Managing Relationships with your Customers

This month I want to focus on the importance of managing customer relationships and the communications with them.

Smaller retailers typically can build up a closer relationship with customers, as they will generally be part of the local community and they will get to know them, especially if they are loyal regulars. However, that shouldn’t mean that small retailers assume that they don’t need to work just as hard as the chain stores when it comes to good quality customer engagement – through communications and managing customer relationships.

Good customer communication is essential and it starts before they even cross the threshold of the store – through your advertising, social media, website, and windows. The way you communicate your brand and offer sets expectations as to the service and experience in the mind of the customer – so it is critical that you don’t over promise and under deliver.

Managing Customer Relationships: The 4-step “Customer Engagement Cycle”

When I talk or write about customer engagement and relationships I break it down into a 4-step cycle which can create an upward spiral. The steps include attraction, conversion, retention and advocacy.

1. Customer Attraction

If you know your ideal customer then you’ll hopefully have ensured your range offering, pricing, promotions and marketing are all focused on their needs and wants – so attracting the right customers shouldn’t be too challenging.

However, you do have to remember that you need to keep in touch with your customers, through regular engagement, so you can ensure you are “where your customers are”. Your existing customers are a wealth of insight into how you can attract and retain new customers – so talk to them, try and get a feel for “where they are” and by that I mean where they spend time – physically and virtually e.g. what clubs do they belong to? What are their hobbies? Where do they work? What local media (radio, press, magazines) do they listen to / read? What social media do they use? Etc.

Through conversations with your customers, you can ensure you get visibility in all the right places and use the right mix of media to not only keep them coming back but also to attract more of your ideal customer.

2. Customer Conversion

The conversion process should almost happen naturally if you have the right environment for your customer to be able to browse product and find out what they need to know to support their purchasing decision. Don’t forget though, through good communication between you, your staff, your point of sale, and your customers, you can increase the likelihood that they will buy. You don’t need to sell, you need to ensure you supply sufficient information, in a way that they trust, to facilitate that purchasing decision and to secure their business.

3. Customer Retention

Retention happens over time, primarily thanks to ongoing communication and engagement of your customers, and, through a consistent delivery of your service promise. Through showing an interest in your customers, and through reliably meeting their expectations, you build loyalty. This means your customers keep coming back and most importantly keep communicating with you (sharing insight into what matters to them, and others like them) and all because you make shopping a simple process and a pleasurable one!

4. Customer Advocacy

Advocacy happens when your customers start to recommend and refer you to their network – this aspect of customer communication creates the “upward spiral” effect of the customer engagement cycle because once customers reach the advocacy position they essentially contribute to the overall attraction process. This is a great position to be in – and through regular contact with customers, you can encourage it! Invite those you know to be happy, loyal customers to leave reviews for you online for instance, or engage with them through your social media profiles – creating positive conversations in a public forum only serves to encourage more people to investigate what it is they are “missing out on” that others seem to love so much!

To wrap up, the best advice I can offer to an independent retailer wanting to improve the way they are managing customer relationships would be:

1. Spend time analysing your ideal customer profile, that is, the most profitable customers – who are they? What are their needs and wants?
2. Mindful of the ideal customer, consider how you can attract and retain them – what changes do you need to make across your marketing, ranging, service proposition, retail environment – in fact across all communication channels – in order to appeal to them?
3. Finally, don’t ever get complacent – keep your attention firmly on managing customer relationships – keep the conversation going with them to ensure you stay relevant and up to date with their needs and wants.

So, here’s to managing customer relationships better and building relationships with all of our customers!