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Managing your customer relationships

When running a high-growth business you could well find the amount of attention you can devote to each customer becomes increasingly stretched as your company develops and your client base expands.

But even when rapid growth places additional strain on the product or services you deliver, it is essential to remain aware of the importance of managing customer relationships.

Customers expect a high level of service. Regardless of the quality of the product or service your provide, they will not stay loyal to you on a long-term basis unless you treat them properly before, during and after a sale.

You need to consider how you communicate with your customers, how effectively you respond to their demands and how you gather and act on their feedback.

1 Communicate with customers

1.1 Keep customers involved and satisfied at all times.

Regular interaction with your customers will help build trust and loyalty. If your customers believe that you are communicating with them openly, they will feel their relationship with you is one of mutual trust.

Standards of service are constantly improving, so keeping customers satisfied is a continuous process.

Ensure your whole business is focused on meeting customers' needs. Your product or service may be excellent, but the customer experience can be undermined by late delivery, sloppy invoicing or an off-hand employee.

1.2 Comply with your legal obligations to keep customers informed.

Under distance-selling rules you are legally obliged to provide customers with certain information about their order including a description of the goods or service, price, cancellation rights and delivery information. You must also make it clear who you are by providing your business name and location, address of your registered office and contact details.

Distance-selling rules also require you to provide customers with an order confirmation.

Under the Consumer Credit Act you must provide consumers with a signed, written agreement detailing the amount and period of credit, cancellation and cooling-off rights, default and early repayment charges and the rate of interest. You must provide at least one statement per year to consumers on a fixed-credit agreement and notices of any amounts in arrears if a consumer misses or falls behind with payments.

1.3 Use every channel available to talk to your customers.

As well as telephoning your customers to keep in touch, you might use your website - or even an extranet - to provide them with useful information and gather feedback.

You might email your customers regularly with useful information - but make sure you have permission to contact them in this way (see section 7).

Respond to customer contact quickly and efficiently. This will make them feel their feedback is appreciated and acted upon.

1.4 Consider appointing key account mangers for important clients.

Remember that it is easier and more cost effective to retain existing customers than it is to sell to new ones.

A key account manager could provide a more personal service to your most valued customers.

2 Measure customer service levels

2.1 Identify key performance indicators (KPIs).

These can be anything from the number of complaints you get and how many faulty goods are returned to order-fulfilment times and how regularly you contact each customer.

2.2 Monitor KPIs regularly and make changes if necessary.

Make sure you use the information you gather to improve your customer service. For example, if your level of on-time deliveries falls, you need to identify why and take steps to address the problem.

2.3 Collect information about your customers.

Gathering regular feedback and monitoring customer satisfaction is essential to maintain high standards of customer care (see section 3).

You need to be constantly in touch with customers' needs and market developments to keep a step ahead of competitors.

2.4 Benchmark your service against that of your competitors.

Ask your customers who they consider your competitors to be - this can provide some surprising insights into your market position.

Find out how your performance compares with your competitors. What do you do better - and worse? You can then take action to exploit your strengths and minimise your weaknesses.

It can also help to benchmark your performance against similar suppliers (but not competitors) that your customers use. Your customers may use their experiences with such suppliers to judge your performance.

2.5 Communicate relevant information across your business.

Put internal processes such as appropriate contact-management systems in place to communicate relevant information on customer contact.

If a customer complains, make sure that a relevant account manager knows. If the complaint is, for example, about product quality, ensure the person responsible for manufacture is informed and that action is taken to avoid a recurrence.

2.6 Remember your customers' customers.

If you sell to other businesses, consider how your service levels will affect their customers. What can you do to make their lives easier?

3 Gather continuous feedback

3.1 Use a range of means to find out more about customers - and tell them about what you can offer.

If your customer produces a newsletter or other marketing communication, ask to be sent regular copies so that you are aware of changes to their business, potential threats and new opportunities.

Use technology to develop the relationship you have with your customers (see section 7). For example, if you have a website, provide a feedback form for customers and post answers to frequently asked questions.

Use hard-copy or email newsletters to keep them in touch with your business developments, new product launches, achievements and awards.

3.2 Make regular face-to-face contact with your customers if this is cost-effective.

By visiting your customers you can better appreciate how their business works, and they will feel that they are a priority customer because you have made the effort to come out and visit them.

Getting to know your customers on a more personal footing will help to develop a loyal and trusting relationship.

3.3 Put processes in place to gather feedback at every opportunity.

Do not wait until customers approach you with problems - they may never tell you about them. Be pro-active and set up processes to collect feedback.

Give anyone dealing with customers a feedback form. This means that if there is a problem it can be rectified quickly.

Attend events and exhibitions that you think customers will attend.

Consider involving customers in the development of new products or services.

Always act on any problems that you identify. You may want to use 'mystery shoppers' to check standards of service at every point where customers interact with your business.

Thank customers for their feedback and let them know if you implement any changes as a result.

3.4 Use surveys to assess satisfaction levels.

Keep questions brief and specific, and consider using an incentive as an inducement for customers to respond.

Avoid overloading customers with such surveys.

Benchmark your surveys to evaluate if your business is making improvements or remaining static. If the same complaints and problems keep occurring, it shows you are not listening to your customers.

