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B2B Customer Centricity

by with One Comment English post

Research studies have confirmed that customer centricity significantly impacts business success (e.g., Harvard, McKinsey, University of St. Gallen, Walker).

Indeed customer centricity is a global approach that all company departments must adapt to, which imposes a particular way of organizing the company and management style. Product orientation, which offers the same product for all markets, is fundamentally opposed to it. Customer centricity promotes a culture of treating customers with respect. This improves the customer experience and increases customer satisfaction.

business man with two customers

Today, customers are experimenting with new relational and operational models that are changing their expectations. Moreover, they want more speed, fluidity, and personalization. Only a few B2B companies have implemented a strategy focused on customer centricity. Also, we will develop the points for successfully implementing customer focus to improve your results.

It implements a practical approach that includes the involvement of all the company’s employees, managers, and operational staff. Then, it is also compulsory to have a common objective; to satisfy customers’ expectations.

In the company, four departments have an impact on customer orientation:

      

  • General management
  • Middle management
  • The employees
  • The customer

Internal viewpoint

Within the company, customer orientation must be a common desire. It can be achieved through group training but also solid internal communication.

Knowing how to listen to your customers

Customers are essential assets for the development of various offers and strategies. Listening to customers by conducting satisfaction surveys is an important point. Then you can meet customers’ expectations and build and maintain a special relationship with them by listening. Valued customers are satisfied customers.

Two main factors in customer culture

1. The values of each employee

Generally, empathetic employees are naturally customer-centric. If not, they are easy to convince. Through workshops and training days, employees must be aware of customer culture’s importance. The role of middle management is to act as a link between employees and management.

2. Values promoted by the organization

Identically to the employee’s natural values, there are values communicated by management and shared at all levels. Companies must value their employees for these values to permeate and be shared. In return, these employees treat their customers well. This phenomenon is called attentional symmetry.

Tips for improving your customer-centricity

Additionally, companies use personas and fictitious people who represent typical customers to improve customer focus. Team members who can attend meetings to guide the strategy better embody this.

To conclude

A customer-centric culture is good for business. It helps you better target your customers, understand your market, reduce churn, and increase sales. The time has come for B2B companies to bring their customer-centric programs to the forefront.

Katrium is here to help your company to improve its customer centricity.

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Offshoring isn’t only for lowering your costs

by with One Comment English post
Offshoring is an outsorcing process to a distant country

Outsourcing to a distant country

Offshoring consists of subcontracting particular services to other specific geographical areas to reduce costs. The companies often offshore their production process to countries where work power is cheaper than in their original countries. It also offers the perfect opportunity for possible expansion and even more flexibility, such as customer service hours. For example, having a customer service team based in Australia will help you cover the hours of a 24-hour phone line.

Offshore services is very common in business. For example, a lot of companies outsource their costumer service to a movil phone operator. In this way, they manage customer care from locations where this service is cheaper and saves costs for the company.

Offshoring also includes hiring a single foreign employee who may be better equipped for the job than the talent available near your company’s location. If you can do the job remotely, why not open a global search? 

Types of offshoring

Depending on the company and its needs, there are different types of offshoring. These can be understood from other points of view, as it can be done in many different ways.

Depending on the point of view, we could classify the different types of offshoring according to the following characteristics:

  • Ownership
  • Distance
  • Process

Ownership

Offshoring: The company establishes sites in the regions to which it intends to relocate, with the company itself providing the capital and assets to carry out the processes.

Outsourcing: The company agrees with a company to contract the elaboration of some process or service. An external and independent company carries out these tasks.

Offshoring distance

Offshoring to distant territories: You can get lower production costs in these countries. However, there is a more significant cultural asymmetry.

Nearshoring: Relocation to nearby territories. This practice is increasingly common, especially in the United States with its neighboring countries. Hence the name “nearshoring.”

Processes

Services: This consists of the provision of services abroad. Very common in services such as customer service.

Manufacturing: outsource of production processes to factories and production sites abroad.

Sales: This occurs when companies wish to open up new markets and establish new sales networks.

Research and development: This consists of offshoring those activities that add value to the service or product. In this way, many companies establish their research centers in more developed locations.

Advantages and disadvantages of offshoring

When a company decides to apply offshoring in its business, it should be aware that it is not all advantages. Even if cost savings are significant, other risk factors, such as the loss of intellectual property have caused significant problems. 

For this reason, if a company decides outshore to a distant country, it should be aware that several advantages and disadvantages are fundamental. 

Among the advantages of offshoring, we could highlight the following:

  • Cost savings.
  • Increased productivity.
  • Opening up new markets.
  • Hiring cheap labor. 
  • Diversification of risk.

On the other hand, the disadvantages of offshoring include:

  • Loss of intellectual property.
  • Cultural and linguistic conflict.
  • Loss of product quality.
  • Precarious workers.
  • Loss of control in the company.

1. Cost savings 

This is probably the most apparent benefit of offshoring. By offshoring to a country where labor is cheaper, you automatically save money on both services and production (as long as shipping is not more expensive).  

