Relationship Management
 
Relationship Management
Service
 Staff Accountability
Role of Supervisor/Manager
Customer Needs
Customer Bonding
Relationships with Stakeholders
Dealing with Dissatisfied Customers
 
By: Kate Wakevainen
Parks, Recreation, & Tourism Resources 473
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Relationship Management
Relationship Management Defined:

Relationship marketing or management “…is the ongoing process of identifying and creating new value with individual customers and then sharing the benefits from this over a lifetime of association.” (Gordon, pg. 9)  In order to create a solid and lasting relationship with your customers, you must conduct a needs assessment, in order to know what they want.  It is impossible to form a relationship with your customers unless you get to know them.  Your company should strive to provide additional value to your customers by researching and anticipating what they want.
 
Relationship management is the combination of customer service, marketing and quality. (Christopher, Payne, & Ballantyne, pg. 4)  This process should not only include the time when the customer is making their purchase.  It must begin before the customer buys anything, and continue once they have done so. This method represents the switch from transaction marketing to relationship marketing.  Transaction marketing is very short term, perhaps focused on a single sale, with little or no customer contact and/or commitment.  Relationship marketing, however, has a long term focus on keeping customers, with a high degree of customer service and quality. (Christopher, Payne, & Ballantyne, pg. 9)
 
In order to effectively implement relationship marketing within your company, a focus on the customer is very important.  They bring value to your business, so naturally you want as many of them a possible.  This is where many businesses go wrong in terms of relationship management.  A new company needs customers to survive, but it is much more important and beneficial to start with only a few customers. By providing personalized quality service, you will begin a very firm, loyal customer base.  It is a slow process, but once you have the foundation, your company will grow on its own.  Your loyal customers will keep coming back and bring new ones to you at the same time.  Your reputation of forming quality relationships will be known, and this is perhaps the most effective form of marketing yourself.

References:
Christopher, Payne, & Ballantyne.  Relationship Marketing.  Butterworth-Heinemann Ltd., Toronto, 1991.
Gordon, Ian H. Relationship Marketing.  John Wiley & Sons Canada, Ltd., New York, 1998.
Goldsmith, Ronald E.  “Customer Relationship Management: Making Hard Decisions with Soft Numbers.” Journal of Leisure Research; Arlington, Third Quarter, 1997.  Online. ABI-Inform via ProQuest Direct.  Available:
http://www.argo-navis.com/competence/index.htm
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Service
 

Service is what your customers use to judge your company, its products, and its employees.  No matter what your company sells, you are really in fact selling service.  Providing the best service will increase the amount of loyal customers, which is of the utmost importance to the survival of your company.

What is good service?  The answer to that question will be different for every company, because good service is whatever your customers believe it to be. (Tschohl, pg. 7)  Whether it is a good location, employee courtesy, product knowledge, reliability, professionalism, availability, competitive prices, a wide selection, or degree of helpfulness, your company must take proactive steps to provide the service your customers demand.  Policies and goals must reflect your companies strive for excellence in service.

Why is good service so important?  There are many answers to this question.  First and foremost, pleasing your customers will increase the amount of repeat business they provide, and the amount of money they spend each visit.  Once you have a satisfied and loyal customer, consider each one an advertiser for your business.  The word of mouth recommendations they spread will help your organization attract new customers, who will come to your business because of your excellent customer service.  In fact, purchase and repurchase frequencies will directly depend on the level of service they receive.  This often makes the quality of service more valuable than the quality of the product. (Tschohl, pg. 2)

Personal service increases in importance as a direct result of increases in technology.  As technology leads us into a more impersonal world, the personal touch is the easiest way to ‘buy’ your competitive advantage.   Taking pride in your company and the services it offers, and then acting on this is one of the best ways to out do the less personalized competition.

It is necessary to view your customers as partners.  The relationship will most definitely be mutually beneficial.  A little extra generosity on your part will go a long way in securing a customer for life.  It can help establish trust and satisfaction, which will result in their positive opinion of your company.

