Guide: Developing a Customer Relationship (And Importance)

By Indeed Editorial Team

Published June 10, 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.

Cultivating productive and long-term relationships with customers is an effective way to make profit and foster brand loyalty. Customers are more likely to return to service providers and manufacturers that they trust and have developed relationships with over long periods. Understanding how to foster these relationships with customers can help improve sales and create a better brand image. In this article, we explain what a customer relationship is, outline the importance of establishing one, and share some essential steps to developing enduring relationships with customers.

What is a customer relationship?

A customer relationship involves the various processes and approaches you adopt when interacting with customers to establish lasting connections. These processes include customer policies, referrals systems, and how you incorporate software automation. You can improve your relations with customers through long-term and short-term solutions that address customer experience. While the customer service department is vital in fostering this relationship, it's helpful to collaborate with other departments. This can help address customer success, product development, and customer support.

It's common for people to refer to customer service and relationships interchangeably. While both terms are similar, the major distinction is how the relationship you build with customers is more proactive. Customer service aims to resolve customers' concerns, complaints, and issues, while your relationship with customers is more personalized. This relationship fosters a connection with customers regardless of existing issues. This makes relationships with customers an ongoing attempt to improve customer experience and prioritize their needs through services and products.

Importance of building customer relationships

Fostering relationships with customers can present teams with various benefits, including:

Customer loyalty

Cultivating a strong relationship with customers ensures a sense of loyalty that makes them difficult to access for competitors. This can make them more likely to purchase new products and services. The relationship you develop with customers also assures them of the quality of your services. With considerable loyalty, you can rely on your customers to bring in consistent revenue over a long period. This dependability also makes your marketing strategies more effective because you can focus on existing customers while also converting new ones.

Customer retention

By improving your relationship with customers through pleasant and memorable experiences, you can improve retention rates. With higher retention rates, you have more customers returning to purchase products or subscribe to your services. Higher retention rates also help you develop better products, as you can depend on the feedback of existing customers. Improving customer experience and relationships also improves overall profitability.

Customer satisfaction

A sure way to determine if customers have good experiences with your products and services is their willingness to return for future purchases. For instance, customers are more likely to abandon a brand they didn't enjoy their services instead of leaving them feedback or complaining about those services. This can make it tricky to measure customer satisfaction or determine the component of your services that require improvements. This is where your commitment to developing a relationship with customers can be of benefit.

Maintaining open lines of communication can help you measure and implement customer feedback. This helps you establish a more personal connection with customers, as you can identify the factors that influence their purchasing decisions. With these factors in mind, you can improve the effectiveness of your marketing strategies and advertisements. You can convert loyal customers with successful strategies by focusing on their overall satisfaction and experience. Addressing your relationship with customers also helps you reduce customer churning.

Related: How to Get Customer Feedback to Improve Your Business

7 steps for developing strong relationships with your customers

Consider taking these steps to develop or improve the relationship you have with customers:

1. Prioritize your customers

Customers are more likely to feel valued and engage in a long-term relationship with products and services when you put them first. You can adopt a customer-centric approach within your department and teams to achieve this. This culture helps team members recognize the collective goal of improving customer satisfaction and focuses all available resources to achieve this goal. For instance, an approach that can help with prioritizing customers is developing a customer journey map. This map helps you highlight and optimize the steps involved in converting a loyal customer.

You can include measures that detail all the factors to consider, from the buyer's first interaction with the brand to purchase and other post-purchase interactions. This can help you highlight clear aspects of improving the customer's experience. Outlining aspects of the customer experience also helps in prioritizing their needs, as you can delegate different aspects of their experience. Delegation can improve productivity because team members know their specific contributions to the overall customer experience. Other approaches you can adopt in prioritizing your customer includes collecting feedback, encouraging physical interactions, and anticipating their needs.

Related: Tips on How to Provide Good Customer Service (With Benefits)

2. Improve customer choices and self-service

While giving every customer the best experience is vital, providing the option for self-service can help them lead their own experience. A limited number of sales representatives, resources, and customer care staff can affect the live customer experience. These limitations make it important to provide customers with choices for self-service. With these choices, customers can determine what digital tools they want to use to answer their questions and resolve their concerns. These tools improve your customer response process by providing multiple choices, like chatbots or FAQ pages, to resolve issues before customers interact with live personnel.

Related: Relationship and Effect of Customer Service in Sales

3. Observe and measure customer satisfaction

Observing the progress of customer satisfaction is an essential part of fostering a relationship. You can observe variations in customer satisfaction through feedback systems, customer satisfaction systems, and net promoter scores. The information you derive from these observations can guide product development and process optimization. Where you find that customer satisfaction decreases regarding a specific product, you can aggregate the common questions and involve customers in the improvement process. It's important to continue this observation to ensure your improvements are effective and the level of customer satisfaction remains steady or improves.

Read more: What Is Customer Satisfaction and Why Is It Important?

4. Improve employee training and educate customers

How team members interact with customers is an integral part of improving your relationship with them. This interaction makes it important for team members to understand their role in improving customer experience and remain motivated to improve the experience. You can improve the interaction of team members with customers by establishing on-job training and skill evaluations. These measures allow team members to develop their customer relation skills and become aware of industry best practices to improve customer experiences. You can also provide educational content like videos or blog posts to familiarize customers with products and services.

While most training and evaluation modules focus on hard skills and team members' fitness for their roles, it's also important to address soft skills. Soft skills are usually more appliable when interacting with customers, and are essential to consider when fostering relationships with them. These skills include effective communication, active listening, empathy, creative thinking, and problem-solving. Regular training can also help you incorporate new brand strategies into everyday practices. This improves the relationship customers have with the brand as they can sense how the brand incorporates their needs.

Related: Customer Service Skills: Definition and Examples

5. Encourage customer appreciation

Showing appreciation for customers is an effective way of cultivating a relationship with them as it helps them feel valued. Customers can also develop a more personal association with a brand they feel appreciates them. You can extend appreciation to your customers through reward programs, discounts, or personalized messages on important dates.

6. Optimize first call resolution

One of the important metrics for measuring customer satisfaction and experience is the first-call resolution (FCR) rate. This metric accounts for the percentage of customer concerns or questions you resolve by their first call. Higher FCR rates represent higher customer satisfaction as they prevent follow-ups or additional steps for the same problem. You can optimize this metric by streamlining processes, equipping team members, offering self-service, and automating relevant processes.

7. Automate processes with software and digital solutions

Technology plays a significant role in optimizing many aspects of modern businesses. One of the many benefits of digital solutions is how they can help you streamline, optimize, and improve your relationship with customers. You can use these tools to automate processes, making your responses prompt and personalized. These solutions can contribute to a seamless customer experience which improves their satisfaction. Processes or aspects of customer experience you can automate include e-mails, calls, help desks, and support services. You can also use customer relationship management (CRM) software to improve your understanding of customers' demographics, pain points, and purchase behaviour.

Related: 6 Tips for Managing Customer Relationships (With Benefits)

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