5 Ways to Build Customer Relationships for Your Small Business
6 min. Read
Last Updated: 12/31/2020
Table of Contents
Customers are the lifeblood of your business. As such, building positive customer relationships should be a top priority for every business, regardless of size. But as a small business owner, your ability to forge strong customer relationships is even more critical.
Fortunately, there are 5 simple techniques to help you stand out to your customers and set you apart in a crowded marketplace.
What is a Customer Relationship & Why Is it Important for Small Businesses?
A customer relationship describes how customers feel about, interact with, and respond to a particular business. When a company has good relationships with its customers, it can expect repeat business and frequent referrals to other new customers. Not only can this set the groundwork for future success, but it may also offer a potential competitive advantage if you can succeed in implementing strategies that result in long-term trust among your customer base.
Fostering good customer relationships is especially important for small businesses with limited marketing budgets. By focusing on building healthy customer relationships, your company can remain sustainable by keeping a steady flow of new customers through your business pipeline.
Customer relations vs. customer service
While many businesses use the terms customer relations and customer service interchangeably, there is a significant difference. Companies focused on customer relations are proactive and work to care for customers at all points in the relationship, not just during an initial transaction.
In contrast, customer service is reactionary - businesses provide customer service in response to a specific customer need. While offering good customer service is a necessary part of building strong, positive customer relationships, it takes a more holistic approach throughout the entire customer journey to develop good customer relations.
The Benefits of Strong Customer Relations
Building strong customer relationships is mutually beneficial for both the customer and the business. The customer has a reliable option to recommend to friends and family and can expect consistently positive experiences. This leads to several important benefits for the business, its employees, and its owner.
When customers can consistently expect quality products and services, they will remain loyal to a brand and support the brand often. Customers appreciate consistency in the buying process and will frequently do business within the same small circles. From buying health care products made by the same manufacturer to regularly eating at the same restaurants, customers will stay loyal to businesses that build strong customer relationships.
When customers are happy with a business, they will frequently share the experience with others. Shoppers are more likely to do business with a brand that has been recommended by a trusted friend or family member, and shoppers regularly ask others in their inner circle for recommendations before making a major purchase. By fostering strong relationships, businesses are more likely to win new customers through personal recommendations.
Lifetime Customer Value
It makes logical sense that happier customers will spend more with a business than unhappy ones, but studies performed by Harvard Business Review show the results are staggering. Customers with the best positive experiences spend 140% more than those with poor experiences.
Surprisingly, working to cultivate good customer relationships can actually decrease your operating costs. Unhappy customers issue complaints, submit support tickets, return products, and file warranty claims. Each of these additional support requests leads to extra work and operating costs for your team. By focusing on keeping your customers happy from the beginning, you can actually reduce the costs required to take care of them.
5 Ways Your Business Can Build Customer Relationships
1. Listen to What Your Customers Tell You
Large companies sometimes fall short in the area of customer communications. This often happens because the infrastructure simply gets too big to adequately listen to and respond to customer feedback. Because of its smaller size, a small business is better positioned to follow this key concept.
Customers will willingly tell you what they appreciate and need from your business. Cultivate a variety of avenues by which customers can share their experiences with you, such as:
- online comments
If customers have something good to say, great! If customers have negative feedback, it's equally important to absorb critical or negative responses.
By demonstrating that you're listening and then acting on a customer's complaint, you can build a professional relationship based on trust and reliability. That can take you a long way toward cementing a relationship that leads to repeat sales.
2. Empower Your Employees
Your employees are often on the front lines in building the relationship with your customers. Empower them to make on-the-spot decisions that repair or improve the customer relationship. If your customer has to wait for a resolution to an issue, this can cause frustration and even permanent damage to your relationship with your customer. But when your employees are empowered to resolve the situation immediately, this minimizes any negative concerns from your customers and even builds confidence that you will stand behind your business promises.
3. Maintain a Human Element
Adding a human element in how you manage your operations can help customers see you and your business as relatable and friendly. It's hard to build a relationship with a machine, so businesses that are simply "transactional" will have a harder time building strong relationships with customers.
You can add a human element by using any of the following tactics:
- Have a trusted employee manage your social media accounts. By injecting humor and personality into your social interactions, you will stay memorable in the minds of your customers and encourage repeated engagement.
- Provide in-person customer service. Customers generally dread calling a 1-800 customer service line. Putting a barrier between your business and your customers feels very impersonal, especially when customers have questions or need additional support. Give them the opportunity to handle issues face-to-face, and be sure to use a smile to your advantage.
- Go above and beyond for existing customers. When customers do business with you, they often expect the transaction to end at the time of purchase. Exceed their expectations by making a follow-up call, sending a handwritten thank you note, or otherwise demonstrating that you appreciate their business.
4. Invest in CRM Software
As your business grows, it will be unreasonable and impractical to keep up with all your customers using a pencil-and-paper tracking system. Customer Relationship Management (CRM) software can keep tabs on your customers with tagging and sorting features that allow you to quickly identify customers in certain groups, such as "all customers who haven't had service within the past six months" or "customers with a birthday in June". By keeping detailed information about your customers at your fingertips, you can incorporate this information in your conversations and be sure you are providing the best service for the customer's unique situation.
When looking for a CRM software, be sure to look for a program that includes:
- Multi-layer support features - Some customers will prefer chat, while others will prefer phone or email. Be sure your CRM integrates with all communication channels so your employees can use it easily for every customer interaction.
- Task automation - One of the biggest benefits of a CRM program is the ability to automate some of your customer follow-up. Comprehensive CRM systems can automate emails, phone calls, and even reporting features.
- Flexible pricing plans - CRM is not a one-size-fits-all program, so choose a platform that offers flexible pricing plans that meet your needs. Platform pricing that scales with your business can help position you for growth while also helping to keep costs down without paying for more storage space or features than you need.
5. Boost Your Social Media Presence
Small business owners can often feel overwhelmed with day-to-day operations and may feel like they don't have time to spend on building social media. But customers expect to interact with businesses through social platforms, so businesses that ignore this key communication channel are hurting their ability to build strong customer relationships.
Seek Out Opportunities to Share Content That Benefits Your Target Audience
Good social content should benefit your customers, not your business. Follow the 80/20 rule when posting content: 80% of your posts should be relevant, helpful, and entertaining to your target audience, while 20% should be self-promotion.
While every industry and target audience will have different needs, consider posting content such as:
- Tip posts on helpful ways to use or interact with your product or service
- Relevant and timely industry news
- Videos that answer commonly asked questions
- Polls to gather customer feedback for useful products or features in development
Respond to Customer Feedback on Social Media
Nothing damages a relationship quite like the feeling of being ignored. If your customers are willingly interacting with your business on social media, it's important to show them you care by responding quickly. Since social posts are public, you may also win over some new customers who see your helpful and prompt responses.
Building Customer Relationships is the Small Business Advantage
Large companies certainly have advantages in terms of technology, staffing, marketing, and so on. But when you build trust among your customers, such "advantages" become secondary, and there's every reason to expect your small business will keep growing well into the future. Following these tips will help you build successful customer relationships that are long lasting.