References
Cannie, Joan Koob.  Keeping Customers for Life.  Amacom (American Management Association) New York City, 1991.
Coppett, John I. Professional Selling: A Relationship Management Process.  South-Western Publishing Co. Cincinnati Ohio, 1990.
Eastman Kodak Co.  Keeping the Customer Satisfied; A Guide to Field Service.  ASQC  Quality Press, Milwaukee, 1989.
Gordon, Ian.  Relationship Marketing.  John Wiley & Sons Canada, Ltd.  New York, 1998.
Tschohl, John.  Achieving Excellence through Customer Service. Prentice Hall, New Jersey, 1991.
 
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Staff Accountability
 

It is essential for managers and supervisors to empower and motivate their employees in order to achieve a higher level of service.  People buy from people, and if the sales person treats the customer with respect and quality service, than the business is much more likely to create a loyal customer.

The way your employees act and feel is going to directly influence the way your customers feel.  Both positive and negative behaviors send strong messages reflecting upon the entire company.  To control and decrease the amount of negative behaviors, such as boredom, depression, anger, and indifference, practices must begin even before hiring a new employee.

Behavioral interviewing is very effected when implemented in the hiring process.  This gives the staff consistency in what they are looking for to complete their team.  By asking potential employees about how they dealt with specific situations, employers can get a feel of how they would react to similar problems if hired by their business.

Once a match is made and a new employee is hired, the implementations of effective training programs are a necessity.  Companies should be willing to put both time and money into properly training their employees on the importance of customer service.  All it takes is one rude employee or inconsiderate action, whether in person or over the phone, to lose a customer for life.  Make sure part of your training program teaches the employee the value of an existing customer.  Training programs should also be an ongoing process, including such things as “…writing customer correspondence, handling difficult people, improving telephone techniques, time and task management, etc.” ( Timm, Pg. 138) Companies can not afford to reject the implementation of such training programs, due to the potential loss of profits and valuable customers.

Employee incentive programs can also be very valuable to a new company.  If your employees are given incentives for treating customers well and for contributing to a satisfied customer, then they in turn, will feel a sense of pride in their employer.  Your staff has the power to keep repeat customers coming back, so why not reward them when this happens.

If a customer has a problem and confronts a certain employee about it, it becomes the entire staff’s problem until it is solved.  Blaming other people for a customer’s problem or concern will not solve anything, and will make your business look unprofessional.  The focus must be on solving the problem quickly and efficiently in order to please the customer.  Don’t place too much emphasis on job descriptions.  Hold everyone responsible for problems among the customers until they are solved.  “Everyone’s role is to do what it takes to make it work for the customer, no ifs, ands, or buts.” (Furlong, pg. 193)  Sharing employee responsibility is an effective way to create a sense of teamwork and camaraderie, which results in better customer service.

References
Albrecht, Karl.  Delivering Customer Value, It’s Everyone’s Job.  Productivity Press, Portland, Oregon 1995.
Bhote, Keki R.  Beyond Customer Satisfaction to Customer Loyalty, The Key to Greater Profitability.  American Management Association, New York 1996.
Furlong, Carla B. Marketing For Keeps, Building Your Business by Retaining Your Customers.  John Wiley & Sons, Inc.  New York, 1993.
Timm, Paul R.  Customer Service, Career Success Through Customer Satisfaction.  Prentice Hall, New Jersey 1998. 
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Role of the Supervisor/Manager
 

Customer service within any given company never happens from the bottom up.  The management must lead the way, by both example and training.  First, a manager must understand the “financial potential of customer loyalty.”(Bhote pg. 59)  It is impossible for a company to never loose customers for some reason or another.  To deal with this issue, they should establish a specific and measurable minimum amount of dissatisfied customers.  As an example, they should lose no more than 5% of their customers, in a specific amount of time, due to dissatisfaction and poor treatment.  In conjunction with this goal of maximum customer loss, there should also be an effort on the management’s part to anticipate potential problems, analyze those that have already occurred, and take proactive steps in creating effective customer retention.

It is necessary for companies to create customer service as part of their theme or credo.  Mission statements guide the company, so it is important when creating one that the company makes customer retention a component.  A suggestion for developing an effective service-based mission statement, is to conduct a needs assessment survey.  Talk to potential customers and find out what they are looking for.  Get input from your employees as well.  These are the people who will be working to fulfill the statement and therefore, their input is very valuable.

