Customer relations

What is customer relations? An in-depth guide

Good customer relations is the foundation of lasting success in modern business. In a highly competitive environment, it can give your company the edge it needs to stand out from the rest.

But all too often, achieving this in practice can be more complicated than it seems.

In this guide, we’ll take an in-depth look at the benefits of positive customer relations and share a few tips on how to build excellent customer relationships that last.

What is customer relations?

Customer relations is all about how businesses build rapport with customers and develop positive customer relationships over time. The art of customer relations management is multifaceted, encompassing everything from delivering a great product to fine-tuning communication and support interactions.

When you manage to achieve this, it leads to all kinds of positive outcomes that benefit your business including high revenue, word of mouth referrals, and lower churn.

Customer relations vs. customer service: What’s the difference?

It’s worth taking a moment to establish the key distinction between customer service and customer relations as concepts.

In essence, customer service has a narrower focus than customer relations. Good customer service primarily involves mastering the sharp end of dealing with customers in the here and now. That means things like resolving customer enquiries and complaints as quickly and effectively as possible.

On the other hand, customer relations is more about building thriving, long-term customer relationships. It’s more proactive and has a much broader scope. Simply put, good customer service is just one aspect of good customer relations.

The importance of customer relations: Benefits that positive customer relations can bring

Managing customer relationships well is a big-picture exercise that can have a profound impact on your company’s success. Here are just a few of the advantages of having a strategic customer relations policy.

Higher customer satisfaction

The importance of customer satisfaction as a metric can’t be overstated. After all, without happy customers, you don’t have a business. Bad customer relations lead directly to poor customer satisfaction, and your customers will simply go elsewhere. And the opposite is true—according to Salesforce’s research, if a company’s customer service is excellent, 78% of consumers will do business with them again, even after a mistake.

If you aren’t doing so already, it’s crucial to start tracking customer satisfaction to make sure you’re getting everything right. If your business is growing fast, this can be quite a challenge.

Using Ai and automation tools like Dialpad Ai CSAT can help simplify the process. Ai CSAT analyzes customer conversations in real time and can predict CSAT scores automatically—which gives you a much more accurate sense of customer satisfaction compared to traditional CSAT surveys that rely on customers actually filling them out.

Improved customer retention

Satisfied customers are much more likely to return again and again to do more business with your company.

While attracting new customers is, of course, a critical part of business operations, retaining the ones you have is less expensive—and essential for long-lasting success.

It also rewards you with a double benefit because loyal customers may become valuable brand advocates. That can help you land even more business through the priceless yet often elusive power of word-of-mouth recommendations.

Increased customer lifetime value

Another vital point about retaining loyal customers is that it contributes directly to your bottom line by increasing average customer lifetime value. This is a crucial metric to consider when it comes to generating profit over the long term.

It’s certainly possible to do business with a focus on one-off transactions. However, it’s better to develop positive customer relations so your customers come back the next time they’re in the market for what your company offers.

This is particularly important if your business operates in a highly competitive field where product differentiation is difficult. In this case, developing good customer relations can make all the difference.

Positive brand reputation

According to the Institute of Customer Service, customer satisfaction scores dropped in 2023 in every single one of the 13 sectors measured by their annual CSAT index survey, the UKCSI.

In fact, out of 281 organisations whose customers were polled, only 15 managed to improve their average score by just two points year-on-year.

This is a pretty startling statistic. It shows that many UK companies aren’t managing customer relationships quite as well as they should be. This presents a huge opportunity.

It means that if you can get it right and maintain excellent customer relations, your business will stand out from the competition—without making any changes to your product or marketing.

More cross-selling opportunities

One of the advantages of building relationships with customers is that the value provided goes both ways. The more enthusiastic your customers are about your business, the more likely they are to be receptive to additional offers.

Let’s face it, we’re all very busy, and so are your customers. They probably receive multiple approaches from companies trying to attract their interest every day.

Having good customer relations makes it more likely that they’ll give you their time and attention (for instance, when you ask them if they’re interested in a new service or a premium upgrade).

Virtuous engagement and feedback cycle

Customer engagement plays a critical role in successful relationship building, and a perhaps underappreciated aspect of this is the feedback that you receive from more engaged customers.

