Senior executives at B-to-B companies strive to help their customers improve sales and margins. Yet very few systematic frameworks exist to guide their customer focus. Last year, I was discussing the content of a B-to-B strategy course with the dean of a top 10 business school in Asia who lamented, “Most of what B-to-B companies do relies on recycled concepts from consumer companies. Consumer goods and services are focused on customer experience, customer delight and hedonic consumption, and rightly so. But B-to-B is different. It has so many utilitarian value drivers like sales, bidding, billing and project management that go beyond experiential aspects of value. Simply put, B-to-B customers are different than traditional consumers of goods and services.”
B-to-B companies have important differences from B-to-C companies. B-to-B companies typically sell complex products and services that are purchased by clients through a systematic purchase process involving multiple stakeholders, such as end users, evaluators and purchase managers. In terms of consumption, B-to-B cycles are long and complex, sometimes lasting several decades and involving hundreds of employees.
Considering these differences, B-to-B companies can satisfy the needs of their customers by developing customer-based competencies. Research by C-CUBES (the Collaborative for Customer-Based Execution & Strategy) has identified six customer-based competencies pertinent to B-to-B customers. Unlike functional competencies (technology, finance, innovation or creativity) based on silos—such as manufacturing, finance, technology or innovation—the six customer-based competencies rely on six specific domains of perceived customer value.