If you don’t have customers, you don’t have a business.
Take it from the richest man in the world, Amazon founder and CEO Jeff Bezos: “The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.”
Enter customer relations.
Sure, it doesn’t sound as glamorous or exciting as product development or sales. But customer relations is the bedrock of long-term success in business.
Now, that is exciting.
Okay, but what exactly is customer relations? Why is it so important to your business success? And how can you do it well?
In this article, you’ll learn about the awesome power of customer relations, and how to start building better customer relationships today. So buckle up!
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What is Customer Relations?
Custom relations is the process a business uses to proactively develop positive relationships with its customers. This includes activities such as marketing, PR communications, sales, and customer service.
The aim is to ensure that customers are highly engaged and satisfied with the business.
This then leads to positive outcomes such as customer retention, and a higher customer lifetime value (CLV). Success in customer relations is measured by the degree of customer satisfaction throughout the buying cycle.
If we set aside the jargon for a moment, it’s all about building a genuine connection and strong bond with customers.
Larger companies often hire people to specifically manage how the company communicates and interacts with its customers.
Now, let’s get one thing straight:
Customer Relations VS. Customer Service
These two terms are often confused and used interchangeably.
Yes, they are highly related, but there is a key difference between customer relations and customer service.
Customer service is reactive.
It’s the process of effectively delivering what the customer has purchased. For this reason, customer service is usually about dealing with things that go wrong and responding to inquiries.
It’s about making good on your side of the bargain.
This is why Jeff Bezos said, “The best customer service is if the customer doesn’t need to call you, doesn’t need to talk to you. It just works.”
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As Bezos mentioned, customer service usually involves directly responding to individual customers by phone, email, chat, or in person.
On the other hand, customer relations is proactive.
It’s the strategic process of engaging and interacting with customers and prospects to build a genuine connection, goodwill, loyalty – and ultimately, a strong company brand.
Okay, but how does this help you to grow your business?
3 Reasons Customer Relations is so Powerful
Now that you know what customer relations is and how it differs from customer service, why should you prioritize it?
1. Don’t Underestimate the Power of Word of Mouth
People’s opinions about your company matter – a lot.
According to Nielsen, 92% of consumers believe recommendations from friends and family over all forms of advertising.
Then there’s the internet.
In an interview on Forbes, Bezos said, “It used to be that if you made a customer happy, they would tell five friends. Now, with the megaphone of the internet, whether online customer reviews or social media, they can tell 5,000 friends.”
Plus, in today’s world, word travels fast.
Bezos shares, “If there’s one reason we have done better than our peers in the internet space… it is because we have focused like a laser on customer experience, and that really does matter… in any business. It certainly matters online, where word-of-mouth is so very, very powerful.”
Let’s look at an example from United Airlines.
Recently, United’s customer relations hasn’t fared too well. From the much-used Twitter hashtag “#UnitedAirlinesSucks” to the infamous viral videos showing officers forcibly dragging a doctor screaming and bloody from a Louisville-bound flight.
These videos and tweets reveal a widespread dislike of the company.
But it’s not just upset customers and bad press.
These incidents, feelings, and posts can also have a hugely damaging effect on a business’ bottom line. In fact, United Airlines’ market value dropped by $1.4 billion after the passenger-removal incident.
The cost of not caring is high.
However, there’s much to be gained from treating customers with care, attention, and respect.
Online shoe and clothing store Zappos is famed for its incredible customer service. Tweets like this are a regular occurrence:
What’s more, replies from Zappos like this are also are just as regular:
So Zappos is making lots of people happy, but does it also work as a business model?
You bet.
Zappos founder and CEO Tony Hsieh once explained the company’s success by saying, “We’re now at over $2 billion dollars in gross merchandise sales, and the number one driver of all that growth has been repeat customers and word of mouth.”
In summary: Word of mouth is hugely important.
As James Cash Penney, the founder of J.C. Penney, said, “Courteous treatment will make a customer a walking advertisement.”
2. Recognize the Importance of Customer Retention
As Hsieh mentioned, repeat customers can drive huge growth.
In fact, research by Bain & Company found that a 5% increase in customer retention can increase company profits by 25%.
