B-to-b companies are failing at online customer service and grossly underestimating its importance to marketing, according to two new surveys.
The surveys by Jupiter Media Metrix Inc. and Accenture also showed that despite the slowdown in the economy, brand and customer service far outstrip price as priorities among online b-to-b buyers. The findings run counter to the conventional wisdom that buyers’ cost-cutting mandates would lead to an increased emphasis on price over brand and service.
Both surveys queried executives at a broad range of b-to-b companies, including retail, financial services and manufacturing.
For its survey, Jupiter sent a customer service e-mail query to 51 b-to-b companies. Forty-one percent didn’t respond within six hours, while 29% never responded, according to the "Jupiter Customer Service WebTrack Survey." These companies included Fortune 500 stalwarts The Boeing Co., Merck & Co. and Bristol-Myers Squibb Co. (Jupiter would not say which category the companies fell into.) Johnson & Johnson Co. and Lucent Technologies Inc. were among those companies that responded within six hours.
Accenture’s survey found that a reputable brand is the foremost concern of online b-to-b buyers, followed by customer service, brand familiarity and price. Fifty-seven percent of the 1,000 purchasing executives polled for the survey, "Was it an Illusion? Putting More Brand in B-to-b," said they are unsatisfied with their online buying experiences, mostly because of poor customer service.
Build it and we’ll ignore you
The surveys come at a time when marketers, pressured to ax costs, are keen on getting suppliers to use e-mail as their preferred contact point. Indeed, hundreds of millions of dollars have been poured into online marketplaces, flashy home pages and customer relationship management software to get buyers to do just that.
David Daniels, a Jupiter analyst and author of the survey, said the spending might have been for naught if it wasn’t backed up with good customer service. "We don’t believe that buyers will move online if they don’t get a good level of service from b-to-b suppliers," he said.
In fact, Jupiter’s survey indicates that some online marketing executives are failing to grasp what their offline counterparts have always known: Poor customer service will force more customers away than a dead opossum in a store’s air vent. "If I can’t get access to customer service, my view is that I’ll leave," said Sandy Carter, VP of marketing and e-commerce at IBM Corp.
IBM research distinct from the Jupiter survey revealed that 50% of online b-to-b buyers are likely to review and possibly switch brands if they are let down by online customer service. "Brand is enhanced or detracted from by what you do on the Internet," Carter said. "When you send a note to someone, whether a response comes back affects your trust of that brand."
Johnson & Johnson, cited by Jupiter for its e-mail customer service responsiveness, receives some 1,600 e-mails a month over its corporate site. "We open all of them," said Tina Gordon, director-corporate communications and head of J&J’s e-mail customer service practice. Gordon oversees a team of three J&J employees that either responds to e-mails directly or farms them out to the appropriate subsidiary.
Gordon said researching and answering customer service e-mails take up 10% of her time. "It’s time well spent; it’s market research," she said. "It might be someone’s one and only contact with Johnson & Johnson. We only stand on our image."
Lucent Technologies, also cited by Jupiter for its responsiveness, has 12 employees located in three cities—Chesterfield, Mo.; San Juan, Puerto Rico; and Dublin—dedicated solely to answering customer service e-mails and phone calls.
Lucent’s iCare team, started in 1998, takes queries, answers basic ones on its own, and passes along more complex ones to a company technician. "We respond immediately; our outside objective is zero to 24 hours," said Mary Whelan, Lucent’s VP of e-business.
The company’s dedication to the team amid its ongoing financial hemorrhaging—and possible merger with Alcatel—is telling. "You have to view the customer holistically," Whelan said. "It’s not easy. That’s the bottom line."
J&J and Lucent manage to handle onerous e-mail volumes with skeletal staffs. Others, including Wells Fargo & Co., widely considered the top b-to-b online bank, dedicate hundreds. (Jupiter did not say whether it queried Wells Fargo for its survey.)
Wells Fargo has "several hundred" representatives dedicated to handling b-to-b customer service e-mails and phone calls, said Steve Ellis, exec VP-wholesale Internet solutions group. He could not specify the exact number.
The bank does not view its dedication to customer service e-mails as a short-term cost-saving strategy, but rather as part of a broad marketing plan to retain clients. Where many companies are discouraging their online b-to-b customers from calling by burying phone numbers or not posting them at all, customer service phone numbers are easily found across Wells Fargo’s sites.
The approach has helped bring 20% of Wells Fargo’s b-to-b client base online, up from 2% nine months ago. Ellis estimates up to 75% will be online within a year.
Merck & Co., which failed Jupiter’s test, said it knew too little of Jupiter’s methodology to comment. "We trying to be very responsive to our customers," said Gwendolyn Fisher, manager of corporate communications. Boeing and Bristol-Myers Squibb did not return calls by press time.
Demand for brand
Accenture partner Stephen Dull said a lack of understanding of the importance of online customer service and the importance of brand at b-to-b companies points to a wider marketing problem. Dull, an author of Accenture’s survey, said it indicates many b-to-b companies, unlike their consumer counterparts, suffer from strikingly poor marketing.
"At most b-to-b companies, there’s a missing marketing gene," Dull said. "There is a failure to understand how people buy and sell. Brand is really driving the marketplace here."
Dull attributed the marketing disconnect to a lack of marketers among the corporate leadership of top b-to-b companies. "Traditionally, company leaders have not come up through marketing," he said. A preponderance of operations executives and technologists running b-to-b companies is a problem, he said.
Perhaps the most worrying aspect of Accenture’s research is that it reveals a lack of concern with brand and the importance it plays in retaining buyers, Dull said. "The No. 1 need across all b-to-b companies is a reputable brand," he said. "But how many started off with a reputable brand? Not many."
Also disturbing is that 57% of buyers polled by Accenture said they are unsatisfied with their online buying experiences. This points to a lack of market research among b-to-b companies, Dull said. "People aren’t happy, and companies didn’t do their fundamental work," he said.
IBM’s Carter said b-to-b companies that have strong brands but don’t take full advantage of them are forsaking reputations that might have taken a long time to build. "Trust and experience are the two major attributes of a brand," she said.
Henry Blinder, VP-interactive travel at American Express Co.’s American Express Corporate Travel division, said the company’s ubiquitous brand has been a big factor in its success at doubling its online b-to-b transactions since last year. "They’ve picked AmEx because they know it’s going to be an advocate for them," he said.