Have you noticed companies upping their game when it comes to building meaningful relationships with you recently?
Maybe you received a discount on your birthday, or an offer popped up for dog food just as you ran out, or customer support teams seem to be genuinely listening and responding to your concerns.
Whatever it looks like, the most successful businesses are putting excellent relationship management at the forefront of their operations.
And it’s no secret why — customer relationship management is proving to be one of the most effective approaches to maximizing repeat revenue and customer loyalty over time.
In this article, we’re going to take you on a masterclass of customer relationship building and management so you and your business can start to enjoy the many rewards it can bring when performed correctly.
We’ll be explaining what CRM is, all the reasons why it’s so effective, how to accurately measure and track customer relations, and the best software for doing it all both efficiently and easily.
What is customer relationship management?
You’ve probably heard the buzz around customer relationship management and the power of a good CRM system by now.
The global CRM software market is forecast to grow to a very healthy $43.5 billion in total value by 2024, thanks to an attractive return on investment and widening applicability in different industries.
But what is it, exactly?
The ‘ideal’ of customer relationship management is to be optimally responsive and nurturing of customer interaction at all touchpoints. This allows customers to develop a sense of trust and loyalty which converts to positive buying behaviors.
To do this effectively, you need to develop an accurate picture of who the customer is, what their preferences are, and what their buying habits look like.
Think about it in terms of your own experience. In cases where companies have been responsive, generous, or proactive about your needs, how did that make you feel as a customer? In all likelihood, it probably increased the chance of a sale, now or in the future.
The second layer of customer relationship management is the positive feedback loop it can create in terms of customer satisfaction.
By constantly collecting detailed feedback and opinions from customers, you arm yourself with data with which to further improve your product or service, digging down into what customers love while sharpening up the things they don’t.
When people discuss customer relationship management, they may be referring to the set of principles relating to how a business interacts with its customers, or the software tools or system used to facilitate these interactions — often simply referred to as CRM.
CRM systems collate data from websites, telephone, email, live chat, marketing materials, and more recently, social media to act as a central hub for executing relationship management strategies.
Why should you build customer relationships?
While the benefit of establishing better relationships with your customers may seem obvious, the truth is that CRM can bring a whole lot more to the table than just increased sales.
Customer relationship management as a set of principles is one thing, and CRM as a software tool is another but combined, they represent an exciting new set of value-creation opportunities at almost every level of your business operations.
So, why build customer relationships? Well, consider the following benefits:
Loyalty and repeat revenue
Treat your customers better, and they come back for more. If it sounds simple, it’s because it is!
The loyalty derived from CRM relates closely to the Pareto principle. This is a seemingly universal rule of distribution that states that 80% of the outcome of a certain activity typically originates from 20% of the cause.
In business, it is often the case that around 80% of revenue is derived from 20% of the most loyal customers.
By nurturing these relationships in a focused, strategic manner, you can boost total revenues in a way that’s disproportionate to the effort and investment put in.
This is because customer acquisition costs significantly more than customer retention. Goodbye expensive marketing budgets, hello loyal customer relationships.
Plus, increasing customer retention rates by 5% can increase profits by 25-95%.
All else being equal, it may only take that one simple bit of genuine business-to-customer recognition or interaction to give someone enough reason to go with company A instead of company B.
This advantage is even more pronounced in B2B contexts, where clients demand an even greater degree of personalization and relationship building.
With a directory of relevant customer data on hand, you can tailor your product or service in a way that presents a strong value proposition to the customer compared to your competitors, who may not be up to speed on an effective CRM strategy.
Better able to meet customer needs
Following on from the last point, keeping a database that includes customer profiles, an entire history of communications, purchase behaviors and habits, as well as reviews and feedback, allows you to continuously hone your product or service to the customer’s enduring satisfaction.
Let’s say you notice a steep drop in repeat purchase behavior from a customer cohort shortly after a product change.
That should tell you that your change negatively affected the perceived value of the product, and you should undo the change to regain their loyalty.Only when you know your customer deeply can you make the ‘perfect’ offering. CRM practices and systems act as the central information hub for beginning to build those relationships, in turn improving your bottom line.
How do you measure customer relationships?
You may be thinking that all sounds great, but how do you actually go about doing it? Is there a single, reliable ‘best practice’ for actioning a customer relationship-building strategy?
Truthfully, no, there isn’t.
When it comes down to it, customer relationship building is more of an art than a science.
But there are indeed certain metrics, channels of communication, and techniques you can deploy to begin building the foundations of great customer relationships.
