WATCH NOW: Improve CX Using 80/20
Amid current economic conditions, leaders hypothesize that major customer pain points are price, lead times, and product availability. Yet, the number one customer need is engagement. Surprised? The results of our customer insights studies surprise the savviest leaders.
Our team conducted a macro-analysis of 25 studies that we completed with multiple manufacturing clients over 18 months. We reviewed qualitative and quantitative data from over 800 in-depth interviews with manufacturing distributors and end-users.
Engagement For the Win
In 80% of the studies, engagement was the top issue that manufacturing companies needed to improve. Both distributors and end-users had (and continue to have) an urgent need for improved relationships with their manufacturing suppliers.
If only it were as easy as price, delivery, or product. Engagement is so intangible. What does engagement mean? And what exactly do customers want when they refer to engagement? Fear not. We asked the experts: the customers.
First, they want their suppliers to be more proactive, especially when it comes to communication. They expect open dialogues around supply chain issues. They want information on the rising cost of materials and shipping. They demand more communication around lead time delays. When customers say they want more engagement, what they mean is more communication, collaboration, and visibility.
Our studies show that engagement trumps every other customer issue. Great customer engagement is a competitive advantage, and it’s in short supply. Highly rated manufacturers have strong engagement programs for their customer base and in particular, their top customers.
The data from our studies make it clear there is a direct correlation between engagement ratings and net promoter scores (NPS). Our clients that received the highest NPS also had best-in-class engagement ratings. Conversely, clients that we worked with that had low NPS scores also had very low engagement scores.
NPS & Engagement
When It Comes to Lead Times and Delivery, Don’t Underestimate The Power Of Communication.
The second critical area in which customers want improvement is lead times and delivery. I know, I know. You’re not surprised. But this is not a new issue. Before the pandemic, our programs revealed lead time issues as a major problem in the customer journey. Our macro-analysis shows that lead times have only been exasperated by Covid and global supply chain nightmares. In the past 18 months, our researchers have heard ad nauseum,"They are using Covid as an excuse; they've always been bad."
"They are using Covid as an excuse; they've always been bad."
You might expect the feedback was “shorten lead times,” and yes, customers do want shorter lead times. But they begged for more engagement around lead times. Customers want to stay better-informed on inventory levels and back-ordered products. They want honest communication around ship dates. And if a lead time is going to extend, they want that information shared as quickly as possible so they can plan. Bottom line: keep your customers apprised of delivery status and be transparent about supply chain and logistic issues.
Partnership: The Mother of Innovation
In our studies, customers voiced significant dissatisfaction with their manufacturing suppliers’ innovation. It was rare for a customer to articulate their exact needs. Instead, they want suppliers to dedicate time and resources to research and solve for their problems. The takeaway? Manufacturers must partner with customers to solve for pain points, enhance their products, and differentiate them from competitors. Further, manufacturers need to collaborate more to develop solutions that lead to more efficiency and cost-effectiveness.
We’ve done study after study in which we ask respondents if they would consider a client’s new offering. The response too often is, “I wish I knew they were working on that. It would be nice to collaborate.”
“I wish I knew they were working on that. It would be nice to collaborate.”
Again, the theme is ENGAGEMENT.
Innovation is not born in a vacuum. It is born via partnership. Your cross-functional team (product, marketing, design, engineering, etc) should engage with top customers for user-centered innovation. For manufacturers, innovation engagement is one of the best ways to achieve a competitive advantage. Your customers will feel heard, and you will gain user insights - a win-win.
The Bottom Line
Develop a culture of customer intimacy and engagement with your most important customers. In return, you'll enjoy loyalty, a higher share of wallet, and growing profitability. As the world emerges from the rubble left behind by Covid, manufacturers need to become closer to their top accounts. We've all experienced 18+ months of unprecedented challenges; customer engagement is the key to resilience, rebound, and growth.
About the Author
Sharon Kottke is Managing Director of Strategex's Customer Experience practice with 20+ years of experience in project management and customer insights. She leads the Customer Experience practice with a passion for delivering measurable results.