Six ways for building customer value to enhance the relationship

Last Updated: January 3, 2012By

Beyond short-term outcomes, beyond even immediate results, successful long-term relationships are key to determining operational as well as financial success for your business. Below are my six indicators which can/should be used to understand the customer relationships and how to add value:

  1. Satisfaction.  Do tangible and intangible benefits outweigh the costs?  Satisfaction gauges how positively the customer feels toward the other due to the underpinning of positive expectations. Quality is an element of satisfaction.
  2. Trust.  Do customers have faith in your business?  Honesty, reliability, and competence are the components that involve building trust.  If your business is fair, if it will deliver on the promises, and if it has the ability to promise what is deliverable, customers will reward it with loyalty and confidence.  Trust measures the level of confidence – and later a willingness to be vulnerable and honest with them.
  3. Control Mutuality.  Who has the control in a relationship?  In ideal, stable business–customer relationships, both are aware that power exists and that power is open to discussion within the context of the relationship. This measures the degree to which your business and customers have agreed upon levels of influence over each other.
  4. Commitment.  Is it really worth it?  Loyalty measures the degree to which the customer feels that the relationship is worth the energy that it takes to preserve, support, and endorse.
  5. Mind-set.  How does the customer judge the relationship?  This is a fundamental subjective pointer, Mind-set measures how positively or negatively a customer feels about the your business and about the relationship itself.
  6. Recommendations and Word-of-mouth.  Who is telling whom what?  Word-of-mouth marketing is perhaps the most oldest and the powerful influence in business today.  In some cases, people rely on word-of-mouth more than common sense, independent research, and analysis.  Recommendations will measures word-of-mouth (what customers are saying and recommending) and it measures action (Are you going to remain a customer for your business for the next five years?).
Chintan Bharwada

Chintan is the Founder and Editor of Loyalty & Customers.

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To achieve better sales and profits, most companies could be doing more to cultivate business from their existing customers. However, enthusiasm for customer-retaining strategies must not endanger sound customer-getting efforts. How companies balance the two is the big question. To intensify reaching old customers while still seeking new ones, for many firms, will mean changes in market analysis, planning systems, management incentives, and marketing and/or operations organization. In the rush toward growth, consumer marketers have tended to regard success as stemming from obtaining new customers while unwittingly minimizing the importance of satisfying old ones. It is time for more companies to distinguish between their getting and retaining functions, to assess the balance between them, and to remedy any deficiencies in customer retention. This process requires management to value the potential of current customers and to treat them in special ways to get them to keep coming back. Several major elements should be part of the new marketing mix for customer retention: Product extras Keeping customers frequently requires giving them more than the basic product that initially attracted them. Product extras for individual customers over time can play a sales-expansive role. Reinforcing promotions Product promotion works better when aimed at existing customers. If a marketer knows who these customers are, benefits can be obtained by giving them reinforcing communications. Sales force connections The sales force can play a decisive role in the customer-retention function. At a retail or service counter the salesperson is the focal point of the company's strategy and is the firm to the customer. Post-purchase communication A company must anticipate that some customers will encounter either minor or serious problems after purchasing. If the firm is not ready to hear and correct these difficulties, the customer may not repurchase  or may cancel the the relationship. Whether company or customer is at fault, standby post-purchase activities can be instrumental in saving these customers.

2 Comments

  1. Resume Website January 18, 2012 at 5:35 pm

    Customer relationship matters a lot if you have to create a history of success.

  2. HANI AL SHAWI March 31, 2012 at 12:46 am

    ABOVE THE CUSTOMER RELATIONSHIP MANAGEMENT

Comments are closed.

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