Service sector must unearth B2C values to benefit SMEs (and themselves)

I find myself challenged on too regular a basis with needing to help both sides of the B2B relationship – service sector organisations and their business customers (and prospects) – to unify in such a way that each can gain the maximum benefit from their relationship.

Enterprise or entrepreneur?

I have often found that service sector institutions can be much too fixated on supporting an ‘enterprise’, rather than the person running it, and moreover that even their focus on the business entity can be limited to the area most obviously related to their service, rather than encompassing the needs of the business overall.  This linear approach to delivering business support services demonstrates, in my mind, a lack of empathy with the real dynamics of any small or medium enterprise, and represents a huge lost opportunity for both parties – and the macro-economy.

Take the example of banks. I have had the pleasure of supporting the banking sector to develop relationships with business customers for many years, across 3 continents, and have found that most banks in the first instance choose to have a fairly transactional relationship with their business customers – they provide a functional banking service. Despite how effective their banking service might be, by taking this linear approach, customer loyalty and the depth of impact of the service are simply stifled.  A better outcome for both the bank (and its business support counterparts across the service sector) and its business customer can be achieved through extending its sphere of vision two ways: by unearthing the ‘C’ in the B2B relationship by focusing on the person behind the enterprise as well as the business itself; and by viewing the business beyond its basic functions, as a complex eco-system which continues to evolve to adapt to its external environment.

Unearth the ‘C’ in the B2B relationship

The business support sector has long been classified as ‘B2B’, signifying the commercial transaction which takes place between two institutions.  In the case of many SMEs, however, the business owner or leader tends to be either the ultimate consumer of the services, or at least has significant influence in how the relationship ultimately plays out. On that basis, if we classified the association as closer to B2C than B2B, perhaps that would pave the way to building better rapport, trust and understanding with the business leader, in turn leading to more successful business engagement and longer term, more fruitful relationship development .

This B2C approach needs to be embedded into marketing and communications, introducing messages and images that relate to the interests and motivations of the business owner, rather than directed to the ‘business entity’ in an abstract manner. It requires the use of language that reflects the consumer-orientated approach of the service organisation. A colleague of mine often refers to her experience of being asked as standard in marketing literature produced by a long-standing UK-based publicly funded business support organisation “are you a start-up or an established business”. In her view, as the business owner, she was neither.

I often refer to the New Psychology of Selling model from Advanced Selling Strategies by Brian Tracy, and also derived from The Hallmarks for Successful Business, which I co-authored with David Hall when I’m training business advisers and in my teaching work. Although when we consider the sales process we focus on talking about our product and closing the sale, in practice this only makes up 30% of the successful sales negotiation; as much as 70% needs to focus on the customer – an estimated 40% gaining their trust and 30% understanding their needs.  The focus needs to be very much on the customer to make a successful sale – it’s often quoted that people buy from people first.

Embracing the B2C approach, however, should not be cast as the responsibility of the sales and marketing department.  It needs to become entrenched in the culture and behaviours of the service organisation, through effective management and robust re-education, and from my own experience the key players involved in educating any organisation about the needs and nature of its customers have to be the customers themselves.

View the enterprise as a complex eco-system

It is natural to think that the obvious home for discussions about banking would be the finance department, and if we’re selling websites it might be the marketing department (or would it be IT?). However if our objective is to develop a deep and truly beneficial business relationship with our customers, we need to recognise the complex relationships across all business functions – sales, customer service, operations and marketing – as well as extending our sphere of vision to include the aspirations, threats and challenges being faced by a business. To do this we go full circle as it’s probably necessary to engage with the business leader that is driving the agenda to get the full story.

In my own experience of working with the banking sector in particular, it has become quite evident that their narrow focus on money management is falling short of the needs of their business customers. Having undertaken and participated in in-depth research internationally into relationships between SME owner managers and their banks, consistently findings have highlighted a need and desire for improved technical know-how, and help with business growth. With a shift in emphasis from delivering purely financial services banks could fill this gap; if bankers were prepared  to invest the vast networks and knowledge they have gained through their associations with the SME sector back into the businesses they serve, surely this would represent a win win.

A recent article by Gareth Wilson of global professional services company, Accenture explains the opportunity for the banking sector in a nutshell, but with a little bit of lateral thinking this could apply to the service sector as a whole:

“The SME market is hungry for more business support. According to our research, 60 per cent of SMEs are looking for closer engagement with their bank; 32 per cent want their bank to be proactive in suggesting ideas while 28 per cent want their bank to recognise that their needs may not be simple and provide more complex services on demand. There’s no question that SMEs need value-add products and services. At least one in three are already using, or have expressed an interest in, a range of services that will help them to run their business better, improve customer service or to increase sales … And we know they’re prepared to pay for them. More than 20 per cent of SMEs would be happy to pay an additional monthly fee for value-added services.”

Based on Accenture’s own research, Gareth Wilson estimates the total revenue opportunity for UK banks alone, if they were to fulfil the existing demand for value-add services, to be as much as £8.5bn by 2020.

That’s quite a prize, but this type of business development can only be achieved if the service sector is prepared to step outside of their current ‘niche’ to work with with SME customers in a much more holistic and customer-centric way, and with the foundation objective of adding real value truly embedded in their measures of success.