Such surveys should be an addition to the ongoing process of gathering feedback from customers. Whenever the customer is in contact with anyone representing your business, they should be asked if everything is meeting their expectations.

4 Assess your resource levels

4.1 Look at resource levels throughout the whole supply chain.

Assess whether buying in bulk, for example, changing delivery days or switching to just-in-time delivery could bring mutual benefits and help you deliver an improved service to customers.

Pay close attention to your relationships with suppliers. When your business is stretched, you will need their support.

4.2 Ask your suppliers whether they have sufficient capacity to cope with your growing needs.

As your business develops, you may outgrow a supplier. You may have to source materials from new suppliers or use several at the same time.

If you outsource delivery, talk to several transport businesses to find out what they can offer your business.

4.3 Run an audit of your internal resources.

Make sure you have enough phone lines and people to answer calls.

If you manufacture a product, assess whether you have the capacity for increased work. You may need more staff or additional equipment.

Assess how you could work more efficiently. If, for example, you take orders via your website, consider integrating this with stock control and accounting systems.

4.4 Consider your cashflow and investment resources.

Avoid overtrading. Do not take on orders that you cannot fulfil.

Be clear on how much extra funding you will need to support your growth and how quickly that growth will bring a return on the investment.

4.5 Think about how you can prioritise customers.

Often a small proportion of your customer base - perhaps as little as 20 per cent - can be responsible for as much as 80 per cent of sales and profits. You need to establish who your most profitable customers are and ensure they receive the highest levels of service.

These are the clients for whom you may want to nominate dedicated account managers to deal with any problems they may have.

You may want to provide extra benefits for these customers - by waiving minimum order levels or inviting them to special events, for example.

5 Assess and monitor your delivery capabilities

5.1 Aim to deliver on time, first time, every time.

Assess your delivery reliability in fulfilling customers' needs.

Make sure your delivery system ensures that the customer receives exactly what they are expecting, when they are expecting it. Late deliveries, incorrect deliveries or damaged goods only cost you money and seriously damage customer relationships.

5.2 Collect information on deliveries.

Talk to your customers and find out if they are satisfied with your delivery standards.

Delivering slightly earlier or later, or even on a different day, might make all the difference to them.

Tailoring your service to suit your customer will give them the impression you are respecting them as a key account.

5.3 Act on the information you gather.

If a customer complains about delivery, treat it as an opportunity to improve the service.

Act on any negative comments and keep your customer informed about the changes you are implementing to avoid a repeat.

A customer who believes their complaint has been handled efficiently and that they have helped to rectify a problem will recognise that you are listening to them and may become more loyal as a result.

6 Ensure staff are suitably trained

6.1 Staff who have regular contact with customers should receive training on customer care.

These staff are at the front line of your business and need to portray an efficient, professional image at all times.

If you do not have anyone in-house who can train staff, consider hiring a professional trainer to plan and carry out sessions for you.

6.2 Ensure all staff have been carefully trained in how to do their jobs.

Training for all staff is vital. Ensure they know why they are doing their particular job and how it will affect the customer if they do not do it properly.

For example, packing a product incorrectly could result in the product being damaged during delivery, causing inconvenience to the customer and costing your business money dealing with the return and providing a replacement.

6.3 Keep people informed about your business strategy.

Involving everyone in the business helps them to understand your aims and objectives, also keeping them up to date with customer needs and changing demands.

Encourage staff to support one another and to work together to meet customer needs. Avoid a 'blame culture' where people blame other employees to explain problems to customers.

7 Make the most of technology

7.1 Upgrading the technology you use could improve your customer relationships.

Network all your PCs so that any member of staff can retrieve customer information and deal with a query.

7.2 Develop an effective database.

A good database or customer-relationship-management system (CRM) can help you to record, plan and manage contact with your customers. It allows you to store and use information you learn from customers, whether this is in person, on the phone, by email or over the Internet.

CRM allows you to analyse your customer base and determine the characteristics of your most profitable customers. You can then plan marketing campaigns to target these customers and potential clients with similar characteristics - and track their success.

Remember that your database is only as good as the information on it - it is essential to keep your data up to date.

7.3 Examine other ways in which you can use technology to boost your customer service.

You could set up a secure extranet to allow customers to access key information such as pricing and stock levels, make repeat orders, give feedback or access manuals or other documents.

7.4 Find out if integrating your IT systems could help you bring added benefits to customers.

The integration of customer service with other functions such as ordering, warehousing and delivery can help your business to remain customer-focused.

Consider if using technology could provide tighter stock control, more efficient ordering and delivery for your customers while reducing your costs.

It may be possible to link your technology to that of both your customers and suppliers. Bringing the supply chain together in this way can produce more efficient order-processing and financial administration.

7.5 Ensure you comply with relevant legislation.

If you hold information about your customers in either electronic or hard-copy form, you must comply with the Data Protection Act.

ln some cases, you will need to notify the Information Commissioner of the information you are collecting, and for which purpose.

If you send marketing emails to potential or existing customers, you must comply with a range of requirements under e-commerce regulations.

For more information on the Data Protection Act and whether you need to notify, visit the website of the Information Commissioner

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