By JP Snow, Principal & Founder at Customer Catalytics, October 7, 2024

This article is part of our Customer Concepts series, which covers core ideas inherent to Customer Catalytics’ Customer Creation Model for driving growth, retention and scale.

The Complexity of Institutional Customer Relationships

The stakes were high, but the sales duo was ready. They recapped their planned agenda as they rode the elevator to their Fortune 100 client’s C-suite. This sales team represented one of the several units within a company that leads its sector through a diversified portfolio of businesses, both institutional and retail. The duo greeted their main contact, a senior leader whose broad scope involved contracts with three different divisions of the sales duo’s company. As the meeting progressed, they asked their client about her company’s emerging needs. They presented a series of relevant insights, generated specifically for her from her company’s purchase history. They  reiterated how much their firm valued the relationship and strived to know their customer.

That’s when things went off track. Their client informed the duo that just an hour ago, she’d wrapped up a similar meeting with their counterpart from another division. Though the two presentations covered different products, the end-users and their needs overlapped significantly. The duo’s firm had presented conflicting insights. More importantly, their claims of client focus had not extended to coordinating their relationship efforts, nor to leveraging their combined resources for maximum benefit to the client.

On their ride back down to the lobby, the duo started evaluating their company’s process improvement opportunities. The different business units had emerged at different times, some through acquisition. Each had its own Customer Relationship Management (CRM) system. Customers, including business-to-business (B2B) decision makers, could appear in multiple systems, with no way to connect their relationship context or even their names across systems.

In the previous article Why Customer Keys are Key to Success, I covered the fundamental importance of customer identifiers in direct-to-consumer businesses. I highlighted their role in enabling personalized experiences, comprehensive customer views, and long-term business scalability. Building on those foundational concepts, this piece delves into the more complex world of B2B and institutional customer identification. We’ll explore how the multi-layered nature of business relationships necessitates a more sophisticated approach to customer keys. I’ll also offer some recommendations for navigating the maze which, once accomplished, provides leverage for scale and competitive advantage.

Retail customer relationships can range from simple to complex. By comparison, institutional relationships can seem like a giant maze. Proving my point, new employees and external vendors often find themselves asking lots of questions about organizational structures and how decisions are made. Sometimes they even use language like “navigating the organization” or “mapping the hierarchy.” Large companies can have hundreds or even thousands of employees. Some make the buying decisions, while others influence them. In most cases, there are many others who represent the actual customer need as users of the provider company’s products.

Tracking these stakeholders requires the same types of customer identifiers described in the previous article mentioned above, plus additional context about each employee’s role. The customer definition needs to cover both the company and the stakeholders within it. Moreover, employees join and leave companies and shift roles within a firm far more frequently than personal and family relationships change. Companies also create new and changing sub-organizations, driven by M&A activities or organizational restructuring. A complete mapping needs to keep up with these definitions, especially if the provider company provides customer reporting or access permissions based on their customer’s roles within a multi-layered firm.

Dealing with multiple layers of employees isn’t the only challenge presented in serving institutional customers. In accounting, legal and financial services businesses, the customer can be a legal entity. Trusts, corporations and limited liability companies (LLCs) are all entities in and of themselves. They also have human customers designated for specific communication, coordination and decision-making roles. For example, a bank’s trust department is likely to have several distinct customer id and role code combinations for each trust it manages. In complex cases these could include ten or more people, such as the grantor, trustee, co-trustee, beneficiary, attorney, investment advisor and accountant. A specific individual could be mapped through multiple roles. It’s also possible for people to have roles across several or even hundreds of accounts, especially if they are in a profession that specializes in managing aspects of trusts.

High-Stakes Scenarios: Complex Use Cases in B2B Relationships

Customers are central to every business activity that creates value through sales, service or product penetration. As a result, a business’s ability to identify customers directly affects its ability to sustain and grow. Just as was shown in the opening example, customers can tell when businesses aren’t able to recognize the full breadth of their mutual relationship.

An accurate mapping of customers and their roles within a large organization is also essential for efficient marketing reach and sales efforts. Account-based marketing involves targeting a limited number of high value companies, which typically have more complex needs, longer sales cycles and layered customer hierarchies. Medical systems, software platforms and telecommunications are just a few examples of products areas exhibiting these traits. Where more general marketing approaches focus on breadth, account-based marketers invest in depth and specificity in reaching the right decision makers and influencers. When done well, a sales team’s map of its target clients’ org structure might include more insights about how decisions are made than the target company knows about itself. Done poorly, account-based marketers will have no chance of finding the right stakeholders or at building awareness through newsletters, events or content marketing.

Customer keys also provide the links used in the logic for business reporting and behavioral analytics. Business reporting use cases include a provider’s own sales and financial reporting, as well as any opportunities to provide relevant reports to their client, as part of a product or as a potential value add. The latter opportunity arises frequently in “digital transformation” efforts, where longstanding companies seek new ways to monetize the valuable data they’ve amassed. Structured ideation exercises often come up with ideas to provide customized reports and analytic insights to clients, using their own data about purchases and product use. The ideas sound promising until the teams responsible for exploring them discover they don’t have the data to deliver on the concept accurately. Rebuilding customer identifiers for a complex organization is far more expensive than getting them right in the first place.

Compared to retail customer IDs, institutional IDs are more complex and more expensive to implement. However, the higher stakes involved make doing so worthwhile. Large numbers of employees in layered hierarchies typically correlate to company size, revenue, and purchasing potential. Products purchased through complex procurement processes involve long sales cycles that require big investments of time and resources, often over the course of years for each contract. Knowing the decision makers and keeping track of their changes over time can make or break the success of those investments. Once successful those same challenges provide a protective moat that any potential competitors will face as well.

Mapping the Maze

Designing effective customer identification frameworks for institutional use cases. Involves all the same fundamentals applicable to retail use cases, but with more complexity and some additional considerations. See the predecessor article mentioned above for information about the properties necessary for quality identifiers, which include uniqueness, persistence, accessibility, scalability, security and fit for purpose.

Building a robust data model requires more expansive thinking about the potential ways customers might relate to each other, such as through multi-tiered organizational hierarchies, dotted line structures, and overlapping business units. A good data design will also allow for flexibility to add additional structures. For example, if two important corporate clients merge, the company that provides their retirement plans may suddenly need a new field that designates each employee’s original company relationship. The client company may require such capabilities for accuracy in reporting, and their provider will generate goodwill to the extent they can reflect those original relationships in their customer relationship management and customer service interactions with the client company’s employees.

Navigating the maze of B2B relationships requires a sophisticated approach to customer identification. By investing in robust, flexible customer key systems, businesses can enhance their account-based marketing, improve customer experiences, and unlock new opportunities for data-driven insights. As the complexity of institutional relationships continues to grow, those who master this maze will find themselves with a significant competitive advantage.

Actions to Catalyze Your Success

• Conduct a comprehensive audit of your current customer identification framework  to understand how it’s enabling or impeding your growth and scale
• Evaluate the use cases enabled by customer identification (see list above) to see if you’re fully realizing the potential benefits
• Create a roadmap for implementing or upgrading your customer identification framework, prioritizing quick wins while planning for long-term scalability and flexibility

This article is provided by Customer Catalytics, a customer analytics and strategy consulting firm. We help companies grow through insight, automation and leadership. For a complimentary consultation focused on your company’s growth needs, contact us or schedule an introductory meeting at www.customercatalytics.com/connect.

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