Ready to grow your business? You may have invested in acquisition strategies, including advertising and direct sales. But solid growth plans are equally dependent on strong customer retention. Why? Client relationship management practices that keep existing customers satisfied and engaged can help drive revenue at a lower cost than the cost of acquiring new ones.
However, the landscape of client relationship management isn’t static, and best practices can evolve in order to address today’s reality of customer interactions. Fueled in part by the global pandemic, and even more so by the spending power of digital-native Gen Z and Millennials, online channels dominate both B2C and B2B sales interactions. Gartner forecasts that 80% of B2B sales interactions will occur in digital channels by 2025. Yet effective client relationship management strategies should strive for balance, with top-notch client interaction skills complementing technology-driven processes.
To help improve customer retention, focus on your customer relationship management strategy, including your business’s methodology for engaging, servicing, and supporting customers. Successful customer relationships rely on a combination of skills and processes to deliver repeatable, consistent interactions that build trust and sustain loyalty – two key drivers of customer retention.
Skills to Build Enduring Client Relationships
What exactly does customer relationship management mean? At its core, it refers to the strategies and processes a business uses to handle its interactions with its customers. For many businesses, this practice is centralized around a single point of contact, such as an employee who owns the account relationship and acts as a hub for all communications related to a customer project. This is an especially common practice among service providers such as architects, landscapers, and creative agencies.
A different method is often followed by businesses selling tangible products (especially via e-commerce): they tend to take a more dispersed approach in which customer relationship activities may not be handled by just one individual. For instance, a customer service team may handle inbound inquiries, while marketing teams spearhead outbound communications. Or, in a smaller business, different employees might wear multiple hats, sharing a mix of responsibilities for various reactive and proactive customer touchpoints.
Whether centralized or dispersed, any business approach can be tweaked to enhance customer interactions and enable staff with customer management expertise. The following universal skills can help organizations fortify their client relationships and even boost long-term revenue.
Feeling heard can be a prerequisite for feeling understood. Productive customer dialogue begins with active listening, a method that goes beyond just hearing words. It’s about demonstrating genuine interest in the speaker and reducing the risk of misunderstandings. Here’s a brief overview of how you can do it:
- Listen attentively, without distractions.
- Refrain from interrupting the speaker (even to agree). Instead, wait until the speaker has finished speaking; this is a powerful way to demonstrate respect.
- Rephrase or ask clarifying questions to demonstrate true comprehension of the customer’s perspective.
Active listening can be a valuable engagement skill in customer support interactions. It can also help businesses tailor product solutions to genuine customer insights, which can boost sales success rates.
Active listening helps fuel understanding, which in turn underpins empathy. An authentic appreciation of customers’ needs and emotions can set the foundation for enduring client relationships that create mutual value. Cultivate empathetic behaviors with mindful practices like these:
- Put yourself in their shoes. Try to imagine yourself in the client’s situation. What would your concerns, needs, and preferences be?
- Show appreciation. Express thanks for their business and the trust they’ve placed in you, and demonstrate your commitment to serving their needs.
- Stay one step ahead. Proactively identifying and addressing potential issues or needs is a potent indicator that you’re thinking of clients all the time, not just when they reach out.
An authentic appreciation of customers’ needs and emotions can set the foundation for enduring client relationships that create mutual value.
Customers purchase from brands they recognize, favor, and trust, yet establishing such trust can be a gradual process. A company shouldn’t assume it has the trust of the customer until that customer makes repeated purchases or refers other buyers.
Trust-based client relationships are built on open and honest communication. If product delays, project challenges, or even mistakes occur (and they likely will at some point), it can be essential to be open and transparent about them. In fact, making mistakes may actually improve trust and customer loyalty – provided the situation is handled appropriately. For one, mistakes create authenticity; no one individual or company is perfect. What's more, a business that transparently admits its mistakes demonstrates a willingness to take responsibility for its actions, especially if it actively works to rectify the situation. Furthermore, customers may be more likely to continue doing business with brands that respond to and resolve complaints, be they related to company errors or other concerns.
The paradox confronting business leaders today is that, despite the propensity to engage via digital channels, customers may often still crave customized interactions and value human contact. Recognizing this, many companies are looking to industries known for their impeccable customer service, such as the hospitality industry. By hiring workers with experience in customer-centric fields, or otherwise taking cues from these industries, companies can better prioritize personalized service across interaction channels. Ultimately, this can help foster solid customer relationships, leading to repeat sales and referrals.
Client Engagement Practices That Nourish Rewarding Relationships
Though we may think immediately of software when we hear the acronym CRM, the concept of customer relationship management also describes the framework of repeatable processes used in customer interactions. One enduring framework is the IDIC model, introduced by Don Peppers and Martha Rogers, authors of Managing Customer Experience and Relationships: A Strategic Framework, and coiners of the term one-to-one marketing. IDIC stands for identify, differentiate, interact, and customize, making it a useful tool for creating a successful client relationship management strategy. Here’s how it works.
- Identify: Maintain a deep knowledge base of customer profiles, including their demographics, preferences, purchase history, and other relevant data.
- Differentiate: Segment customers into distinct groups, based on their needs, behaviors, and value to the company. Segmentation positions your business to tailor interactions to each group’s preferences and motivations, and should also inform a priority account strategy.
- Interact: Match proactive communications, such as welcome emails, offers, and surveys, to each specific customer segment. Ideally, every customer service interaction will be a seamless carryover from the preceding one, even across communications channels.
- Customize: Deliver personalized products, services, and experiences that are based on information gathered from the first three stages to create individualized value for each customer.
By integrating the IDIC model into your customer relationship management strategy, you can not only streamline and optimize interactions but also ensure that each engagement meets the unique needs and preferences of your clients. This approach can cultivate strong, lasting relationships that drive customer loyalty and long-term growth.
Tech That Can Make Client Relationship Management Easier
Naturally, customer relationship management (CRM) software is key. At the very least, this type of software can help make your own IDIC framework actionable. But there are also other options available that offer even more robust functionality.
As your client relationship framework progresses, other technologies may help infuse the human touch into client interactions. These include:
- Social media monitoring: Positive peer-to-peer interactions on social media can be an effective source of referral revenue, while negative ones can damage your company’s reputation. Timely, individualized follow-ups can address both situations, building customer satisfaction and loyalty. Monitoring tools from companies such as Hootsuite, Sprout Social, Mention, and Buffer, send alerts when your company is mentioned to accelerate your ability to respond.
- Chatbots: Though conversational marketing via chatbots may not feel new, advancements are making them smarter. Natural language processing means that customers can use conversational language, rather than feel obliged to hit on the right keywords to surface information. Machine learning can enable answers to be synthesized from multiple data sources. If customer enquiries are not addressed satisfactorily, chatbots can get better at recognizing the shortcomings and route such enquiries to a human agent. Better yet, they can use those faulty interactions to improve future interactions, with improved comprehension and recommendations for new support content.
Coupled with skilled human interactions, tools like these can propel retention, reputation, and referrals – three hallmark “R’s” that compound the value of each customer well beyond the initial purchase or engagement.
The Bottom Line
Even as customer interactions become increasingly dependent on digital communications, customers expect personalized experiences with a human touch. A client relationship management strategy that incorporates skilled human interactions, and is supported by process and tools, will help nurture client trust and loyalty.
A version of this article was originally published on December 12, 2017.
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