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Updated Dec 13, 2023

A Guide to Managing Customer Relationships

Maintaining excellent customer relationships boosts retention and loyalty.

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David Gargaro, Business Ownership Insider and Senior Writer
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

Table of Contents

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Today’s consumers expect personalized service and an excellent customer experience when purchasing products and services and interacting with brands. To foster customer loyalty, satisfaction and retention, businesses must focus on managing customer relationships. We’ll explain what’s required to ensure top-quality customer relationships and create great experiences for your customers.

Did You Know?Did you know
According to Salesforce's State of the Connected Customer report, 80 percent of those surveyed say how your company engages with customers is as important as its products and services.

What are customer relations?

The term “customer relations” describes how your company engages with customers with respect to improving the customer experience. Improving the customer experience involves overcoming short-term challenges and developing long-term solutions that ensure customer success. The goal is to build a mutually beneficial relationship that begins before and exists long after the initial purchase.

Every part of a business will affect customer relations. Your customer service, customer success, customer support, marketing, sales and product development teams must help build and maintain customer relationships. 

Customer relations has two functions:

  • Reactive functions: Addressing customers’ reported issues, such as replying to customer complaints, working with customer support.
  • Proactive functions: Building long-term relationships with customers and establishing brand loyalty, such as providing product information, promoting discounts and special offers.

Note that customer service and customer relations are not the same; customer service is part of customer relations. Customer service is an inbound function ― your company provides customer service in response to customer actions, such as a customer calls for support with a product. 

In contrast, customer relations involves both inbound and outbound functions: Your company reacts to customer requests for assistance and takes action to improve future customer engagement. For example, you may set up a help desk to address future customer calls and connect with customers more effectively. 

Key TakeawayKey takeaway
Proactive customer relations efforts help create a better customer experience and improve consumer-brand relationships.

Why is customer relationship management (CRM) essential?

CRM is essential for continued business success for the following reasons: 

  • CRM builds customer bonds: CRM helps build bonds with customers. You won’t have to put in as much effort to convince them to buy from you because they know and trust your offerings. 
  • CRM fosters repeat purchases: CRM efforts increase the likelihood of customers making future purchases.
  • CRM builds brand loyalty: Successful CRM practices help with building customer loyalty. Loyal customers are more likely to make continued, repeated purchases. Customer loyalty is critical because it helps generate consistent revenue over the life of the customer relationship.
  • CRM keeps you top of mind: CRM tactics help keep your brand top of mind when customers seek solutions for other issues or when they need options related to your offerings.
  • CRM fosters word-of-mouth advertising: Successful CRM encourages customers to promote your brand to friends, family members and colleagues. This word-of-mouth advertising can help grow your business.
  • CRM boosts customer retention: Improving customer relations means your company will have higher customer retention rates. Customers are more likely to stop purchasing a company’s products or services if they have an unsatisfactory customer experience. However, customers will overlook a company’s mistakes when it puts in the effort to create a satisfying customer relations experience. Being transparent in your attempt to make things right will help reduce churn.
  • CRM increases customer satisfaction: Most dissatisfied customers won’t complain about a poor customer relations experience. They won’t return to make another purchase. As a result, it’s difficult to tell when customers are unhappy with your business. Investing in customer relations can help prevent customers from unexpectedly ending their relationship with your brand. What’s more, creating better customer experiences can influence purchasing decisions more significantly than advertising and marketing.
Inviting feedback can improve customer communications and help you solve their problems faster, helping build consumer trust over time.

Types of customer relationships

Companies can have different types of customer relationships within various customer segments. Customer relationship types include the following:

  • Transactional: The company has no relationship with the customer beyond a transaction. For example, consider a retail kiosk in a mall or airport.
  • Self-service: The customer does not interact directly with the company. Instead, the company provides the tools and processes necessary for the customer to help themself. For example, think about a gas station with self-service gas pumps and vending machines for customers.
  • Automated services: The company provides automated processes to support the customer’s self-service. For example, hotels often set up personal online profiles according to customer characteristics. They gather and use information from past purchases and interactions to better serve the customer.
  • Long-term: The company interacts with the customer repeatedly over a long period. For example, car dealerships sell vehicles to customers and provide regular service and maintenance as long as the customer owns the vehicle.
  • Personal assistance: The customer interacts with the company through communications with customer relations representatives during or after the sale. For example, computer companies provide ways for customers to interact with service reps via call centers, point-of-sale purchases and email interactions.
  • Dedicated personal assistance: The company assigns a dedicated customer representative to a specific client. For example, an investment firm may assign a top-notch financial advisor to work with high-net-worth clients.
  • Community: The company sets up an online community where its customers can share knowledge and help other members solve their problems. For example, a pharmaceutical firm might create an online community where people with diabetes can share tips, advice and solutions.
  • Co-creation: The company works with the customers to co-create value. For example, an online book retailer could invite customers to create favorite book lists and publish book reviews for other customers to enjoy.

How to build positive customer relationships

Building positive customer relationships is a company-wide effort. Ensure everyone is on board with the following best practices: 

1. Put customers first.

Ensuring positive customer relationships begins with developing a customer-centric company culture. Your team should focus on customer success while implementing long-term solutions. When done correctly, your employees will be motivated to help customers because they understand their role and its ramifications. 

Consider the following strategies to help your company become more customer-centric:

  • Create a customer journey map to understand a typical customer’s buyer journey.
  • Anticipate customers’ needs at various steps of the relationship.
  • Employ a customer relations executive to lead the development of customer relationship initiatives and processes.
  • Create a seamless customer onboarding process.
  • Collect and utilize customer feedback.
  • Meet with customers face-to-face.
  • Be proactive about customer service.
  • Implement customer service solutions and technologies.
  • Focus on post-purchase customer relationships. 

