Lecture 2(b)

Kevin Heffernan

2(b):The Customer Journey

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B2C: Airline Customer Journey Map

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2 key Questions at heart of B2B marketing

1. How do people make choices?

– in favour of one supplier rather than another, and

2. How can we push aside an incumbent

supplier?
– and break into a new account.

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 Kahneman(Noble Prize) Psychologist:
• argued decisions are made in 2 ways:

– system 1 thinking.
• This is fast, emotional, instinctive and subconscious.
• A tiger in the woods scenario..

– system 2 thinking.
• This is slower, more calculating and apparently more
logical.
• Generally more associated with B2B

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Slow & fast thinking in Business Decisions

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Decision-Making According To Spend & Strategic
Importance

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 The importance of “brand” in influencing
supplier choice
• No simple or single way businesses make decisions
• More difficult decision= stronger emotional influence
• Complex decisions involve considerable detail
– Brands become a ‘crutch’ to lean on.
– Synthesising everything we know about a product/company
– Malcolm Gladwell, in his book Blink, argues
• ‘that the lengthy procrastination that often takes place in decision-
making is a “post self-justification” because actually we make our mind
up in a blink’. Brands help us do this.
– Brands can get into the ‘considered set’ moving
through the customer journey.
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 The Role of Brands in The Decision Making Part of The
Customer Journey
• Which suppliers to consider?
• The mother brand influences the small assemblage of companies
Stage 1 in the consideration set

• Comparison of features and benefits

• Rational thinking and logic begin to play an important role as the decision
makers consider the pros and cons of the suppliers in the consideration
set.
Stage 2 • Brands influence the perceptions on all attributes that are on offer by
the suppliers

• The final choice

• When there is little to choose between suppliers in terms of their
performance, their price and availability,
Stage 3 • the brand kicks in again and influences the final decision

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 Pushing aside incumbents
• The influence of inertia on supplier choice: an example of a survey of an
incumbent:
– Q. What do you look for when choosing a new supplier?
– A. Quality is really important. Of course, the product must also be available and at a
very competitive price.
– Q. How easy or difficult would it be for you to switch suppliers?
– A. We would have to do some tests of the new product but in principle, it wouldn’t be
too difficult.
– Q. How often have you changed or introduced a new supplier in the last five years?
– A. We haven’t.
– 40% to 50% of companies have not introduced any new suppliers of a product in the
last five years. (B2B Marketing)

• Why?
– Businesses are risk averse- the devil you know…
– Businesses don’t like unnecessary effort- inertia
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 Winning new business
• Requires understanding where a customer sits in the ‘life cycle’ with the
supplier

• Understand what is driving the potential supplier change

– Eg: at early stage of customer Journey, a junior member may research for a number
of suppliers of interest..

• Businesses mostly look for replacement supplier if there is ‘pain’ with

existing one:
– Poor delivery, poor quality, a difficult relationship, etc.

• More people involved as greater knowledge trickles down.

– Operational & Technical involvement to ensure ‘fit’ with process/service
– Procurement- check prices

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B2B Decision Making and the Customer Journey

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Loyalty:
keeping
those you
have

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 The cost of customer acquisition compared to
the cost of customers staying loyal.
• It’s not difficult to change suppliers.

• 5 to 20 times more costly to find new customers.

• Most profitable firms = 95% customer retention.

• Most firms have retention rates significantly below 80%

• Defecting customers tell 8-10 others.

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 Examples:
Differing
Causal
Models of
Drivers
and
Customer
Loyalty
(Garcia & Caro, 2008)

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 What engenders loyalty?
CUSTOMERS DEFECT FOR 2 REASONS:
1. Need for product/service ceased
2. Product/service bought fails to satisfy their needs… in some way.

Engendering Loyalty:
• High quality of product service engenders loyalty
• A referral from a loyal customer has a 92% retention rate compared
with 68% for a customer acquired from advertising (Bleuel, 2008)

‘Customer loyalty is driven by small things, the softer things that are
harder to measure, and the little things which in isolation seem
inconsequential(Haque, 2004)

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Important steps in achieving customer devotion
Step 1:make sure the basics are right

• Quality of product & service & delivery,

• Price must be good value- not necessarily the cheapest

Step 2: work on the softer issues

• Loyalty is based on strength of the relationship
• Little things- going beyond expectations
• Things go wrong: Use the ‘fix it+ 1’ Syndrome: repair plus add
something that makes customer say ‘wow’

Step 3: Measure & Control EVERYHTING

• Customer churn, complaints, satisfaction, frequency of

introducing new suppliers, and likelihood of recommending.
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The marketing Funnell (White, 2018)

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Most Influential touchpoints by customer
& company (McKinsey, 2016)

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B2B Buying Process (Edmond, 2017)

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 Thank you.
• Part 2: Continued next week

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