Customers are the core of any business, and their needs and satisfaction should be the primary focus. To do this, you’ll need to form genuine connections with your customers.
Building strong customer relationships can help you boost loyalty and reduce churn. But how?
In this guide:
A customer relationship is the relationship between a brand and a customer. It’s typically defined by interactions across several areas, including:
A customer’s experience with a business, its products, and its services defines their relationship – for good or bad.
Getting customer relationships right can mean everything in business. Not only can it foster loyalty, but it can also drive revenue and build a positive brand reputation.
When you have a strong, positive relationship with a customer, they are more likely to:
Nurturing customer relationships involves consistent, positive experiences at every stage of the customer journey. Some examples of this are:
With so much competition one click away, it’s hard to overstate the importance of building a rapport with new prospects, existing customers, and the advocates who can help spread the word about what you have to offer.
One way to know whether you’re making progress with your customer relationships is to set customer relationship goals. This gives you something to aim for and to track progress against, in areas such as:
Your Net Promoter Score represents the likelihood a customer will recommend your business to others.
Calculate your own NPS by asking customers to rate how likely they are on a scale from 1 to 10 to recommend your business to someone else. Next, subtract the percentage of detractors (those who answered with a 4 or below) from the percentage of promoters (5 or above).
Churn rate measures the percentage of customers lost over a set time. Churn rates vary across industries, taking into account factors like customer behavior, business model, and industry dynamic.
For example, healthcare services will have a lower churn rate than streaming services. This is because patients tend to stick with their healthcare providers due to trust and familiarity with doctors. In contrast, customers have less commitment to streaming services and can easily switch between platforms depending on what is available on each.
Churn in financial services stems from competition, poor customer experience, high fees, tech advancements, life changes, and economic shifts. Customers switch for better rates, service, or digital convenience. Firms track churn to enhance retention, loyalty, and overall customer satisfaction.
Calculate your own churn rate by identifying a specific window to measure. Then divide the number of customers lost at the end of that period by the total number at the beginning. A lower rate will always be better and represents a clear signal that most of your customers are happy.
Customer lifetime value (CLV) represents the total amount your average customer will spend on your brand, starting with their very first purchase and ending with their very last. The more loyal your customers are, the higher that number becomes.
One way to establish goals is to use the SMART system. Essentially, these can help you strategically plan the goals you want to aim for and how you will achieve them. SMART stands for specific, measurable, achievable, relevant, and time-bound.
Let’s say you have a low NPS score and customer feedback highlights long customer service wait times. When we apply the SMART framework, your goals might look like this:
See how applying a SMART framework can bring added clarity and drive to customer relationship goal setting.
Around three-quarters of consumers want a brand to know what they want, and to send them personalized offers based around this. But only one in three brands actually delivers. What’s behind this shortfall?
Well, many brands probably fail to properly understand their customers. Grouping your customer base into segments and personas can help and is an important first step in this process.
Customer segmentation uses audience data to group customers based on factors like shopping behavior, demographics, and psychographics. Grouping customers of similar ages and interests and buying habits together can streamline marketing efforts.
Buyer personas are fictional but illustrative customers that represent segments of your audiences based on demographics, motivations, and pain points. For example, a persona might be in a certain age group, such as millennials or baby boomers, with certain interests, income levels, and family commitments. Advances in audience segmentation have brought personas to life, using real-time data.
Buyer personas and customer segmentation work together to enhance personalized marketing.
Customer segmentation and buyer personas are underpinned by data. Customer data can empower your brand, by helping you better understand about the people who buy from you and how to make their experience more fulfilling.
Rewarding customer relationships start with ethical data gathering. Today, there are many options for brands wanting to gather data, from quantitative methods to qualitative methods.
Options include:
To understand your customer data, you’ll need to analyze it. The aim is to identify valuable insights from the data you have gathered — otherwise known as data analytics. These techniques can help:
All the above are designed to help a business learn from the past and make better decisions in the future. By understanding how a customer feels about your brand, why they abandoned their purchase at a certain point, or why they didn’t like the offers you sent , you can make better decisions going forward.
Throughout all your data collection, you should ensure you’re compliant with rules and regulations around privacy law. The California Consumer Privacy Act (CCPA), for example, applies to the state of California — and is the first comprehensive consumer privacy law in the US.
Being compliant with the CCPA can help you reassure customers that you take their privacy seriously when gathering their data.
The best way to build strong customer relationships is to provide efficient, genuine customer service. Great customer service is:
Personalization is no longer optional. In fact, 81% of US shoppers prefer brands that offer a personalized experience, according to a Forbes study in 2024.
You can cater to this by:
Explore how brands in telecoms use personalization to retain customers.
Only one in four customers trust companies, despite eight in 10 executives believing customers do highly trust their brand, according to PwC’s Trust Survey.
Here’s how to earn customers’ trust:
Customers come to you to make a purchase, but you can build a stronger relationship if you create additional value for them.
Rewarding loyal customers will typically build goodwill and loyalty. A well-conceived rewards program can also convert more casual shoppers into long-term advocates.
An effective loyalty program might include:
To ensure your customer relationships deepen and grow, it’s important to monitor their progress. Here’s how:
Imagine you run a retail clothing store. First, you would define your key performance indicators (KPIs) for building customer relationships. This would incorporate customer experience metrics, customer loyalty and retention metrics, and operational metrics.
Ensure that you regularly monitor and learn from your NPS (net promoter score), CSAT (customer satisfaction score), churn rate, and CLV (customer lifetime value), This can help to reveal how customers feel about your brand.
To improve, you need to have something to constantly aim for. For example, increasing customer retention by 15% over four months by enhancing in-store service, offering personalized loyalty rewards, and reducing checkout times. Updating your SMART goals regularly means that once you’ve achieved one goal, you can move on to the next. Aim for constant iteration and improvement.
Customer feedback can range from post-purchase surveys and online reviews to loyalty program data. Use data gathering and analytics in real time to better understand your customers. Descriptive analytics can help understand why you got such a low NPS score, for example, while predictive analytics can gauge what a customer will want next.
Act on the learnings from your analytics. Pivot personalized offers to a product that’s proving popular, map and revise customer journeys to smooth out any issues, and introduce a new campaign to make your customers feel more valued.
Good customer relationships don’t come quick — or easy. They’re nurtured over time and should be tended rather than rushed. Get them right and you can boost customer loyalty and value. Get them wrong and customers will turn to your competitors.
Prepare to invest in understanding your customers and how they feel about and interact with your brand. Monitor how that changes over time.
Technology is key to building great customer relationships. Most of what we have discussed in this article can be realized or enhanced with the help of a customer relationship management platform, or CRM. This software can manage customer data, provide insights and analytics, handle marketing automation and personalization, and more.
Adobe Experience Platform brings together tools such as Adobe Real-Time Customer Data Platform, Adobe Analytics, and Adobe Journey Optimizer to help you build better relationships with your customers.
Request a demo to see what Adobe Experience Platform can do for you.
