In the B2B-sector (but in the B2C-sector as well) we have noticed that more and more companies paid extra attention to relationship management in recent years. But what is relationship management? Relationship management is the building, deepening and strengthening of long-term and value-creating relationships with your customers.
Why is relationship management so important for your company? What should you take into account when setting up and managing relationships? How can technology help you in the process towards sustainable win-win relationships?
Why relationship management?
To understand why relationship management is such an important aspect when it comes to business customers, we need to highlight some of the characteristics of the B2B-market.
- In business markets there is often a decision making unit (DMU), where different (often trained) employees have to decide together whether or not to purchase a certain product or service. This makes the decision making process more difficult and longer compared to a B2C-market;
- The complexity of goods in the B2B sector is generally higher than in the B2C sector. The decision and purchase process when buying, for example, a complex business software is different from the same process when buying a t-shirt or a pair of trousers.
- In business markets there are generally relatively fewer customers for each supplier. This strengthens the customers’ position;
- Business markets often involve large sums of money, which requires a certain relationship of trust before a purchase can be made;
- And so on and so forth.
All of the above factors indicate that prospecting new customers is more difficult, expensive and time consuming than ‘maintaining’ existing customers… And that is exactly why relationship management is so important. Good customer management ensures that customer turnover is reduced, saving you money and time.
In other words: by doing relationship management, you enhance the customer lifetime value of your customers. Read more about customer lifetime value and how to calculate it on HubSpot’s blog.
How to manage relationships?
The most important element of good relationship management is the fact that it works in two directions. It must deliver value to you and to the customer. Here are a few tips…
- Give one or a few people within your organization the specific task of dealing with relationship management: this to ensure continuity and consistency. The employee will grow in his role as time goes by. In addition, you create a certain pattern of recognisability for the customer, since he will often encounter the same individual;
- Classify your relations. All customers are important. But if we are realistic, not all customers are equally important. It is crucial to keep that in mind when it comes to relationship management. This way you can use the time you invest in it more effectively. How you categorise your customers is up to you, but a common model when it comes to classifying relationships is the ABC analysis. With this model you divide your customers into three categories according to a variable, for example generated profit. You will then adjust the relationship efforts according to the category in which a certain customer falls;
- Another great tip when it comes to relationship management is to involve your target group in the design phase of your product development process. A good example of this is the principle of design thinking. With this technique, organizations will fully align their product or service development to the customer. The first phase of the design thinking process therefore includes ’empathy’. The goal is to eliminate assumptions and develop a product or service in collaboration with the customer so that it fully meets his specific needs. Listening to your target group equals building value;
- And so on and so forth.
The remaining question is how to keep track of the data relating to your customers. A well-performing CRM system can do this consistently, clearly, efficiently and measurably.
We can help you with that!
We can help you on the road to good relationship management. A CRM module is integrated within the Phronesys web application. An ideal tool as a basis for your customer policy. Visit our website for more information about our CRM module and its features.
What are your experiences with relationship management? Would you like more information about our CRM module or Phronesys? Do you have any comments? Share your ideas with us: we would love to discuss them with you.