Let’s say that for as long as you can remember, it’s been your dream to start a dog-walking business. You have two dogs of your own and you’ve seen firsthand the demand for high-quality pet-care services. You scraped together the funding and launched your company. Over time, advertising and word of mouth brought in new clients who appreciate your attentiveness to their needs and those of their pets.
These customer relationships are an integral part of any successful business. Positive customer relationships can mean the difference between a thriving, growing company and one that is stagnant and struggling. So what does “customer relations” mean, what are some common misconceptions? How can you use those customer relationships to help your business thrive and prosper?
What is a customer relationship?
Simply put, a customer relationship is the relationship you, as a business (including yourself and your employees), have with your customers. Any customer that purchases goods or services from a business has a relationship with that business. That relationship ranges from customer interactions with the company’s public-facing market (e.g., website or brick-and-mortar location) to the customer’s experience with the goods or services themselves to the long-term connection between the customer and business. The ultimate goal is to develop a long-lasting relationship leading the customer to purchase a company’s goods or services again.
There’s a lot that goes into building customer relationships—it’s developing and fostering connections with customers through communications or other business practices that benefit the consumer. In the words of Henry Ford, “It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.”
Building and improving upon these relationships can lead to better customer retention rates, expansion of the customer base through word of mouth and advertising, and increased customer lifetime value (CLV)—the total amount a customer is expected to spend over the course of their relationship with a business.
Why is having good customer relationships important?
A business is nothing without its customers. As the famous Vince Lombardi quote goes, “It takes months to find a customer and seconds to lose one.” In order to retain existing customers and find new ones, it is vital that an organization treats its clients well and practices diligent customer relationship management. Effective communication and allowing and using feedback can greatly increase the odds that customers will return to your business, fostering customer loyalty. Customer loyalty usually is indicative of high levels of customer satisfaction, which leads directly to positive reviews for a company and increased profitability and growth down the line.
Five ways to build better customer relationships
- Communicate well
- Ask for (and respond to) customer feedback
- Build trust
- Treat them like humans
- Reward loyalty
Building better customer relations might seem like a complicated process, but the following steps can streamline the effort.
- Communicate well. Whether it be consistent, thoughtful newsletters, follow-up phone calls, or even the occasional check-in text message, consistent communication is the best way to reach customers and build lasting connections.
- Ask for (and respond to) customer feedback. Having an open line of communication that allows clients to offer suggestions on improvements or changes is critical to keeping those clients happy. Seeking feedback in the form of a survey or other outreach is another good way to show you care about the customer experience.
- Build trust. Trust is critical to any good working relationship. Customers expect a certain level of quality, timeliness, and consistency. Don’t let them down, and if you do, explain exactly what happened and what changes you are making to ensure it doesn’t happen again.
- Treat them like humans. At the end of the day, customers are human beings and want to be treated with respect and kindness. Never forget that there is a person on the other end of that phone call or email.
- Reward loyalty. Incentives such as discounts for repeat customers or VIP customer rewards programs can go a long way toward securing loyal customers for life. Don’t be afraid to contact customers and let them know you appreciate and value them.
Customer relations vs. customer service: similarities and differences
There is quite a bit of overlap between customer relations and customer service. The two terms are often used interchangeably. However, there are a few differences between customer service and customer relations to keep in mind as you run your business.
What are the similarities?
Both customer relations and customer service are concerned with the relationship between a business and its customers. Both concepts represent efforts to create a better experience for consumers and a strong connection between those consumers and a company. They also both imply a reciprocal relationship, e.g. the business reaching out to the customer and the customer offering feedback.
What are the differences?
Customer service refers to the reactive process of assisting a customer, often when something has gone wrong. This can take the form of an IT ticket, a support desk call from a company’s customer service department, an automated response through customer service software, or even a friendly email exchange from the business owner.
For example, imagine the dog walking business and a customer who says she booked a one-hour-long walk for her two dogs, but they only received a 30-minute walk. As the owner, you are responsible for calling the customer, explaining why the mixup occurred, and telling her what you are going to do to make it right—for example, offering a discount on her next service.
Customer service is often managed by a company’s service and support teams through customer service platforms rather than its marketing and sales teams.
Customer relations, meanwhile, refers to the proactive process of building a positive relationship between the customer and business, as well as improving the overall experience of the customer. For instance, in the example above, customer service refers to dealing with a customer who encounters a problem with a good or service. In contrast, customer relations refers to building connections and a strong framework of communication to ensure that a situation like that doesn’t happen in the first place.
Here’s another way to distinguish between the two: Customer service is typically short term, tackling issues and putting out fires as they arise. This is in contrast to customer relations, which is a long-term approach, building up trust and loyalty for the future growth of a business.
Customer relationships FAQ
What is an example of a customer relationship?
When you go for a haircut, your satisfaction and experience—including booking, interaction with the stylist, and cost—will likely dictate whether you return and whether you recommend the shop to friends and family. The relationship you and other clients have with that salon will determine its success in the short and long term.
Why are customer relationships important?
Businesses cannot exist without demand. Building positive customer relations can generate greater demand, ensure retention of existing customers and aid expansion into new markets. In essence, strong customer relationships are the key to building and maintaining a healthy, stable company, regardless of industry.
What are the different ways to build better customer relationships?
A proactive approach can help improve customer relationships. This includes communicating with clients through email surveys, phone calls, or follow-up texts. It also typically involves developing a positive feedback and improvement cycle by asking about the customer experience and acting predictably and consistently in all aspects, from punctuality to services rendered. Lastly, rewarding loyalty encourages customers to purchase goods and services in the future.