2. Help customers serve themselves.

While customizing customer relations for every consumer would be ideal, it’s not practical or cost-effective. Tech solutions can provide customers with tools to help themselves solve issues and find information at their convenience. For example, implement chatbots on your website to guide visitors to the information they need. You can also use knowledge bases to address typical customer questions.

3. Improve accessibility to customer support.

Customers should have ready access to customer service and support teams to ensure a quality customer experience. While self-service help desks can be valuable additions to your customer relationship strategy, human interaction will be necessary at some point. Ensure your support staff can adequately address customer issues when customers need you. 

Ensure your team practices excellent customer service phone etiquette, such as listening intently, not interrupting, keeping customers informed and answering calls promptly.

4. Measure customer satisfaction levels.

Tracking and measuring your customer satisfaction levels is crucial to ensure they improve. To do so, build feedback into your customer relations system via tactics like customer satisfaction surveys and Net Promoter Scores. After collecting feedback data, work to improve weak areas. Continue collecting customer feedback and tracking the results to ensure customer satisfaction scores improve.

5. Demonstrate appreciation for customers.

You don’t have to create grand gestures for every customer interaction. Providing customers with a positive experience and exceeding their expectations in small ways will go a long way toward building strong customer relationships. For example, develop a customer loyalty program that rewards good customers for their patronage.

6. Commit to employee training on customer relations.

Your employees should be knowledgeable, skilled and highly motivated to solve customers’ problems. Notably, customer relations training should include elevating team members’ soft skills. For example, instruct your team on using a professional communication style, practicing active listening and focusing on problem-solving.

Skill sets can vary widely from person to person across an organization. Therefore, investing in regular and continual training is vital to ensure all employees understand your company’s policies, procedures and standards. This level of training will help create a more consistent customer experience and improve customer relationships.

7. Establish a supportive workplace environment.

According to a Frontiers in Psychology study, happy employees are positively and directly linked to higher cross-selling performance. For this reason, creating a positive work environment makes business sense. When customer relations representatives are more positive and productive, they resolve customers’ problems quickly, improving customer satisfaction rates. In contrast, customers can tell if a customer relations rep is in a bad mood, which will affect the tone of the customer experience.

8. Improve your first-call resolution rate.

Your first-call resolution (FCR) rate is a crucial CRM metric that measures the percentage of calls resolved in the first call. No follow-ups or additional touchpoints are needed. A high FCR rate equals higher customer satisfaction. If customers must make multiple calls or deal with more than one representative to resolve their issue, their frustration level will rise and they will become more dissatisfied with your service. 

Fewer calls and touchpoints also indicate an efficient customer relations team. Ensuring your service and support teams are equipped to solve issues on their own will mean better customer relations and happier customers. For example, empower your customer service team to solve user problems and compensate customers, if necessary.

9. Increase efficiency with software and technology.

Improve customer relations by employing tools, technology and software to help support and service representatives manage high call volumes. For example, help desk software will help customer service, support and success departments manage and improve customer interactions. Additionally, CRM software can track customer accounts and help create more satisfying experiences because reps can access more information about customers when assisting them,

The best CRM software

When your business implements the best CRM software, managing customer relationships becomes much easier. Some top-notch platforms include the following:

  •’s sales CRM: With’s CRM platform, you get various boards for organizing your processes, customers and projects. Our sales CRM review explains how the platform’s extensive automations can expedite your internal CRM processes. 
  • HubSpot CRM: This platform is a one-stop shop for managing service, operations, sales, marketing and your website. It also integrates with just about any third-party application you can name. Our HubSpot CRM review details the immense power you get with this CRM platform.
  • Salesforce CRM: Salesforce is a leading name in CRM for a reason ― few other platforms are so feature-rich at even their lowest price points. The platform stands out for its functionality as a customer data knowledge base that everyone on your team can access. Dive into our Salesforce CRM review to learn how this platform can grow with you as your business scales.
  • Zoho CRM: This CRM is among the easiest platforms to use, with substantially more affordable pricing than many competitors. Zoho also doubles as a space for hosting team meetings and giving presentations to customers. Read our Zoho CRM review to learn more.
  • Zendesk Sell. With this vendor, you get a user-friendly CRM tool that folds neatly into a customer service platform. Zendesk Sell is designed to exist alongside Zendesk Suite, a powerful ticketing solution for any customer-oriented business. Learn more via our Zendesk Sell review.

Managing customers is all about relationships

Although there are tons of moving parts in the overall process of managing customer relationships, one simple principle underlies them all. Customers are people and building and sustaining relationships with them isn’t all that different from keeping in touch with your friends. Think about CRM from this more relaxed perspective and all the steps required to build positive relationships will come more naturally.

Max Freedman contributed to this article.

author image
David Gargaro, Business Ownership Insider and Senior Writer
David Gargaro has spent more than 25 years immersed in the world of business. In 2018, he published the book How to Run Your Company… into the Ground based on his firsthand experience at a small business. In the guide, he advises on everything from strategic partnerships and product development to hiring and expansion — and all that's in between. Gargaro's expertise, which also extends to sales, marketing and financial planning, has also been published in the business-focused Advisors Magazine, Moody's Analytics and VentureBeat. He has been hired to speak on topics like the customer experience and created an entrepreneurs' toolkit for startup founders.
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