One way to make gathering this feedback easier is by using a customer engagement platform—some have Ai features that automatically analyze conversations and uncover insights (such as Dialpad’s Ai CSAT and conversation intelligence features mentioned earlier).

The longer your customers stick with your business and the more engaged they are, the easier it is to get them to give you useful feedback. This is a big advantage as it isn’t always easy to collect customer insights.

Top tips for better customer relationship building

Whether you’re establishing customer relationship policies for the first time or updating training for your agents, there are some helpful basic principles to keep in mind.

Focus on relationship building when onboarding and training employees

Your agents are the public face of your business. When customers reach out to your contact centre, for instance, your support staff are the primary touchpoints for those interactions.

When you’re considering how to improve customer relations, it makes sense to begin with your employees. Your onboarding process and training modules should place a heavy emphasis on how to build good relationships with customers.

This means that as well as covering the details of your product or service offering, you should integrate guidance on and training to nurture customer-focused skills, such as:

• Active listening

• Different communication techniques

• Problem solving

• Empathy

Meet customers where they are

It may be easier for your business, process-wise, to funnel all customer queries through a chatbot, but that’s unlikely to be the preferred choice of every single one of your customers.

Make sure you provide a range of contact options so you can meet your customers where they already are.

While some customers may prefer to engage with self-service options like chatbots, others will want to talk to a human being on the phone, while still others may prefer to access support via email or social media. This doesn’t necessarily mean you have to be on every single channel out there, but you should prioritise the ones where you get the most inquiries on, and also where your most VIP customers are trying to reach out, for example.

Choosing the right channels can be a challenge and will likely require a few iterations, but it’s a vital component for delivering good customer service, making it a worthwhile investment.

Treat every customer as an individual

The best customer relationship examples usually involve the personal touch. On a basic level, this could include simple personalisation measures, such as reaching out to offer customers a special birthday discount. But on a deeper level, treating your customers as individuals also means every agent should be equipped to resolve their issues and meet their specific needs.

To achieve that, you first need to establish what those needs are rather than assuming you know already. Using technology like Ai and a call centre CRM can help you uncover what your customers really want and start building a knowledge base for your agents. These kinds of tools give your front-line employees real-time access to customer data without having to constantly toggle back and forth between different applications.

The advantage of this is that it helps your staff tailor their responses to individual customers’ requirements, and they’ll be able to benefit from valuable insights into customer behaviour.

For instance, they’ll see at a glance what kind of loyalty rewards or cross-selling opportunities might be appropriate to offer in-call.

Gather customer feedback and act on it

Having a truly two-way conversation is one of the most important elements of a good customer relations management system.

You can seek out customer feedback in a variety of ways. You can use tried-and-tested methods, like sending emails to collect net promoter scores and running virtual focus groups, but there are more efficient ways to do this with new Ai and conversation intelligence tools.

One crucial point to note is that collecting feedback shouldn’t be done piecemeal. Having a unified strategy is key. This approach is sometimes called having a “Voice of the Customer” programme. It involves taking a holistic view of planning, collecting, and analysing customer feedback so you can implement a cohesive response.

Having this kind of plan of action in place is the best way to ensure your business is continuously collecting feedback in a strategic way. Use this customer feedback to refine your product and service offering, and your customers will know you appreciate their insights.

Show appreciation for (and reward) customer loyalty

You value your loyal customers, so why not show it? There’s no better way to encourage customer loyalty than to reward it directly. Doing this is another opportunity to personalise the customer experience.

There are all kinds of approaches you can take, and exactly how you choose to reward loyalty will depend on both your available resources and your brand personality. Here are a few options to consider:

• Give personalised discount offers

• Launch a loyalty scheme

• Send a handwritten note

• Offer a well-chosen gift to celebrate a milestone

• Host special events for your most loyal customers

Achieve more positive customer relationships with Dialpad

Dialpad’s Ai-powered customer communications platform can provide your contact centre agents and supervisors with all the tools you need to develop valuable customer relationships that will deliver long-term success.

From a truly unified collaboration platform, to real-time customer service insights and workflow automations, Dialpad Support consolidates all internal and external conversations in one convenient place.

Book a demo to see how it works, or take a self-guided interactive tour of Dialpad’s platform now!