B2B Customer Satisfaction Case Study
“With Circle it’s like you’re talking to a colleague not a supplier, and that’s the best thing about them. You could put one of the Circle team here and they could work as a member of our business quite easily, they understand our business better then a lot of people in our business…I can’t speak highly enough of them. They just keep delivering.”
Farnell element14 is a global distributor of electronic components to design engineers and those maintaining electronic systems. From smartphones to central heating system controls – if it has electronics in it, the chances are that Farnell element14 helped to enable its creation. Founded in 1939, the company is now a member of the FTSE 250 and serves customers from distribution centres in Europe, Asia and North America. Circle has been Farnell’s research partner for the last three years, spanning more than 30 projects to date.
The Research Project
Farnell element14 has a significant annual marketing budget and was investing in many channels including email marketing, Pay-Per-Click (PPC), direct mail and trade advertising. But determining the return on investment from these types of activities is tough – the impact is not always measurable and ’cause and effect’ is not always obvious. Any result may also be indirect and more about enhanced brand strength which will impact future sales, rather than specific revenue increase.
Given these difficulties measuring ROI, like many B2B organisations Farnell element14 was unsure of exactly where to target its marketing investment for the optimal return. The brief to Circle was to give a definitive answer to the question ‘how do we best communicate with our target audience across Europe?’
We took a three stage approach to answer this question.
Stage one took advantage of a regular customer satisfaction study which we conduct for Farnell across eleven European countries. This survey includes a ‘floating module’ which allows us to insert questions about a specific subject on a one-off basis. In this case it enabled us to understand the media consumption habits and communication preferences of Farnell’s European customers. For example, what publications do they read? Do they socialise on professional online forums? How effective do they feel different types of direct communication from distributors like Farnell are?
Stage two saw us engage with a small but representative section of Farnell’s customer base to explore their media habits in depth. We asked them to complete a media diary for four weeks, in which they recorded every single communication received from suppliers and every media encounter they had. This included not only any direct mail, telemarketing and email communication they received, but also any adverts in trade magazines, banner adverts on websites, mentions of suppliers on industry forums and so on. We also asked them to keep copies of the marketing communications they saw and note their feelings about, and reactions to, each one.
This very detailed phase of the research project was a big commitment for the customers involved, and it was vital to avoid any drop-outs. To tackle this we kept them engaged during the four weeks through regular communication and by asking them to submit their diaries once a week for review.
At the end of the four weeks we then conducted a two hour, in-depth interview with each customer. These very rich discussions explored their communication habits and preferences in great detail, as well as looking at the marketing materials they had gathered in order to understand their views on what works, what doesn’t and why.
Finally, mindful of Farnell’s sizable investment in Pay-Per-Click (PPC) we sought to explore the customer’s buying journey and the role of PPC in enabling this. To do so we conducted an online survey of 1,500 European customers acquired via PPC. This revealed valuable insights into the role of the internet in purchase decisions, how customers search online and how PPC investment could be most effectively targeted.
The Key Findings
The findings of the research programme were counter-intuitive.
Because of the nature of the target audience, we discovered that they actually liked receiving marketing communications. Electronic design engineers rely on having up-to-date product knowledge to perform to the highest level. By providing updates on new technologies through their marketing communications, Farnell element14 was actually helping them to be more effective. Indeed, many of these marketing communications were filed away for future reference, rather than simply being glanced at and thrown in the bin. The recommendation therefore was to increase the volume of communications and ensure they include information of value to engineers, e.g. new product launches, usage ideas for different technologies.
However, whilst customers were happy to receive even more information from partners like Farnell element14, crucially this had to be relevant to them. Each engineer has a different speciality – for example medical, consumer, aerospace or military electronics – so the marketing messages which Farnell element14 sends need to be tailored to be relevant to them personally. This led to a clear recommendation for action which was to more formally segment the customer database and tailor marketing messages accordingly.
The survey also provided clear guidance around the type of marketing channels which should be used and how. For example, email shots were a clear preference amongst this target audience as they provide just the right balance of detail and digestibility. The research also revealed the optimum length of these emails, the number of topics which should be covered in each one, the specific topic areas of greatest interest and the attributes of a compelling subject line – all vital information for Farnell’s campaign managers.
