Cultivating customer relations is crucial to the success of any business. In this lesson, you'll learn about customer relations including some of its key concepts. A brief quiz follows the lesson.
What Is Customer Relations?
Customer relations is the process and manner by which a business develops, establishes, and maintains relationships with its customers. Businesses rise and fall through the support of their customer bases. Consequently, it is absolutely essential that you develop effective customer relations. On a practical level, customer relations is effectively communicating with your customers and promptly addressing complaints and treating them as opportunities for improvement. In other words, listen to your customers!
On a more strategic level, many believe placing customers at the center of all of your business activities - including product design, quality, and pricing - is a central component of building effective customer relations. In other words, you need to see the world through the eyes of the customer, with them at the center and your role as serving the needs of your customers.
Example of Customer Relations
Let's say you're able to retire a bit early at 55. You really don't want to retire, you just want to do something more to your liking and become your own boss. You love fishing, so you decide to start a fishing equipment company with a focus on the manufacture of both bait and fly casting rods and reels. Before you even begin, you utilize a rather informal focus group consisting of ten of your fellow anglers to discuss what they like and don't like regarding the current selection of fishing rods and reels. You also find out what they think is missing. You use their responses to develop a product line that you feel will meet your customers' needs.
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After about a year of planning and start-up activities, the first rods and reels roll off the assembly line. You're able to distribute your products to a few large sporting goods retailers that specialize in outdoor activities. Each product comes with a warranty that exceeds the industry standard. You also provide a free customer service phone number answered by a live person to promptly address any concerns or questions. Any defective product is taken back without question, and you pay for the shipping. You mail out an annual catalog to all customers as well as a free monthly newsletter to customers during the fishing season.
Finally, you plan on sending out customer satisfaction surveys and market research surveys to your customers to promptly address any concerns and to try to continue to meet your customers' evolving needs. You hope to build your business based on prompt and superior customer service with an eye towards developing lifetime customer relationships by placing the customer at the center of your business.
Customer relations is the process by which you develop, establish, and manage the relationship with your customers. Effective customer relations involve listening to your customers' needs and concerns and addressing them. The best way to approach customer relations is to place your customer at the center of all your company's activities and see your company's role as serving the needs of your customers.
The business case below is designed to help you apply your knowledge on Customer Relations (and their importance) in a real-life scenario. You are taking on the role of a consultant that is assisting a mobile app developer that makes mobile video games.
You receive a call from Nate, the Chief Executive Officer of Boomer Games, an application development company that designs and launches mobile video games on both Android and iOS.
"Our first game, Clash Of Armies, was such an amazing success that surprised all of us. Our developers designed the game over a team dinner, and it turned out to be exactly what customers wanted. Seeing that Clash Of Armies is getting a bit old, we decided to launch a new game for the Holiday season: Santa Run, a game where Santa must deliver gifts to all homes in the village on Christmas Eve while running away from the Grinch who wants to ruin Christmas. Our team developed it the same way as Clash Of Armies: We ordered pizza one night, and we designed the application's blueprint within a few hours. I love this type of development because we don't have to ask anyone for advice or wait so long before launching the game. The game was released in the app store a month before Christmas. We were shocked when we saw that people who tried the game actually hated it. Some of our most loyal Clash Of Armies players wrote us messages saying that it was offensive to them to see the Grinch catching Santa Claus as it ruined their Christmas spirit. It is safe to say that we made a big mistake, and we want to change our ways. But I'm out of ideas. Can you explain to me 2 possible activities we can do next time to better understand what our customers want?"
Students can answer this creatively (it is actually encouraged) as long as they refer to the case facts. Potential ideas can include:
Establishing a focus group of 5-10 loyal customers to gather their thoughts on potential games and contribute their own ideas to the development team.
Releasing a beta version and collecting customer feedback before releasing the official version.
Perform market research on customer preferences for video games and sentiments towards the holiday season.
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