CUSTOMER RELATIONSHIP: TYPES, LIFE CYCLE, ACTIVITIES - DUDAS - 2025

The customer relationship is the development of a continuous connection between the company and its customers. They are the ways in which a company communicates and deals with its existing customers. The relationship involves marketing communications, sales support, technical assistance, and customer service.

The relationship is measured by the degree of customer satisfaction throughout the purchasing cycle and following the receipt of products or services. When it comes to increasing profitability, it's tempting to focus on making new sales or pursuing bigger customers. However, serving existing customers, no matter how small, is essential for the business to continue to grow.

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Customers play the most important part in a business. In fact, the customer is the actual boss in a deal and is responsible for the actual profitability of the organization. The customer is the one who uses the products and services, and judges the quality of them.

Understand the customer relationship

Most companies know what their customers buy, when they buy and where. But few really understand why customers buy, and why they decide to start a relationship with companies.

Business leaders need to define more clearly what customer relationships mean. A good understanding of customer relationships helps align the tools that a company uses with the strategy that is being followed.

Defining customer relationships is a necessary step to deliver what customers really want and to drive business results.

Types

Transactional

This means that there is no real relationship between the company and the customer. The company interacts with the customer on a transactional basis. For example, a kiosk at an airport generally doesn't really establish a relationship with its customers.

Long-term

This means that a long-term and even deep relationship is established between the company and the customer. The company interacts with the customer on a recurring basis.

Personal assistant

This relationship is entirely based on interaction between people. The customer has the ability to contact a sales agent for assistance during the sales process or after completing the purchase.

This can happen in person, by email, through a call center, or by other available means.

Dedicated personal assistant

In this type of relationship, a sales representative is dedicated specifically to an individual customer. It is the closest type of relationship and usually develops over a long period of time.

For example, in private banking services, there are bankers dedicated to serving people with high net worth.

Similar relationships can be found in other businesses, in the form of key account managers, who maintain personal relationships with important clients.

Self service

In this type of relationship there is no direct relationship between the company and the clients. Rather, all the necessary means are provided for clients to help themselves.

Automated services

This relationship takes a more refined form of self-service, combining it with automated processes. Through personal online profiles, for example, customers are given access to personalized services.

Automated services can recognize individual customers and their characteristics, and offer information regarding orders or transactions.

Communities

Companies use user communities to engage more with potential customers and to facilitate links between members of that community.

Many companies maintain online communities to allow users to exchange knowledge and solve other members' problems. Communities can also help companies better understand customers.

Life cycle in the customer relationship

The relationship with customers can change from time to time as it evolves in various situations. Below are the stages from which customer relationships can evolve.

Exploration

Exploration is the process in which the customer investigates or tests the supplier's capabilities and performance, or cross-checks the usefulness of the product or brand.

If the test results fail to meet the client's needs, the relationship can drastically end.

Awareness

Awareness is the process when the customer understands the motivating values ​​of the supplier or the products it sells.

Expansion

Expansion is the process when the supplier earns the customer's trust, and the customer falls under immense interdependence with the supplier. This is the time when there are more business opportunities with that particular client and expanding the business.

Commitment

Engagement is a powerful stage when vendors learn to adapt to business rules and their goal is to excel.

Dissolution

Dissolution is a stage when the client's requirement changes suddenly and you look for better prospects. This sudden change is the end of the relationship.

The relationship can come to an end due to many reasons, such as the customer being dissatisfied with the provider's services or the customer forking off to other better brands and products.

Suppliers may also prefer to break off relationships because the customer is not involved in increasing sales volume or when suppliers become entangled in fraud.

How to improve the relationship with the customer?

The secret to repeat business is to follow up, in order to have a positive effect on the customer.

The follow-up begins immediately after a sale, when the customer is called to thank him, and it is verified if he is satisfied with the product or service.

Let customers know what you do for them

This can be in the form of an email newsletter that is sent to existing customers, or it can be more informal, such as a phone call.

Whichever method is used, the key is to expressly indicate to customers what quality service is being provided.

Make a phone call to let them know they don't have to worry, because the paperwork has already been handled, the attorney called, or you made sure to verify the shipment, one less thing they don't have to do.

Write personal notes

If you run into a former customer at an event, follow up with a note: “It was wonderful to see you at the CDC Christmas party. I'll call you early in the new year to schedule lunch.

Maintain a personal relationship

Voicemail and email make communication easy, but personal contact is lost. You don't just have to rely on these tools for tracking.

If you have communication problems, leave a voice message stating that you want to speak directly to the person or that you will come to their office at a designated time.

Remember special occasions

Send already established clients birthday cards, anniversary cards, etc. Gifts are also an excellent follow-up tool.

You don't have to spend a fortune to show your interest. Get creative to come up with cool gift ideas that tie into the company, the customer's business, or their most recent purchase.

Pass information

If you read an article or see a new book, which a customer might be interested in, send a note or make a quick call to let them know.

Administrative activities in the relationship with the client

Customer Relationship Management (CRM) is a strategy for managing a company's relationships and interactions with regular and potential customers.

A CRM system helps companies stay connected with customers, streamline processes, and improve profitability. CRM must be updated and account managers must be aware of changes to customers.

Understand customer concerns

Conduct customer satisfaction surveys and evaluations. By asking questions, listening carefully, and showing empathy, you try to get to the heart of what customers really want.

Answer specific questions over the phone, by email or in person. Attend meetings with clients to build relationships with existing accounts.

Communicate within the company

Staying in contact with internal departments in order to guarantee that customer needs are really met.

Act as a link between customer service and other departments, especially sales. Bringing specific customer complaints to the attention of someone who can resolve the situation.

Alert the sales team to future sales opportunities within key customers. Also convey general comments that are heard from customers to help build a better product or develop a new service.

Investigate problems

Escalate and resolve existing areas of concern, as raised by customers. Sometimes there is no easy answer to a situation with a client.

When such situations arise, you are tasked with figuring out what went wrong, how the problems could be fixed and how to prevent them from happening again.

Public relations

Create connections on behalf of the company. Notify customers regarding other products the company offers. Build and maintain relationships with clients and key personnel within client companies.

Existing customers can be called in to ensure their satisfaction, network within the community to identify potential customers, and contribute to the organization's marketing campaigns.

References

1. Business Dictionary (2018). Customer Relationship. Taken from: businessdictionary.com.
2. Entrepreneur (2018). Customer Relationships. Taken from: entrepreneur.com.
3. Prachi Juneja (2018). What is Customer Relationship? Management Study Guide. Taken from: managementstudyguide.com.
4. Prachi Juneja (2018). Different Types of Customers. Management Study Guide. Taken from: managementstudyguide.com.
5. Strategyzer Support (2018). How do I use the Customer Relationships building block of the Business Model Canvas? Taken from: strategyzer.uservoice.com.
6. Job Hero (2018). Customer Relationship Officer Job Description. Taken from: jobhero.com.