The American Management Association states that 65% of a business’ profit comes from repeat customers. What is so great about that, one asks? Well, most importantly repeat customers have a much greater profit return to a company than new customers. This is because it requires much less advertising cost and effort to acquire repeat customers.
Repeat customers demonstrate the quality of business business relationships each time they make a purchase or refer a business to another person. The more purchases or referrals the better the relationship is considered to be. It is easy to see why the ability to build good customer relationships is something successful businesses have in common. To begin building a good customer relationship a business and their customer must first see a mutual beneficial in working together. It is important to note here that the two most important factors in developing good customer relationships are communication and loyalty.
Communication is defined as any contact made with a customer. This includes visual appearances, voice conversations, email, advertising, third party referrals, and business correspondence such as invoices and receipts for example. Measuring customer satisfaction is a relatively straightforward process because customers can easily quantify their feelings into understandable categories such as “good”, “excellent” or “dissatisfied”. However, building customer loyalty is considerably more complicated because the foundation of a customer relationship is built on mutual trust and respect.
Trust is not easily defined or measured but it is easy to give an example. City residents “trust” that the police department will come to their rescue in an emergency. We believe we can trust the police because of their past history. Every day we read about police actions in the newspaper, we see police in actions on television, we hear police stories from friends, or we may witness police behavior first hand. Moreover, police departments actually communicate to us, as their customers, what we behavior should expect from police officers. How many times have we seen the words “to protect and serve” printed on a police vehicle?
Manufacturing businesses have the same with customer relationship building issue as does the police department or any other customer driven business. When trying to build good customer relationships business mangers and employees alike must prepare themselves by learning how to communicate to the customers the value customers bring to their business. A new communication opportunity could happen when a customer contacts a business by phone or through an internet inquiry; or, it could be something as simple when a customer walks into a place of business. Not until this happens does it become possible for a meaningful dialog or communication to take place with the customer where the customer ends up understanding how important they are to the business.
The next challenge becomes communicating the high value the business offers to the customers and even to the customers’ friends. Hopefully the communication to the customer was clearly understood and if the customer sees high value in the business they will make a purchase.
Constantly collecting information about what items creates value for customers and then accurately analyzing the relevant information allows a business to predict customer behavior. Armed with the knowledge of customer preferences and the ability to make necessary business changes to be more in tune with customer needs dramatically improves customer trust and loyalty which builds a stronger customer relationship.
