More business doesn’t always mean more customers. Heavy users of a product or service are apt to increase their investment over time, provided they remain sufficiently loyal. To nurture such customers, marketers must understand their needs and deliver more value to them, sometimes at the expense of finding new opportunities.
That’s the strategic decision B-to-B communications company Brocade has embodied over the past several years. As an international data and network solutions provider that’s been in business since 1995, the company has thousands of potential clients it could forge a stronger relationship with. Rather than try to expand its appeal and draw in more customers, Brocade decided to redouble its efforts to take care of its core supporters. It tweaked its offering to meet the needs of its top 200 customers, which comprised 80% of sales.
This effort came to be known internally as Customer First. “This is the magic of a B-to-B company. In the marketing department, one of our jobs is to really understand our customers and our market,” says Christine Heckart, Brocade’s CMO. “We wanted to make sure that everything the company was doing internally and externally was putting the best interests of the customer first.”
“We began with the intent of being very customer-focused, but we weren’t sure what our initial starting point was,” Heckart says. “We needed a benchmark to know if we were terrible or OK.”
Brocade brought in a third-party evaluator, Walker & Associates , to determine its Net Promoter Score, or NPS, a metric to assess customer loyalty. Customers are asked to respond, using a 10-point scale, to a limited series of questions around a single theme: How likely are you to recommend this company to another person? Respondents who answer with a nine or 10 are considered promoters, or unofficial advocates for a brand. A response of seven or eight indicates passiveness, while people whose answers fall between zero and six are considered detractors. The upshot of all this is a higher score, which likely means happier customers and a greater probability of word-of-mouth business acquisition.
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Rather than commission a single NPS, Brocade decided early that the project would be a long-term effort involving annual assessments. In between surveys Brocade would work to understand feedback, incorporate it into processes and communicate it to clients.
“That was pragmatism taking over. I have a philosophy for any initiative and that is summarized as ‘Think big, start small and move fast,’ ” Heckart says.
For Brocade, starting small meant soliciting input from its top 50 clients. These 50 clients would serve as the model for all the initial prototyping before the program could expand to include the next 150 clients. Within six months, all 200 had been surveyed. The results were encouraging. In fact, the overall NPS of 51 placed Brocade among the best in class for this area.
Yet, while undoubtedly welcome news, the high scores posed a bit of problem moving forward: How do you improve on an A grade?
“We started to worry that because the scores were already pretty high and customers were already pretty happy that maybe it would be really difficult to move the needle,” Heckart says. “Yet we had made a commitment to tie everyone’s compensation to this.”
Brocade’s answer was to push higher. “We made a goal to get to 52. It didn’t seem like much but that would have been on the average trend for improvements across all of Walker’s B-to-B database.”
To get there, Brocade looked at sales packages for each of the 200 customers included in the survey. Some clients had unique needs based on the nature of their business. Heckart’s team worked closely with sales to devise client-specific solutions for individual and cluster problems that would enhance the value of Brocade’s offerings to these customers. A package was developed for every single customer, incorporating the NPS feedback, and forwarded to the sales team to communicate how Brocade had developed individually tailored changes.
Additionally, there were broad-brush themes in some of the less satisfactory answers concerning Brocade’s performance. Armed with these commonalities, Brocade could address the issues in a way that would hopefully make its customers happier. When the company learned certain product lines, for instance, were perceived to lack sufficient customer support, the company beefed up its outreach efforts for those offerings. An engineering task force was created to enhance the code in lower-rated products.
Noticeably lower scores also tended to follow patterns of geography. Brocade does business all over the world, and some of the companies included in the NPS are located in Japan and Germany, which historically tend to be much harder graders than Americans. But Brocade also reviewed its sales reps in these areas to ensure they were doing everything possible to obtain a maximum score.
A year later, Brocade administrated the NPS again. The results greatly surpassed initial expectations. The team blew past its self-imposed goal of 52 and leapt all the way to 62, higher than any company Walker had ever surveyed before.
That success has translated into increased revenue and more business for Brocade, as happier customers are proving to be more heavily invested customers. The second-round NPS results were released in August 2016 on the heels of third-quarter earnings for the company. That report showed a revenue increase of 7% over the previous year—the entire time the most intensive portions of the Customer First program were in effect—and a 13% increase quarter over quarter. For Heckart, there’s no doubt that the boost was due in part to Brocade’s efforts to concentrate on making its biggest clients its happiest clients.
“We do know … there is a correlation between purchasing and the rate at which these customers buy and the increases of purchasing and their level of satisfaction,” Heckart says.