How?
On average, repeat customers spend 67% more than new customers. Plus, acquiring new customers can be anywhere from 5 to 25 times more expensive than retaining current ones.
Crazy, right?
But let’s run through a practical example of how you can use higher customer retention to dominate your niche.
The longer you retain customers, the higher your customer lifetime value.
This is a metric that reveals the average amount of net profit that each customer is predicted to contribute to a business over the entire length of the relationship.
Now, when you earn more money from each customer, you can afford to spend more to acquire new ones.
This is awesome – especially if you use pay-per-click (PPC) advertising on platforms like YouTube, Facebook, Google, and Instagram.
PPC advertising uses a bidding system. This means that advertisers with the highest bid will win the advertising opportunity.
Here comes the cool part…
If you can afford to pay more than your competitors to acquire new customers, you can bid higher than them and buy all of their traffic.
All in all: Good customer relationships directly increase your bottom line.
3. Customer Relations is a Remarkable Differentiator
As you’ve probably gathered, Zappos and Amazon’s success is due in part to their relentless dedication to their customers.
And they’re well-known for it.
This is when customer relations becomes more than communication or service – it becomes a business’s brand identity.
Bezos sums up branding perfectly: “Your brand is what other people say about you when you’re not in the room.”
Amazon’s brand is now so trustworthy that plenty of people have signed up for a new service called Amazon Key. This service allows a delivery person to open your front door to leave packages inside your home.
Anthony Smith, the founder of Insightly, wrote on Forbes, “It’s ironic that consumers trust Amazon to enter their home more than they trust neighbors not to steal packages off their front porch.”
Let’s look at another example from outdoor gear and clothing brand Patagonia.
Patagonia has consistently used customer relations to communicate their commitment to environmental sustainability.
Patagonia embarked on an unlikely Cyber Monday advertising campaign. They took out a full-page ad in The New York Times that read, “Don’t Buy This Jacket.”
The ad explained how excessive consumption is over-extending our natural resources and damaging the environment, saying, “We want to do the opposite of every other business today. We ask you to buy less and to reflect before you spend a dime on this jacket or anything else.”
Unsurprisingly, this message strongly resonated with Patagonia’s target market and helped to differentiate them from their competition.
I mean, how many other businesses care more about their core mission than making sales?
As a result, Patagonia is revered by their customers as authentic, personable, and caring. Plus, they’re now one of the leading environmentally responsible companies on the planet, with revenue topping $209 million a year.
So how can you harness the awesome power of customer relations?
5 Essential Tips to Building Great Customer Relationships
Clarence Francis once said: “You can buy a person’s time; you can buy their physical presence at a given place; you can even buy a measured number of their skilled muscular motions per hour. But you cannot buy enthusiasm… you cannot buy loyalty… you cannot buy the devotion of hearts, minds, or souls. You must earn these.”
How?
1. Put Your Employees First
Sorry, what?
Okay, I know I’ve just been going on about the importance of your customers. But as author Simon Sinek said, “Customers will never love a company until the employees love it first.”
This is obvious when you think about it.
Your employees are the ones who control all communications with your customers.
They are responsible for maintaining your business’ values, providing great service, and making good on the promises you make to customers.
And if they don’t like their jobs, negativity and resentment will propagate.
However, if they love their jobs, they’re far more likely to spread positivity and go the extra mile for customers – like the employees at Zappos regularly do.
As Richard Branson, the billionaire founder of the Virgin Group, said, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
2. Obsess Over Your Customers
After your employees, it’s time to obsess over your customers.
“There are many ways to center a business,” said Jeff Bezos. “You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”
This doesn’t just mean sending them nice messages or a free gift with every purchase.
It means working hard to understand their needs and desires, and then obsessing over how you can meet them.
As Albert Einstein said, “Strive not to be a success, but rather to be of value.”
“The single most important thing is to make people happy,” said Derek Sivers. “If you are making people happy, as a side effect, they will be happy to open up their wallets and pay you.”
3. Don’t Just Communicate – Connect
Communication is the foundation of all relationships.
With the rise of the internet and social media, there are more ways than ever to begin conversations with your customers.
