A lot of things are important to businesses, but customers are perhaps among the most critical.
The way you manage customers can make a huge impact on your business. Relationship management has flow on effects for customer retention, referrals and revenue.
The problem is, small business owners are often time poor. They may not have the hours in the day to dedicate to hands-on relationship management. Fortunately, it doesn’t have to take up all your time.
Small businesses often have the most to gain from healthy relationship management with customers. To optimise the customer experience and promote loyalty, collect and implement feedback, empower staff, treat customers like people and be committed to going above and beyond whenever you get the chance.
What are customer relations?
Customer relations are about the way you interact with customers. It includes every touch point between you and them – all of those engagements come together to ultimately become the customer experience.
Good customer relationship development includes both reactive and proactive activity.
Reactive relationship management is about how you address customer issues. They tend to come to you first, whether it’s through a complaint or customer support query.
Proactive relationship management is when you front-foot long term relationship building. It’s how you nurture brand loyalty and engage with customers to satisfy their needs, creating mutual benefit for both you and them.
Why is customer relationship management important for businesses?
Good client relationship management has a range of benefits, particularly for small businesses.
By creating customer loyalty, you encourage repeat business. It costs money and takes time to attract customers, and retaining customers allows you to get a much better return on that initial investment.
Small businesses typically don’t have large marketing budgets, so client relationship management is one way to make your marketing spend go further.
Customer retention can be significant too – Hubspot research found retained customers buy more often and spend more than new customers. In fact, the study found a 5% increase in customer retention can increase revenue by up to 95%.
Small businesses are notoriously fickle, and having a base of loyal, regular customers helps to smooth the path you’re on. These customers become a reliable base that you can build your business on, rather than starting each month fresh, looking to find more new clients.
Benefits of strong customer relations
Good customer relationships in business create mutual benefits for both you and them. You have a steady income from them, and they get the service and solutions they need.
This provides value in a handful of areas:
Customer loyalty is about more than just satisfaction. A satisfied customer can still be drawn to your competitors, but a loyal customer will stick with you no matter what.
Loyalty is about consistently providing high quality products and/or services, while also nurturing their trust in you. Many customers want to find a reliable business to satisfy their needs, and if you can become that business, they’ll come back again and again.
A good client relationship has potential benefits beyond just the individual customer. All of your customers have their own networks, and the potential to become brand ambassadors for you.
Referrals are highly effective – when someone you trust recommends something to you, that recommendation carries weight. By growing a great customer relationship with one person, you enable them to refer you to people they know when the opportunity arises.
They’re also cheap. It doesn’t cost you anything to have one customer recommend you to someone else – you just need to do a great job for them.
Lifetime customer value
Lifetime value is a metric that measures how much a customer is worth to your business. The higher this figure, the better it is for your bottom line.
Unhappy customers lead to higher costs. Complaints, returns, queries and customer service requests all cost money and take time.
When you build client relationships that don’t take up time dealing with these types of issues, you can save a lot of money – not to mention avoid frustration!
Advice on customer relationships for small businesses
1. Listen to what customers say
Customers have a perspective on your business that you don’t, and their feedback really matters. The thing is, customers may not always pass on what they think. Often, rather than submit feedback, they’ll just say nothing and go elsewhere next time.
It’s important to open up avenues of communication for customers to talk to you about their experience. Social media, surveys, polls and Google reviews are all great places to gather feedback if you use them.
The next step is to actually take feedback on board and make changes when they’re necessary. Receiving feedback is only one part of the solution – you have to use it to make improvements.
2. Empower your staff
Employees are the front line of your business – they’re the ones who deal with customers and they have the power to make or break client relationships.
Give staff the freedom to make decisions that help to build customer relationships. For example, a customer service team member should be able to remediate an issue so a customer leaves satisfied.
By resolving issues in real time, or making on the spot decisions with the customer relationship in mind, it saves time and makes for a much more pleasurable customer experience.
3. Treat customers like people
The human touch is important, and treating people like people goes a long way. Don’t view customers as transactions – be authentic, friendly and polite.
- Show some personality in your social media
- Communicate clearly and effectively, so customers feel informed
- Provide in-person customer service, and make the service accessible
- Follow up after issues or purchases to check it was satisfactory
- Say please and thank you. It’s not hard, and it goes a long way!
4. Use CRM software
Customer relationships in business don’t exist in isolation – you’re probably juggling a number of different clients at the same time.
CRM software is how you manage relationships with all your different clients efficiently and effectively. It’s the home for your communication, work management and customer segmentation.
It allows you to speak to customers with context, automate tasks and deliver customised pricing plans without losing track of where each customer is at.
5. Promote loyalty
Loyalty schemes or rewards for referrals are fantastic incentives for customers that encourage repeat business. It actually makes it worth their while, which makes a big difference compared to waiting for it to happen organically.
There’s a range of pricing schemes that are easy to apply to customers who refer a friend, and they’re extremely cost effective.
6. Use remarketing campaigns
Remarketing campaigns are about keeping in touch with customers after they buy from you. Collect details and let them know if you have a sale on, if you’ve got new stock in, or if you’re doing something that could be of interest.
As the saying goes, out of sight, out of mind. Remarketing keeps you on your customers’ radar so they remember the fantastic experience you gave them.
Take home message
Customer relationship management ultimately comes down to how much you care. The effort you put in to promote customer loyalty doesn’t actually need to be significant, and it can make a genuine difference to your business.
By prioritising the customer experience and being committed to developing good business relationships, it won’t take long to see the difference. Often, it doesn’t cost you anything or take you any extra time at all.
Lastly, remember to keep the customer relationship front of mind at all times. Loyalty is hard won and easily lost, which means every interaction with a customer can have a big influence on how they feel about you.
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