DestinationCRM - It’s Time for B2B Suppliers and Buyers to Win Together
This article originally appeared on DestinationCRM.
CRM is a $40.2 billion and growing market—one that has matured significantly since it emerged in the late ’90s. Yet, because CRM systems were developed for a different time, with different requirements than those of businesses today, the customer was never really part of the equation. Instead, CRM systems have been all about the supplier, with a focus on optimizing internal processes and workflows while managing each buyer in isolation, particularly in the case of B2B software and services.
There is nothing wrong with this—CRM serves very specific, important functions—but as sales models have evolved over the past 20-plus years, there is a greater need for customer involvement. Why? Because as a contract comes to term, the buyer gets to decide whether the supplier has delivered sufficient value.
Without some sort of shared, collective agreement of what that value is and how it is measured, renewal of the contract as well as the terms of any subsequent contracts become highly subjective—and unpredictable. Now, instead of cutting the customer out, consider what would happen if suppliers invited buyers to participate in the process of how services are sold, delivered, and renewed.
Collaboration and transparency between buyer and seller would then change the traditional relationship by holding both parties accountable, giving each a part to play in the relationship’s ultimate success or failure.
Suppliers are often deservingly proud of what they have to sell. So proud, in fact, that they focus on this instead of the outcomes the customer seeks to achieve. What is a buyer trying to accomplish? What is the value they are looking to create within their companies? What are the problems they are looking to solve? Some suppliers, of course, are fairly skilled at asking smart questions to uncover problems and pains, but this is largely about getting the deal done more than creating a binding promise that will be remembered, revisited, and reviewed to ensure that the promised outcomes are being achieved.
To get the most out of a relationship over the long term, customers should help co-create a definition of value and a process for what that looks like from the very beginning so that expectations and outcomes are clear to both buyer and supplier throughout the engagement. Transparency and collaboration enable parties to align on the basis of that shared understanding, eliminating unforced errors. And this type of collaboration shouldn’t end when the ink is dry on a contract but should become the unbroken steel thread that traces through the entirety of the relationship.
Traditionally, a sort of collective memory loss happens after a deal closes. Everyone forgets what was said or promised up front. Companies fumble the handoff to the implementation, success, and onboarding teams. Vital information, such as that shared understanding of value you worked so hard to create, gets lost.
Preserving relevant information requires a much more coordinated approach, one that takes all of the insight generated during the co-creation process and transitions it to the next set of stakeholders who take custody of the buyer-supplier relationship from sales. This generally requires some kind of a shared space where commitments and accountability can live from team to team. Here, everyone along the line gains a clear understanding of what’s at stake and what’s been promised. They can input their own notes. Modifications to plans and implementation can be made, and it becomes far easier to execute, ensuring that deliverables are met.
No matter how well companies seem to be working together throughout the course of the buyer-supplier relationship, businesses are run on data. Companies have invested a lot of money in analytics to understand whether customers are adopting products and if they are being used in the right way. Unfortunately, the data generated may not be contextualized, which diminishes some of its value.
Therefore, it is really important for buyer and supplier teams to nail down exactly what is being measured and why. You can’t assess performance if you don’t know what “good” looks like or what you would expect customers to be doing with your product. Where is the baseline? Being able to understand adoption patterns contextually from the perspective of business goals should be a precondition for achieving goals.
It is beneficial for buyers and suppliers to collaboratively and holistically define all of the signals that point to whether the buyer will experience desired outcomes. Signals should not just track what’s happening with a digital product but also any marketing touchpoints, call interactions, financial transactions, or other leading indicators that could yield important data.
By analyzing these signals in context, buyers and suppliers can persistently see how things are working—and they should review this information together so that both parties remain aligned. Maybe teams set a quarterly review. Maybe they receive notifications from sensors if any defined aspect looks “off.” Doing so enables course correction within the life of the contract rather than trying to patch something up at the very end.
Delivering Value as Promised
As SaaS businesses seek to reduce customer churn by building long-term customer relationships, they should consider embracing transparent, collaborative relationships with their buyers beyond the scope of the traditional sales life cycle as tracked by CRM. This doesn’t have to be a scary prospect. There is a very clear, linear progression—parties align around a shared definition of value, and they translate that value to what the supplier actually delivers, which is then measured in a manner that holds both parties accountable in order to continue a relationship built on trust, communication, and commitment.
This new breed of buyer-supplier relationship can become a powerful differentiator within today’s business environment. Buyers get what they are promised, and suppliers reduce the amount of churn in their own business. In short, everyone wins by executing against mutually agreed-upon terms to achieve the right outcomes for both businesses.