A3 Benefits of building customer relationships
• Enhanced reputation of business.
• Repeat business.
• Customer confidence in business.
• Job satisfaction for employees.
How might a business build positive relationships with it's customers?
What are the benefits to the business of having good customer relationships?
Building effective relationships with internal and external customers is crucial to business success. Customers need to be sure that any guarantees against problematic purchases or monetary commitments made against future purchases, such as deposits or vouchers, will be honoured by the business. They also need to feel confident that they will be treated well by the business, whether they are making a complaint or visiting the store.
Some businesses have always enjoyed a positive reputation, such as John Lewis (JLP) and M&S, although not without occasional glitches. Businesses like this ask themselves "What are we doing that is right?" and more importantly "How can be do it better?".
Virgin continue to work hard at satisfying customers and certain segments of their business, such as media and air travel, have developed a reputation for supporting customers well. This reputation means that customers are likely to speak positively of a business, whether this is through word of mouth or via online forums and feedback. Increasingly, customers review online feedback before making a purchase or booking- a good reputation will be reflected in this feedback and is likely to lead to repeat business and new customers.
How do the businesses you use try to get you to keep using them in the future?
Which methods do you feel are most successful?
Which methods are least successful?
The best way to succeed in business is through repeat business. It costs more to generate new business than it does to retain what has already been gained. If customers feel that a business will invest in building a good relationship with them, they are more likely to return to that business. For example, Virgin Atlantic Airways offer Airmiles to frequent flyers, providing an incentive for customers to return. Several retail businesses also build brand loyalty by offering reward schemes, such as Boot's Advantage points and Superdrug's Beautycard. On a smaller scale, the owner of a local corner shop can build personal relationships with local customers to encourage repeat business.
No business is totally infallible, no matter how much they try- but learning from mistakes gives them the opportunity to improve. Businesses that have developed confidence by admitting their errors, include:
Toyota who voluntarily recalled vehicles that had software issues
Asda, M&S, Boots, Sainsbury's who admitted issues with suspect food products containing horsemeat.
Fujitsu who recalled battery packs with a risk of catching fire.
Some businesses offer additional free services to maintain customer confidence in their product, such as Mercedes, who offer annual winter checks, and Toyota, who offer a free service with its voluntary recalls.
By building postiive customer relationships, employees are rewarded with greater job satisfaction. For example, the local newsagent is likely to look forward to visits from local customers with whom they have developed a good relationship. Other examples might include a JLP employee who helps a couple set up their wedding registry or a personal shopper who helps a customer to find their perfect outfit- both of these situations are likely to lead to happy customers and a rewarded employee.
In the voluntary sector many people give up their time for free for worthy causes and they may enjoy the challenge of learning new skills and developing their communication skills.