With regard to Farnell element14’s PPC activity, again, the outcome was surprising. Despite Search Engines’ claims that the majority of PPC traffic is incremental business, we discovered that in Farnell’s case many customers acquired via PPC were not new. Rather, they were existing customers simply using a search engine as a quick way to find the product they wanted, instead of using the search facility on the Farnell’s own website. This led to a recommendation to review the functionality of Farnell’s website and enhance the search function.
The Ultimate Result
The research is already changing the way Farnell plans its campaigns. Customer Experience Consultant Mark Phelan explains further:
“One of the key messages we got from this research project was the need for relevance of the communication. Segmentation of your customer base is good marketing practice anyway, and we were already doing it to a degree – but this has very much pushed it up the agenda, so that’s now our big focus for the next year. There is no point sending more information if it’s not relevant. This research highlighted the need for us to have market-leading segmentation, and we are now going through this process.”
In tandem with adopting a segmented approach, Farnell’s marketing team are also making changes to the ongoing email marketing activity that they carry out, using insight from the research to help them determine things like the use of imagery, volume of text and so on – as Mark continues:
“It’s definitely made us more thoughtful and aware of things like the impact of the subject line or the number of subjects to cover in an email. These were all the sorts of things we wanted to know, and the research has given us some clear specifics. Now we find ourselves thinking ‘there’s a bit too much info there’ or ‘that’s too many different messages’ or ‘the subject line is not right’. This extra layer of rigour has almost become business as usual since the research. We have changed our business behaviour by having that insight and knowledge – it’s just in our DNA now.”
Understanding more about Farnell element 14’s PPC activity was also another important part of the research. The findings were extremely useful, if unexpected, and whilst it might have first appeared that Mark should reduce the amount of money spent on PPC advertising, further investigation of the overall results of the project led him to make a different decision.
“For us, the real finding was the value of the other activity we were carrying out and how that actually supports the PPC campaign. We could have scrapped everything else and piled our entire budget into PPC but that would have been a mistake. What the research told us is that yes, PPC has value and brings in money – although some of it might have come in anyway – but all the other things we do are really important too.
The other ‘traditional’ activity primes the customer so that, when they are searching for something, the name Farnell or their knowledge of us as a company is ‘seeded’ in their minds. The activity we do offline maintains a subconscious awareness and influences their decision-making as to where to click from a search results page.”
An Ongoing Relationship
Good research is never interpreted in a vacuum. Over the last three years we have completed more than 30 different projects for Farnell, and the outcomes of these feed into each other to generate added benefit, as Mark explains:
“The benefit of Circle is that, because they have been working with us for so long, when we are looking at any big piece of bespoke research, they have the ability to remember all the other research projects they have done for us, even if we’ve forgotten them – and where necessary, to weave it in to add some layers of other information. That’s the real beauty of having those longstanding relationships. You look at it all as a collective piece after three years and you say ‘Wow, we didn’t have all this before Circle’.
Two particular projects spring to mind. One where we were considering making a huge investment into a particular product range for a specific industry sector, but Circle’s research told us that we would not get the sales we hoped for. That piece of insight alone probably saved us millions.
A more recent example is where Circle’s findings have helped us to change our delivery strategy in a particular European country in order to increase market share over our main competitor. In the short term, this new initiative is costing us significant amounts of money, so it really goes to prove that we believe in Circle’s research findings and recommendations, and that we take action as a result.”
The ability to take specific actions like these as a result of working with Circle is what makes the real difference for Farnell element14. By understanding what matters to their customers and how best to communicate with them, Farnell is seen as a trusted source of information about new products and new technologies. And gaining this position of trust has been made possible in no small part due to their relationship with Circle, as Mark concludes:
“With Circle it’s like you’re talking to a colleague not a supplier, and that’s the best thing about them. You could put one of the Circle team here and they could work as a member of our business quite easily, they understand our business better then a lot of people in our business.
They invest a lot of time in really understanding your business and your industry – they really get under the skin of your business. You can put them in front of your senior people and they talk the same language. I can’t speak highly enough of them. They just keep delivering.”