This is the third in a three-part series that explores critical questions CX leaders should be asking – and able to answer. There is some overlap between issues and questions for B2C and B2B (covered previously) and B2B2C (covered here), but I’ve chosen to address each audience individually.
B2B2C experiences, such as those offered by insurance companies, are the most complex experiences to manage.
Not only do you need to win the loyalty of your distribution partners (such as agents), you also need to create an outstanding – but distinct – experience for your end customers, whose needs and goals are entirely different.
Winning the loyalty of your distribution partners will bring you more customers…but that won’t do you much good if your end users’ experience creates extra work for those same partners. Furthermore, your data on end users may be limited, with some interactions taking place outside of your systems. That makes the obstacles you face even trickier to navigate.
But I love a good challenge, so I find the complexity of B2B2C experiemces fascinating.
As I mentioned in my last two posts, one thing I’ve noticed in talking with hundreds of CX leaders is that their level of success usually corresponds to their level of knowledge about the health of the business.
Simply put, business leaders speak in business metrics, while CX leaders – the unsuccessful ones, that is – speak in survey scores. When I talk to one of the rare successful CX leaders, I find their vocabulary is much more aligned with other leaders in their organization, and they focus on issues such as customer loyalty and share of wallet.
Below are 10 questions (plus two bonus questions this time – we never stop adding value!) that you need to be able to address for your B2B2C CX program to have real business impact.
I’ve broken these down between the health of the business and the health of your customer experience. And to simplify the language, I’m using the term “agent” to describe your distribution customers, even though they might be financial professionals, retailers, or healthcare providers.
Critical Understanding of the Health of the Business
Start here to get a handle on how you currently serve customers and are rewarded.
1. Which dashboards are most commonly viewed by business leadership?
Surprise! Rather than starting with a specific metric, it’s most important to find the source of metrics used by other leaders. Are there a handful of shared dashboards? Does each department have its own?
Understanding the sources of “truth” for existing data will help you answer many of the following questions, so start here to ensure you’re aligned with the audiences you’re looking to win over.
2. How often do agents send business our way?
The ideal measurement is a share of wallet metric, which tracks the percentage of available business that agents send to you. Unfortunately, this isn’t available in most industries. The next best thing is to understand how often agents send business to you. As you improve your experience, this number should improve, too.
2.1 Do we have a lifetime value score?
I broke this bonus question out on its own because while every firm has profitability and complaints, not everyone has a lifetime value score. If you don’t, make this one of your initial efforts, as this score covers both retention and cross-selling.
A lifetime value score almost always makes sense for your distribution partners; for end customers, it varies by industry.
Allow me to illustrate: A lifetime value score makes perfect sense for a property and casualty insurance company, where they can not only cross-sell auto and home coverage, but also capture additional family members. Meanwhile, life insurance companies can upsell annuities, but that’s not particularly common, making a lifetime value score less useful. Similarly, health insurance companies should probably focus more on retention. Sure, they can sell health savings accounts and other products, but cross-selling is far less important at the consumer level.
3. How do we calculate churn and what is its current level?
Measuring churn for both agents and end customers is critical – even though churn is less common for distribution partners. (Because when it does happen, it can make a significant impact.) For example, life insurance policyholders rarely churn, but agents definitely can…and do.
Understanding this helps target initiatives. If you figure out that agents on the life insurance side churn more often than on the annuities side, you know where to focus.
4. What is the average length of customer retention?
The other side of the churn coin is the length of time customers stay with you. For some, focusing on this issue may be more helpful. Increasing retention for customers with shorter relationships, for example, can provide a relatively quick win.
You’ll also want to break this down in the same ways as churn to track changes over time. Here too, it is critical to track both agents and end customers.
One additional area to isolate is average retention for the 10% of customers who have been with you the longest and the 10% who churn the quickest, to help you see differences on both ends of the retention spectrum.
5. What is the profitability by average customer?
This is typically straightforward for end customers.
But profitability for agents gets more complicated, as they themselves don’t really pay you. You’ll need to consolidate results from their entire book of business. For agencies with multiple agents, a common scenario, the math gets even murkier.
Still, understanding this metric will help you create service levels based on the value provided by each agency and/or agent.
5.1 What is the average level of cross-sell or basket size?
This is most often an issue for your agents, as B2B2C companies usually have limited cross-sell to end customers. But of course, as noted earlier, this is an important measurement for property and casualty insurance.
Critical Understanding of the Health of the Customer Experience
The answers to these questions will provide a clearer picture of the impact of CX on the business.
1. What is the average number of calls per customer?
The sheer volume of calls makes this a significant cost driver…but never use that as an excuse to make it harder to contact you! That’s a recipe for disaster.
Instead, root out the source of calls and solve for it.
One of Heart of the Customer’s B2B2C clients receives 3,000 calls a day on billing questions from their end customers, which clearly indicates a point of focus: Do customers with certain products call more often? Do newer or more established customers call more?
Track agents and end customers separately, and flag repeated calls from an agent as a red-flag issue that should be investigated immediately.
Relatedly, also ask:
2. How much does the average service issue cost us?
End customers may cost $10 a call, but agent costs can vary widely…and usually upward. It’s typically a lot easier to resolve an end customer’s billing issue than reconcile quarterly commissions for an agent.
3. What are the top reasons for complaints?
Too many B2B2C companies fail to record their top call types. This makes it more difficult to track down the causes. Knowing these three facts for the client referenced above (3,000 calls a day for billing at $10 per call) allows you to easily craft a powerful business case. Who wouldn’t want to address an issue that’s costing you $200,000 a week?!
4. How do we measure customer sentiment?
What are the key surveys questions and when are they asked? Do we incorporate the voice of the business through operational and behavioral data?
Most CX leaders start here, but survey questions don’t provide much value without clearly understanding the business first.
5. Are my survey questions validated?
You might be thinking market researchers use a survey to validate their qualitative research, so why do we need to validate the quantitative data?
In this case, the validation is that your survey questions predict something important, typically one of the answers to your previous questions.
If you’re new, beginning your conversations with other organizational leaders by asking about survey questions might feel awkward, since your internal customers may not know (or really care) about surveys.
So starting with these 10 questions (plus those two bonuses – don’t forget about the bonuses!) will not only provide important learnings for you, it will also show your first concern is a healthy business that serves its customers well.
And you don’t want there to be any question about that!