The continent where the accounting department is located is likely to have much lower rental costs. This benefit includes labor costs in the country where you have offshored and the cost of office space. You don’t have to worry about where to put the accounting department if it is on another continent. 

2. Tax benefits 

This is another excellent way to save money. If you choose your offshoring location carefully, you will be able to take advantage of tax breaks if the foreign government is trying to stimulate the local economy by reducing taxes for businesses. 

3. New markets and ease of scaling up 

Offshoring parts of your business will meke much easier for you to open up new markets. After doing that, is much easier to expand in the country you are offshoring to, and hiring new foreign workers is less of a financial burden. 

4. Experience 

Offshoring allows you to access a completely different field of professionals and create a diverse and talented team by hiring foreign employees at lower labor costs. 

 

Select an offshoring reliable partner

Offshoring is an excellent alternative to significantly lower production costs and expanding a business. As we can see, it is also necessary to weigh up the cons of offshoring. Because of that, it is essential to draw up a detailed plan that determines the objectives of the business strategy. It is critical to deal with the risks or drawbacks that certain operations in a foreign country may entail.

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Subcontracting or outsourcing: how to choose?

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Outsourcing Vs. Subcontracting: which is the best?

As is well known, within organizations, companies develop different processes in diverse business areas to achieve their objectives. Some companies need to focus on the most critical processes. Because of that, they invest more resources in the areas they consider most relevant for the organization’s development. As a result, some companies decide to reduce the burden of fewer core activities by subcontracting to external agents.

At the same time, companies seek to reduce costs and increase levels of competitiveness. And many choose to do so in the same way: by subcontracting external professional staff to facilitate the execution of activities. As they are agents from outside the organization, the generated costs are lower than those obtained through internal resources.
This technique allows the entry of external personnel into the organizations to carry out the tasks that the company is known as “outsourcing.”

Outsourcing

Today’s managers running their organizations face a host of changes, which include:

  • Globalizing activities.
  • Growing without having to use more resources (more capital).
  • Reducing costs.
  • Understanding consumer tastes.
  • The need to respond to threats and, above all, to opportunities.
  • The aging workforce

What identifies outsourcing as a practice carried out by an organization is that a third party performs one or more functions that were previously the organization’s own. At a certain point and for various reasons, the company stops performing them and transfers them to a third party.

Many people confuse outsourcing with subcontracting, but there are essential differences between the two. In subcontracting, the company that contracts the service only determines the work, and the contractor fulfills it. On the other hand, there is an exchange of information, coordination, and, above all, trust in outsourcing.

For example, call centers are where telephone assistance is provided personally to customers. These companies can help from outside the client’s home country, India, Pakistan, Uruguay, and the Philippines. Outsourcing this service provides a competitive advantage to the organization. It is a way to reduce costs in customer service, as it is much cheaper than having an internal department responsible for this activity.

Outsourcing or subcontracting?

In the past, many considered outsourcing a way to reduce costs. Nowadays, it has proven to be a beneficial technique for the growth of companies for reasons such as the following:

  • Cost reduction and control. In some cases, it is cheaper to outsource certain activities to third parties than to have the organization itself carry them out).
  • Having high capacity staff.
  • Allocate most of the resources and investments to the organization’s primary objectives.
  • Greater efficiency.
  • You will get instant access to technology but with out the need of constant invest.
  • Improve response times.
  • Transfer the challenge of technological innovation and evolution to the service provider.

Aspects to take into account when making an outsourcing or subcontracting contract.

Don't matter if you are subcontracting or outsourcing: select the correct partner.

The outsourcing, being a contract, acquires a legal character and is the main element between the company that requests the outsourcing services and the company that provides them. Within this contract, three dates are essential: the date the contract is signed, when the service provider will start performing its activities, and when the terms of the agreement will come into effect.

The following factors need to be considered when making the outsourcing contract:

Initial decisions.

  • Establish the services to be outsourced will be your first decition.
  • Determine the resources you will use in the negotiation (technical expertise, legal advice, functional management).
  • Establish the start date of the contract and the end date.
  • Ensure the feasibility of using external agents. 

Terms.

  • Identify the location(s) where our partner will perform the outsourcing services.
  • Determine the equipment your supplier will need to provide the services. Even if it isn’t your resposability, it could be useful consider it.
  • Establish the terms of reference for the services and their level.

The facilities.

  • Establish if our supplier will carry out the services at our facilities or their ones 
  • Establish whether facilities requiring a separate contract will be rented or sold to the supplier.

Method of payment.

  • Establish the process for calculating payment for the service.
  • Define whether any charge our partner will make for material and time.
  • Establish the method of payment.
  • Define whether a discount system our partner will apply for non-compliance with any of the contract terms.

Conclusion.

If you use it correctly, outsourcing is a tool for the management of organizations brings multiple benefits.

With outsourcing, the company that hires the service can disengage from the activities that do not require its full attention to concentrate on the areas of greater importance, leaving the less relevant activities to external companies.