Whether independently or via intelligent software — we’d recommend the latter — you should start by building customer profiles that draw from all the touchpoints the customer has with you.
From there, you will mostly be monitoring and analyzing information in these 2 important categories: customer attitudes and customer behaviors.
Customer attitudes are the thoughts and opinions customers have about their entire experience with your business.
You should be aiming to get precise, honest feedback from customers about everything, from your product down to the quality of customer service interactions.
These can be collected from routine satisfaction surveys, any digital feedback mechanisms you have, such as online reviews, or simply any direct communication that takes place with customers.
Customer behaviors differ in that they relate only to the real-life actions a customer takes with your business, as opposed to verbal or written feedback.
It’s arguably the more powerful of the 2 and often provides a numerical basis with which to evaluate customer relationships.
Basic customer behaviors like purchases, returns, and refunds are probably already being captured by your existing sales channel infrastructure. Some other behaviors — like social media engagement — benefit from additional software to effectively capture and process them.
Read also: Customer behavior analysis guide
How to build customer relationships with software
Speaking of software, you may have figured out by now that it would take a significant financial and time investment to establish a comprehensive customer relationship management system internally.
Thankfully, great software that does all of the above and more already exists.
The only remaining piece of the puzzle is how to effectively utilize the software to actually go forth and build amazing customer relationships.
Here are just a few of the CRM tool features and practices your business could try to boost your sales, keep customers loyal, and improve your overall product and service.
Know your customer deeply
At their core, CRM platforms should offer an accessible hub for detailed, up-to-date customer information.
This should include: who they are, what they like, and your entire interaction history with the customer all in one place. This means you can then run business metrics — like calculating customer lifetime value (CLV) — in order to inform your next relationship-building move.
To go a step further, it would be great if you had the option to action communications or responses directly from the CRM platform for maximum efficiency.
Let’s take a quick look at monday.com could help support this.
monday.com: contact management
Thanks to nearly endless flexibility and customization options, you can finally build your dream CRM on monday.com.
Get a 360° view of your customers and clients, complete with communication history, lifetime value, position in the wider sales pipeline, and more. Then, manage all interactions, emails, contact info, and related documents right there on-platform with social integrations.
When everything’s in one place, you take the legwork out of managing customer relationships so your team can focus on delivering an excellent experience without the hassle.
Connect customer data to marketing operations
Having a centralized customer data hub is great in itself, but what if you could intelligently connect it to your business’ marketing arm?
Great CRM software should be a base that acts as the entry and exit points for marketing activities.
Feed sales leads and marketing outreach data directly into your dashboards, where you can then analyze performance, formulate better targeting strategies, and launch revised campaigns with your new insights.
We’ve got your back with this too.
monday.com: marketing management
On monday.com, you can manage your entire marketing operation in one place.
You can visualize marketing milestones and deadlines in our colorful dashboards, manage lead generation that integrates directly to the platform, and process lead responses to determine the highest potential follow-ups.
You can run actual marketing campaigns and enable collaboration between sales and marketing teams. A world of possibility opens up when you connect customer data to marketing.
Automate responses for better customer satisfaction
We’ve all dreamt of a world where robots do our jobs for us. Well, we can inch closer to that reality thanks to automations.
Automations allow you to set up custom actions that are triggered upon a specified change. In building customer relationships, timely responses to communications are critical and have measurable effects on retention and loyalty behaviors.
Your CRM should allow you to design custom automated responses for all kinds of inflow communications and actions taken by customers, and create a reliable marketing workflow that suits your needs.
And, as you may not be surprised to discover, we’ve got you covered for automations over on monday.com.
monday.com: workflow automations
Not only are you granted the ability to create an endless amount of neat automations in whatever operational domain you could imagine, but you can also integrate these actions with your current digital toolset.
For example, you can set up an automatic notification to your customer service desk via Gmail when a support ticket is raised to a certain level.
Or set it up so that when a MailChimp email marketing campaign goes live, a response summary is created in your marketing dashboard.
Customer relationships managed
At this point, if you’re not being proactive about building solid relationships with your customers or clients, you’re probably already losing the race.
Businesses are stepping up their game when it comes to establishing trust and loyalty among their customers, and their secret weapon is undoubtedly a robust CRM software solution combined with the knowledge and skill to execute when and where it matters most.
To jumpstart your team’s foray into customer relationship management, have a browse through our CRM templates to get set up in minutes.
From there, combine your intuition about what your customers want most deeply with our industry-leading customer data dashboards, intelligent marketing integrations, and workflow automations to take your customer relationships to the next level.