How to Manage Customer Relationships (With Importance)

By Indeed Editorial Team

Published 9 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Managing customer relationships is necessary to maintain a successful business. It builds a strong foundation for a company's customer base and helps it gather feedback to develop better products and services in the future. If you're handling customer relationships in your workplace, it's beneficial to assess these relationships and get tips for managing them. In this article, we define customer relationships, share eight ways to manage them, explain their importance and highlight their various types.

What are customer relationships?

Customer relationships involve forming strategic interactions with clients and gathering customer data to gain a deeper understanding of their preferences or purchasing behaviour. Companies may develop customer relationships at any stage of the customer buying journey. It's important to identify suitable activities at each stage to build a good impression of the brand. These interactions can be proactive, such as when a celebrity promotes an organisation's product. They can also be reactive, such as customers seeing a company's product advertisements on the streets.

8 ways to manage customer relationships

The following are eight methods you can use to manage customer relationships:

1. Get to know the customers

It's good to know your customers personally to establish a positive relationship from the beginning. This makes the customers feel you care for them and are happy to serve their needs, which also gives them a good impression of the company. For example, if you're in charge of a restaurant, you can personally speak to the customers and learn about their preferences or menu pairings. If you're a financial advisor, you can get to know your clients better by understanding their financial situation or their current job to offer suitable financial advice.

Related: What Is Good Customer Service? Definition and Guideline

2. Gather feedback

It's beneficial to solicit feedback from customers on how to improve the product or service and make changes accordingly. This makes the clients feel heard and more inclined to engage the company's services or buy its products as they feel that the organisation values their opinions. This helps the relationship between the company and the customer grow stronger as it improves trust and respect between them.

3. Resolve complaints

It's good to receive positive reviews but more important to address negative feedback from customers, as they can spread these sentiments to others, deterring future customers from patronising the business. It's important to quickly address customer complaints and provide efficient service recovery to salvage the relationship. Validate their feelings and rectify the situation to minimise their dissatisfaction. For instance, if a customer criticises your server, you may appease them by apologising and getting another server to assist them.

Related: How to Handle Difficult Customers in 10 Steps (With Tips)

4. Reward loyal customers

Establishing a rewards programme to encourage customer loyalty is a good way to prolong the customer's relationship with a company's brand and ensure consistent sales. It encourages customers to continue patronising the business and provides more opportunities for the brand to engage and develop stronger connections with clients. You can do so by setting small milestones for the customer to achieve and providing incentives, such as a loyalty stamp card with prizes for each stamp or a membership programme to accumulate points as buyers spend more on the brand.

5. Recruit good customer service staff

Companies rely on customer service personnel to represent the business in managing customer relationships, so finding people who possess good customer service skills and can portray the company's values is key. Some skills to look for include communication, social awareness, active listening and empathy. It's also advisable to provide training and have a consistent company image and brand message for staff to deliver.

Related: What Does a Service Crew Do? Definition, Skills and Examples

6. Communicate consistently

Consistent communication helps a brand to constantly connect with buyers. This increases the customers' awareness of the brand and builds a deeper impression of the company in their minds, which helps deter competitors' efforts to get their attention. You can do this by sending monthly newsletters or pop-up messages in applications to remind customers of the brand's ongoing activities. Another way is to utilise social media to interact with customers, such as by sharing positive messages, updating them on new events, doing question-and-answer sessions or posting customer testimonials.

Related: Social Media Specialist Skills: Definition and Examples

7. Monitor past customers

Track data, such as the number of first-time visits or purchases, to see how many customers didn't return, which may signify issues with the product or customer service. These insights are valuable in helping companies determine their product or service performance and devise suitable changes to improve their results. You can also conduct surveys to analyse customers' past purchasing experiences with the company. You may reach out to them personally and get feedback on their first visit. This makes the customer feel that the organisation values and appreciates them, which may rebuild a waning customer relationship.

Related: What Is After-Sales Service? (With Benefits and Examples)

8. Maintain integrity

Be upfront when there are issues within the company, whether they're operations, manufacturing or service challenges. Apologise if necessary and show your desire to improve the situation by communicating via online channels or in person if the company has a physical store. This makes the brand look authentic to customers, which helps them develop stronger connections with it. They may feel more ready to entrust you with their concerns and believe the company can solve their issues.

Why are customer relationships important?

Here are some reasons customer relationships are important to businesses:

Retaining customers

Building strong customer relationships helps companies retain customers' loyalty and interest in them. This ensures consistent sales from these buyers as they're more likely to continue supporting the brand and possibly recommend other potential clients. This increase in repeat visits and new customers allows businesses to grow their customer base further.

Improving brand reputation

When companies successfully build good customer relationships, it shows through their consistent sales and customer reviews, be it through word-of-mouth or social media. This allows the organisation to develop a positive brand reputation as more good reviews arise. A strong brand reputation can also attract new customers who may not be familiar with other brands in the industry and thus choose to purchase or engage with a more reputable company.

Improving future marketing efforts

Strong customer relationships allow companies to devise more effective marketing campaigns and help them achieve their objectives as they develop a better understanding of their customer's interests and the type of campaigns they might like. Marketing objectives could be website visits, engagement rates on social media or retail sales, depending on a company's situation. Loyal clients, gained through good customer relationships, are more likely to support the brand's marketing initiatives and may even help to spread news of the campaign to others. This can help improve the organisation's marketing efforts quickly and reach more potential customers.

Related: What Is Mass Marketing? (With Features, Examples and FAQs)

Gaining a competitive advantage over other brands

Having good customer relationships can give an organisation an advantage over the competition. It minimises the possibility of customers switching to other brands since they already feel familiar with the company's products and trust their quality. It also makes it harder for other brands to influence these customers to support the alternative brand instead. This serves as a good deterrent against industry competitors or future brands entering the market. In the long term, it helps the company grow their market share and hold a stronger position in the industry.

Types of customer relationships

Understanding the different kinds of customer relationships can help you manage them better. Here's a list of types of these relationships:

  • Transactional: There are usually few to no personal interactions in such relationships. They exist to fulfil essential services or needs, such as an automated teller machine.

  • Long term: This type of customer relationship involves interactions on a recurring basis as customers require services or products after the initial transaction to maintain or repair items. Some examples include nail salons, vehicle repair shops, electronic stores and dental clinics.

  • Personal assistance: This refers to close interactions with customers and typically involves only one representative and one customer. A call centre is one example where customers receive close attention and assistance.

  • Dedicated personal assistance: This customer relationship involves a dedicated representative to serve the customer, such as an insurance agent. They may have multiple clients, but they serve each of them personally and engage closely with them.

  • Self-service: These relationships involve fewer interactions with customers, as the company provides tools for customers to complete their tasks. They only offer some staff to assist with enquiries or issues with using the tools, such as with self-checkout counters at supermarkets.

  • Community: Companies use community-based customer relationships to let customers interact with staff and other customers, creating a cohesive space for discussion to solve challenges, share information or help the organisation learn more about their clients. For instance, a skincare company may set up an online chat for buyers to share their skincare concerns and let staff or other customers offer advice.

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