What is customer relations – Importance and tips to improve.

Introduction

‘Customer is king’ is a phrase we have often heard in business. This phrase reflects the importance of customers in every business, be it a small family-owned one or a large enterprise. Businesses invest in customers to ensure they remain loyal and not abandon them when approached by competitors with better offers. This has led organizations to place customer relationship management at the heart of their marketing strategy. Today the market is flooded with software and platforms that will help you map the customer journey, manage your interactions with the customers, and turn them into loyal customers who stay with you and opt for repeat purchases. In this article, we will try and unravel customer relations, why it is important, who is responsible for it and few ways in which you can build customer relations.

What is customer relations?

It is often said that customer relations can make or break a business. So, what is customer relations? Customer relations is the sum of all activities and initiatives a company undertakes to engage with its customers and offer an excellent customer experience. Every interaction with the customer is an opportunity to build a positive customer relationship.

Companies invest a lot of time and effort in identifying prospects and then go through a well-documented sales-cycle process to convert them into paying customers. However, when it comes to post-purchase customer relations, it is often on the back burner. The truth is, for most companies the journey doesn’t end with customer acquisition. While it is the quality of the product or service you offer that brought them to you in the first place, it is the experience and relationship with a company that will make them want to stay.

In short, you need to have a solid customer relationship strategy to retain your customers.

Who is responsible for customer relations in a company?

Very often the management of customer relationships is given to a dedicated customer service team or a front-end customer contact center. But the truth is that everyone working in a company is responsible for customer relations. Customers can connect with the company through multiple channels. They can talk to the customer service team, the sales executive who sold him/her the product, call the toll-free number advertised on the guarantee card of the product, or even the CEO of the company. The response they receive and the experience will cement their opinion about the company. Hence, it is crucial to educate every employee in an organization on the importance of positive customer interaction and experience. They should be aware of your customer experience strategy and their role in achieving this. You should also provide them with a clear SOP on how to interact with customers. So, customer relations is nor the function of one team in an organization but something that should be championed by every employee.

Why is customer relations important?

A study done by PwC among 15,000 customers reveals that 1 in 3 customers will switch brands after just one bad experience, and 92% will completely switch companies and choose competition after two negative experiences. This establishes the importance of customer relations and satisfaction. There are multiple advantages to investing in positive customer relations.

Two key reasons you should invest in customer relations

1. New Customer Acquisition and Retention
Customer relations is the start point of any sale or transaction with a customer. Positive customer relations can influence what people think about a company and build the required customer trust to make them want to purchase your product or service. Happy customers often turn brand advocates and talk to friends and family about your brand or company.

A study by Qualtrics says that satisfied customers are 7 times more likely to purchase more from the company, 8 times more likely to try additional products and services the company sells, and 15 times more likely to speak positively of the company to their networks.

2. Customer satisfaction
Building a positive customer relationship is the first step to customer satisfaction. When you consistently engage in customer relationship activities, you can foster a deep connection with the customer. It is the highly fulfilling interactions with the company personnel, the ongoing customer engagement initiatives by the company, and effective customer service that leads to customer satisfaction, and loyalty.

Any organisation interacts with its customers at multiple interfaces for different situations. The objectives of all these initiatives is to build a stronger relationship with the customer which can benefit the organisation in the long run. Two important functions in the organisation dealing with customers are customer relations and customer services.

Customer relations vs Customer service

Difference between Customer Relations and Customer Service
One big difference between customer relations and customer service is that customer relation is almost always proactive while customer service is reactive. Customer relations have a positive connotation attached to it while customer service is often considered negative.

In customer relations, you are reaching out to the customer and looking for ways to add value to their customer experience. In these interactions, you are not trying to upsell or cross-sell your products. For eg. You could contact your customers through email with a tutorial on how to use your product more effectively, or service tips to enhance the life of your product, you could even send them a discount on the next subscription fee, etc. All these activities will fall under customer relations.

Customer service is when customers reach out to you with queries or problems that need a solution. We have noticed happy customers rarely reach out to a company. It is always the unhappy customer trying to connect with a company seeking resolution of a problem they are facing. Every time this happens, you need to be quick in your response, a process should be in place for the front-line executives to follow so that the customers are provided the best solution possible.

However, the truth is that whether you are reaching out to the customer or they are reaching out to you, every interaction matters, and it is an opportunity for the team to be responsive and present them with an experience that will result in satisfaction and loyalty.