But great communication goes beyond words and makes a genuine connection.
Social media platforms aren’t a place to broadcast your marketing materials and announcements. They’re a place for conversations – and conversations require you to ask questions.
So ask customers to share their opinions and gather feedback.
Mary Kay Ash, the founder of Mary Kay Cosmetics, said, “I have learned to imagine an invisible sign around each person’s neck that says, ‘Make me feel important!’”
Bottom line: Remember that all communication takes place between two humans.
Sure, that email might be sent to a list of thousands of people. But each is read by just one individual person. People want to engage with people, not customer service and marketing robots.
So, ensure that any time customers or prospects come into contact with your business, they leave feeling valued and respected.
As the 17th-century French mathematician, Blaise Pascal said, “Kind words do not cost much. Yet they accomplish much.”
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4. Always Exceed Expectations
It’s nearly Christmas.
You’ve ordered a PlayStation as a present for your son. It was delivered to your doorstep when you were out, but your kindly neighbor signed for it and left it on your front porch.
Then, disaster strikes.
The package mysteriously vanishes. There’s nothing you can do except handover another few hundred bucks and reorder it, right?
This happened to an Amazon customer a few years ago. Can you guess what Amazon did?
They sent him a new PlayStation for free. He didn’t even have to pay for shipping, and they managed to get it to him in time for Christmas!
Now, I’m not suggesting you send all of your customers free PlayStations.
However, I am suggesting that you always exceed expectations. When you do, it makes for more than good stories – it demonstrates your commitment to providing real value to your customers.
So under-promise and over-deliver.
In a 60 Minutes interview, Jeff Bezos said, “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”
So, respond to customer service inquiries as fast as humanly possible. Add a personal touch whenever you can. If your shipping says it takes 7-10 days, ensure parcels arrive within 4-5 days.
Don’t say you’re the best. Strive to be the best. Go above and beyond.
As the analytical psychologist, Carl Jung said, “You are what you do, not what you say you’ll do.”
5. Provide Stellar Customer Service
Sivers said it best: “Customer service is the new marketing.”
Remember, the internet is a giant megaphone that unhappy customers are more than happy to wield like a bloodied medieval sword.
You’ll want to avoid that at all costs.
However, if you do find yourself in hot water, whatever you do, don’t brush customers off, downplay their concerns, or just plain ignore them.
Instead, accept responsibility – and fast.
Thirty-nine percent of social media complainers expect a reply within 60 minutes. That’s why the airline KLM has 150 employees answering complaints solely on social media, 24/7.
Be compassionate.
Invite the customer to share their feedback and show that you’re listening. Listen without judgment, and work with them to figure out how to solve the problem.
Alan Weiss, the author of Million Dollar Consulting, says, “Ask your customers to be part of the solution, and don’t view them as part of the problem.”
Then, go to work addressing their concerns.
This is vital to get right when 92% of customers stop doing business with an organization after three (or fewer) poor customer service experiences.
Plus, negative customer feedback is an incredible opportunity to find out exactly how to improve your product or service. As Bill Gates said, “Your most unhappy customers are your greatest source of learning.”
The more that you understand your customers’ needs and desires, the more you can tailor your business to meet them.
What’s more, don’t just wait for customers to come to you.
Make sure you regularly check online forums, social media, and review sites for any mentions of your business. Then reach out to remedy the situation if you can, or simply apologize and show that you care – caring alone is powerful.
As Gary Vaynerchuk, the author of The Thank You Economy, said, “I attract a crowd, not because I’m an extrovert or I’m over the top or I’m oozing with charisma. It’s because I care.”
Summary: The Power of Customer Relations
Customer relations may seem unimportant compared to things like product development, sales, and marketing.
But businesses will find it extremely hard to grow if they neglect customer relationships.
Remember what Henry Ford said: “It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.”
Customer relations can also feel overwhelming because it encompasses so much of what a business does.
But if you get the core principles right, everything else should fall into place:
- Look after your employees and they’ll look after your customers.
- Genuinely care about your customer’s welfare and opinions.
- Don’t just communicate, connect and bond with customers.
- Work hard to exceed expectations and provide additional value wherever you can.
Is your business customer-focused?