B2B CX Case Study: Connecting Experience, Operational and Financial Data to Enable Better Business Decisions

Reliable supply of high-quality product is a foundational need and expectation that all B2B customers place on their manufacturing suppliers. Yet, this remains one of the most difficult challenges that manufacturers face – especially those with complex and long supply chains that require balancing significant trade-offs between customer expectations, cost-to-serve, and cash flow.

In 2022, Dow completed an extensive study that combined VOC data, customer research data, and operational data to help answer an only apparently simple question:
“What impact does inventory have on business outcomes, and how does customer experience help explain that impact?”

We started with the hypothesis that the key step in the customer journey where customers are exposed to the impact of inventory (or lack of thereof) is at the time of order placement. We tested and validated our hypothesis by examining the relationship between customer experience at order placement (experience metric from VOC data) and Available-to-Promise performance (operational metric from ERP transactional records).
We set out to determine if the customer experience with product availability at the time of order entry was a significant driver of overall satisfaction and of their buying behavior.

We started from the notion that often-overlooked emotions play a critical role in B2B decision-making. We further hypothesized that “Confidence” was the key emotion in play at the order entry touchpoint. Gartner research shows that “just a 5% increase in confidence can double the likelihood of a high-quality, low-regret deal,” and we were able to demonstrate that repeated bad experiences with product availability at order placement resulted in significant erosion of customer confidence. We also demonstrated that the impact on confidence extended to a broader set of customer personas, beyond those involved in tactical order placement – up to key decision-makers.

Finally, we were able to show how confidence has an enormous impact on overall CX Index, which at Dow we measure based on how Easy, how Enjoyable and how Effective customers say is to do business with Dow: our CX index for “Confident” customers was 10x the CX index of “Non-confident” customers!

Using our financial model that connects Volume/Revenue/Margin growth with CX Index, we were able to conclude with statistical certainty, that when inventory results in repeated negative order placement experiences, that undermines customer confidence, there is a measurable impact on customer growth with Dow. In other words, the risk exists of trading cash flow this quarter (inventory trade-off) with EBIT of multiple future quarters (growth trade-off).

Because expectations around optimizing cash flow will never go away, our findings were instrumental in securing continued investment in integrated planning and inventory optimization technologies that enable us to operate with lower inventory while maintaining or improving CX. This is the power of CX at Dow, turning historical “either-or” tradeoffs onto “both-and” opportunities, enabled by data, science, and digital capabilities and to the benefit of both customers and shareholders."

Presentation

Riccardo Porta
Global Director for CX,
DOW