Steps to take to build lasting customer relations

In this section, we are going to talk about various ways to build customer relations and create loyal customers.

1. Assess your current position: The first step to building a lasting customer relationship is to assess your current position. Do you have a system in place where you are interacting with your customers consistently? Are you collecting feedback regularly? Are your customers recommending you to their friends and family? What is their repeat purchase pattern? How long is a customer staying with you? What is the customer satisfaction score? Once you have this information you can build a roadmap on how to build and maintain positive customer relations.

2. Be transparent: Being transparent is the first step to creating trust among your customers. To achieve that you need to communicate openly and honestly with your customers. An often-quoted example is that of Domino’s pizza which gained the trust of customers, by being transparent. In 2008 a customer satisfaction survey they conducted amongst their customers yielded very negative results. They received feedback that their pizza tasted like cardboard etc. Dominos took the right step forward and published these results on social media and sought customer feedback and help in improving their quality. They received thousands of suggestions and Dominos worked on them for the next two years and focused on improving the quality of their base, sauce, topping, etc, and launched a much better product. They even communicated consistently with customers about the actions they were taking, the new processes they had in place, etc. The result was that they were able to build a much larger customer base who were engaged with them and trusted them when they launched their new product range.

3. Be real: Customer expectations need to be set right if you are looking to build positive customer relations. For that to happen the customer should know your company well, what you stand for, what you can do and cannot do. Communication regarding each of these points should be sent to them and every interaction should be authentic and convey the same message.

4. Communicate often and consistently: Adopt multi-channels to communicate with customers. Today customers interact with your brand or company through multiple channels. It could be the customer help desk software, company website, social media channels, etc. All these channels need to be used effectively to put out consistent messages. You can use emailers, newsletters, and even direct phone calls to communicate with them. Make sure that you engage in two-way communication and resort to active listening to improve customer relations.

5 Tips to improve customer relations

1. Collect customer data: Understanding your customer is the start point of any customer relations plan. Today information technology helps us collect substantial amounts of customer data which can be analyzed to further segment the customers. Once the customers have been segmented based on their unique needs, likes, purchase cycle, etc you can develop relevant customer relationship programs.

2. Formulate a CRM strategy: Now that you have segmented your customers based on their needs, you need to formulate a strategy on how to communicate with them, what vehicles or mediums to choose to communicate, and then most importantly what to communicate. The objective of segmentation is also to tailor your communication for each segment based on the unique needs identified. Put in place a CRM framework that points to the stage a customer is in in the customer journey map. Have relevant information ready for each point in the customer journey which will help the customer take one step forward effortlessly. Educate your employees and give them tools to reach out to customers and engage with them effectively and deliver personalized customer experiences.

3. Personalize customer interactions: Now that you have segmented your customers and there is a CRM strategy in place for each segment, the big challenge the companies face is how to execute the strategy. Customer expectations have hit the roof. They demand real-time interactions and you need to create a personalized customer journey for each individual. Every call made or mail sent to the customer should have the intent to develop a deeper emotional connection and to build loyalty towards the brand/company.

4. Create value for customers: There are many tried and tested methods that companies fall back on to create value for customers. Some of them are discounts, free trials, an extension of subscriptions, exclusive preview to new launches, special clubs, etc. Loyalty programs are yet another initiative that companies use to make their customers feel special and create loyalty. Now the focus has shifted to providing customers with content that is informative and useful to them. It could be regarding the products or even areas of interest specified by the customer. For example, if you have sold your customer an oven then you can easily conclude that they are interested in cooking/baking. Now how do you add value to such a customer? If the information gathered says that the customer is a young mom with school-going children then you can create different kinds of content that she will find useful and valuable. It could be 5-minute recipes for school lunch boxes, how to bake a birthday cake with 5 or fewer ingredients, or an invitation to attend a cooking class with an expert using the oven. These are value creation exercises. Every company can identify similar topics connected to their product or service and can use this as a driving force to create value for customers.

5. Exceed customer expectations: Companies need to go the extra mile and exceed customer expectations if they want to keep them for life. Exceeding customer expectations can positively affect the customer’s perception of your brand, retain the customer longer, and ultimately contribute to higher revenues.

Conclusion

Having gone through this topic in detail, it is clear that every employee should be made aware of the company’s vision concerning customer relationships and they should be equipped and empowered to deliver a great customer experiences across all the touchpoints. You will also need to invest in good customer relationship management software, business intelligence tools, and technology for managing customers better if you are seriously looking to improve your customer relationship scores.