this integrated quantitative and qualitative approach. Structure is required to blend the different forms of feedback to tell a cohesive story.

Only by effectively integrating qualitative and quantitative data can B2B companies fully capture customer opinions.

2. Consideration of different types of stakeholders is important to effective VoCs.

Unlike in a B2C customer environment, relationships in B2B contexts involve a series of different buyers and sellers and not all feedback from them holds the same weight or tells you the same story.

The buyers, influencers, decision-makers and end-users that comprise the buying process are likely to have varying opinions of your relationship with them. Being able to separate and understand the concerns of different groups is crucial.

A user group may have usability problems with your product or service, while a procurement professional may be unhappy with your price. Decision-makers who are responsible for driving the business forward are likely to have different concerns entirely.

It's important to map and understand different stakeholders' feedback, as all have different opinions and expectations of you.

In practice, account teams can fall into the trap of prioritizing the perspectives of people in procurement, which tend to be less strategic and more defensive in nature than those of decision-makers.

As a result, many B2B account teams miss out on revenue opportunities.

3. You should collect in-person feedback for relationships of size.

While in many instances the digital evolution of business has led to more efficient outcomes, it is not appropriate to collect feedback from large B2B customers in this manner.

Instead, B2B companies should leverage an objective third party to conduct interviews over the phone, and in person.

The goal should always be to listen, analyze and act on your customer feedback, which cannot be captured by a single NPS metric.

Learn more about how Gallup can help your organization understand your customer relationships with proven best practices:

Jane Smith, Kirti Barry and Dan Grafstein contributed to the writing of this article.

Jeff Durr is a Partner at Gallup.
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