B2B (business-to-business) customers complain about products and services less often than consumers do, according to consultants John Goodman and David Beinhacker. But in the B2B space, quiet doesn’t necessarily mean “satisfied.”
In their November 20 article for Quirk’s, Goodman and Beinhacker explain the top causes for “unarticulated dissatisfaction.” They explain how to measure the business impact of complaints that are never shared. There are five ways to better understand B2B customers’ issues–and turn this data collection process into a business opportunity that can help differentiate a business from its competitors.
“Execute a survey of a random sample of the full range of customers, not just key contacts but others that your company routinely touches and who depend upon your company’s support. Ask if they have encountered problems they have not reported. Then measure their willingness to recommend you – you’ll usually see those with problems showing a 20 percent reduction in loyalty.” — David Beinhacker, vice chairman, and John Goodman, chief research officer, Customer Care Management and Consulting
Why don’t B2B customers share their complaints?
The authors begin by delving into the primary reasons why B2B customers don’t complain: process and relationships. B2B customers may tolerate an inefficient or time-consuming process because they don’t realize it can be improved. They may consider the problem to be minor; not “worth the hassle” of lodging a formal complaint. Some may even find a workaround on their own, such as going to a company website to search the FAQ for instructions or information.
However, the most damaging B2B complaints that aren’t shared pertain to ongoing relationships between colleagues. “In several business technology and services companies we’ve found that difficulties with sales, marketing and support representatives are much less frequently complained about than issues of product delivery or billing,” the authors say. “The reason is that customers know they will be dealing with that person again in the near future and if they complain, the next transaction will be much more uncomfortable.”
The iceberg of “unarticulated dissatisfaction”
To better grasp the ratio of complaints to problems, the authors suggest that B2B companies adopt a consumer market model called the “iceberg.” In an analysis of 500 B2B studies about complaint behavior, only two to five percent of all B2B complaints were escalated to the executive level (the tip of the iceberg). The rest of the complaints were either never reported by customers were handled, or were filtered out along the way.
The iceberg model allows B2B companies to extrapolate a complaints-to-problems ratio based on the total number of reports that make it to headquarters. For every complaint that crosses an executive’s desk, that executive should assume that another two to ten problems exist but go unreported. This massive, hidden “bottom of the iceberg” is where opportunities exist to poll customers and find new ways to keep them loyal.
Understanding (and quantifying) the cost of non-complainers
Unreported complaints can have a measurable impact on a company’s bottom line. Unhappy customers who don’t complain are about 20-30 percent less loyal, and they may take their business elsewhere. Dissatisfied B2B customers who don’t share their complaints are also more likely to withhold referrals and to spread negative reviews.
Unreported problems also create price sensitivity, according to the authors. “Our firm has found that in most environments when asked about value for price paid or satisfaction with price only, about ten percent of customers indicate dissatisfaction with price. The minute that a customer reports encountering one problem, sensitivity to price doubles.”
How can you measure the potential revenue loss associated with non-complainers? By quantifying “the number of customers at risk due to a month of poor service.” (The authors provide a chart explaining how to do this). To avoid attrition due to unreported problems, companies should focus on “preventing problems, getting customers to complain and enhancing the effectiveness of the service process.”
Turning non-complaints into opportunities
Goodman and Beinhacker conclude their article with five suggestions on how to leverage this understanding of B2B complaints. They suggest, among other techniques, surveying customers. “Ask if they have encountered problems they have not reported,” the authors say. They recommend a random sample that includes decision-makers, influencers and front-line employees.
B2B companies can also talk to their own employees about inefficient policies and procedures; solicit customer complaints via website questionnaires; train staff to recognize potential problems; and develop a process for combining and analyzing all this collected data from customers and employees.
Find out more about SSI’s B2B Omnibus survey.