Clients are the lifeblood of all small businesses. When your business has a regular stream of clients, it means money is coming into the business and you’re doing things right.
But you can’t just use clients as vending machines for cash. With more options than ever before, clients have the power to demand a service that suits their wants and needs. If they don’t get it, they’ll go elsewhere.
The onus is on businesses to impress clients enough to attract and keep their patronage. It comes down to how you build and maintain client relationships.
Take the time to establish a good business relationship with clients from the very beginning – it helps to prevent issues down the track. By going above and beyond to do everything you can for them, you invite your clients to reciprocate.
Defining client relationship management
Client relationship management is a business’ strategy for its interactions with clients.
When it’s done well, it leads to loyal, satisfied customers that generate ongoing business and a positive reputation. When it’s not done well, it leads to poor client experiences and bad word of mouth that can cripple any business.
The importance of building good relationships with customers is hard to understate. Many businesses leave it to chance, relying on positive one-off interactions and spur of the moment offers. This is a risky approach that lacks direction and thought.
The best way to manage client relationships is with deliberate systems and processes. These can define how you communicate with customers, how often you communicate with them, and specific strategies that nurture relationships and build customer loyalty.
This article is your guide to understanding why client relationships are important, and how you can build and maintain them to benefit your business.
Why are strong client relationships important?
Growing strong customer relationships can be extremely lucrative for businesses. A client who has a good relationship with a business will return to buy from them again and again, which represents a long term return.
That return increases exponentially if that customer recommends the business to other people they know. Referrals are among the cheapest ways to find new customers, who, in turn, can also become loyal brand ambassadors among their respective networks.
As above, the alternative to this situation is having poor customer relationships. This means it’s more expensive to acquire customers, and the bad word of mouth that circulates about your business will make it even harder to find clients.
Relationships metrics: Return on Investment (ROI) vs Return on Relationship (ROR)
In terms of client relationship management, Return on Investment refers to the net amount of money a business makes (or loses) from acquiring a customer. It’s the amount of money a customer spends, less marketing and other costs that it took to attract them.
This is a useful metric to know, but the Return on Relationship may be more significant. If refers to the lifetime value of building a client relationship. It includes more than just their purchases, but the value of their referrals and other customers they help you to attract.
As discussed above, client relationships flow through to referrals and other business. While harder to calculate, ROR acknowledges that considerable benefit.
Also, if you have negative customer relationships, that comes through even more clearly when you consider how a customer may have discouraged others from patronising your business.
According to the White House Office of Consumer Affairs, dissatisfied customers will tell between 9-15 people about their experience, on average. A dissatisfied customer will tell 4-6 people about their experience. You’re much more likely to damage your brand with poor service than you are to pick up referral clients.
These are influential metrics when it comes to business success, which makes integrating customer relationship management and revenue an important analytical activity.
Checklist for building and maintaining good client relationships
There are many ways to build and maintain good client relationships. You can use specific techniques and approaches, but often they come down to the principles behind them.
With that in mind, the following principles should guide your interactions with clients at all times.
As with any relationship, communication is key. Having an open channel of communication enables customers to get in touch if they need anything. It also helps you to let them know what you can offer them.
It helps to establish lines of communication early in your relationship. Using a dedicated customer relationship management (CRM) tool can help, particularly if you have multiple customers. Be available to speak to your clients, and communicate in such a way so they feel valued and listened to.
The form of communication is also important. Different types of customers prefer to communicate in different ways. They may prefer speaking to you in person, via email or on social media. Understanding what type of person your client is and how they act will help to inform how you communicate with them.
Being positive in your interactions with customers helps to make every experience with you a good one. Work hard to always be their problem solver – they will love you for it.
On a more personal level, it’s also much more pleasant to deal with someone who’s positive. On the other hand, a business with a negative approach to things will simply make customers want to go elsewhere next time.
From your client’s perspective, the reason they engage with you is to get you to help them. Sharing knowledge not only helps them gain perspective on their needs and how you’ve helped them, but it shows all the other ways you can help them too.
At the same time, the more you share your knowledge, the more they’ll see you as an expert in your field. It’s about growing your authority, and offering tips or advice demonstrates all the expertise you have.
Being open-minded means giving fair consideration to a customer’s specific needs. They may need a project done a certain way, or they may have a budget that doesn’t align with your preferred solution.
Customers will be even more grateful if you can tailor your service for their needs, especially if it’s an adjustment to your normal approach.
As with sharing knowledge, providing expertise is about enlightening your client into how you can help them. It may also mean taking the time to explain what you’ve done for them, or how you’ve done it.
If you’ve helped your client with a problem, you can explain how they might be able to avoid that problem in the future.
Make customers aware of the value you provide. This can be something as simple as specifically itemising discounts on fees to make this goodwill stand out and be forefront in your customers mind.
Exceeding expectations is about taking every opportunity to help your client. Finish their project early or under budget, or do it to a higher standard than they need. Fix problems they didn’t know they had – just be sure to communicate with them if it’s going to cost extra or take longer.
With this in mind, it may help to give customers a slightly inflated sense of expectation at the start. Telling them it may take slightly longer, or cost slightly more, not only gives you flexibility if things go wrong, but it gives you more chance to exceed those expectations.
Start cultivating strong relationships with your clients today
Businesses walk a fine line with their clients every single day. Every client that comes into your business has the ability to be anything from a loyal ambassador to a stubborn detractor.
With this in mind, growing customer relationships should always be on your mind. Even if you’ve built a strong relationship with a client over many years, one bad experience can be enough to turn them away from you permanently. Relationships are hard won and easily lost, and this is especially true in business.
As mentioned at the very beginning, it helps to put thought into exactly how you’ll grow good client relationships. Start by thinking about who they are, what they want, and how you’ll help them.
In particular, how will your help be better than what they get from your competitors?
Being deliberate and strategic about the way you cultivate those relationships will give you a much greater chance of success, and enjoying the benefits that come from it.
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