Another job of an effective manager “…involves determining desired service end results and deciding how and when to achieve service goals.” (Timm, Pg. 126) Creating loyal customers should be reflected in both short and long-term goals, as well as in the mission statement.

Managers are responsible for motivating their employees.  This can be done in a number of ways.  If the manager constantly praises employees when they do a good job, they will be motivated to continue to please their boss as a result of the positive feedback they will and have already received.  Showing approval for employees who continually behave in a customer-friendly manner is another way to show that employee they are performing their job correctly.  Incentives are another way of motivating employees.  The management staff is responsible to lead by example, and should not expect employees to do something that they themselves do not do.  Managers should always be friendly and make a practice of handling problems in the smoothest way possible in order to encourage their employees to do the same thing.  Always keep in mind that happiness on the job is important, and lies largely in the hands of the manager.  Having happy employees goes hand in hand with having happy customers.
 
 
 

5 Steps That the Management Must be Taking in Order toProvide the
Greatest Amount of Customer Service:
                                                                    1. Personal contacts with customers
                                                                    2. Visiting customer-contact employees
                                                                    3. Determining what customer, former customers,
                                                                        and non-customers want
                                                                    4. Feedback from customers on company’s performance
                                                                    5. Recognizing outstanding customer service employees
(Bhote, pg.62)
 
References
Bhote, Keki R.  Beyond Customer Satisfaction to Customer Loyalty, The Key to Greater Profitability.  American Management Association, New York 1996.
Timm, Paul R.  Customer Service, Career Success Through Customer Satisfaction.  Prentice Hall, New Jersey 1998.
Unruh, James A.  Customers Mean Business, Six Steps to Building Relationships That Last.  Addison-Wesley Publishing Co., Inc.  New York 1996.
http://www.synergisticsresearch.com/catalog-3.htm
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Customer Needs
 

Getting to know your customers will help your business understand their needs.  In order to know everything about your customer including, but not limited to, preferences, interests, and satisfaction levels, a significant amount of research must be conducted.  It is a very big mistake for managers of businesses to assume they know what their customers want, this especially happens when they have been in the business for a long time.  In fact the longer one has been in business the less they know about their customers.  Needs and interests change very often and in order to counter this and be able to retain customers, constant research should be conducted.

The most effective way of determining what your customers value, is by listening to them.  A customer comment card is not an effective way to listen.  Instead use focus groups, surveys, exit research, and customer profiles in order to effectively understand your customer expectations.  A business should find out how people view both their own business as well as their competitor’s business. You should also know what they think of your products and services.  Listening to your customers is the best way to gather research on them.  One technique is to spend a little longer on the telephone, when customers call with questions, this will give a personal edge to your business, and help your employees gather information about the type of people interested in their products and services.  Encourage employees to be personable and casual with your customers in person also, they appreciate the attention and it helps you get to know their purchasing and behavioral characteristics, as well as their interests.

When analyzing your needs assessment research it is often helpful to group customers into classifications that share similar interests or attitudes.  Once you determine who your customers are, dividing them into groups is much more practical than attempting to target them on an individual basis.  The common interests that each customer group shares, will then be the predictor of the loyalty and satisfaction that they will display towards your company.  A few examples of classifications that should be examined in order to place customers into segments are: behavioral, attitudinal, and demographic.  Companies can then use this information to study such things as purchase frequency and levels of satisfaction among the members of the different groups, and thus develop a better understanding of who their core customers are.

Once you have determined the needs of your customers, these should be used to guide the organization.  Strategy and goals of the business, marketing programs, employee performance, and operational aspects, are all segments of the business that should reflect the needs and values of the customer.

As a result of conducting customer needs assessment, you will have created a competitive advantage over other businesses.  By being customer-focused, you have sent a strong message to both your customers and your competitor’s customers.  You are not only taking steps to understand your customer, but you have already begun to deliver a personal touch by listening to them and providing what they want.

References
Albrecht, Karl.  Delivering Customer Value, It’s Everyone’s Job.  Productivity Press, Portland, Oregon 1995.
Creating Customer Loyalty.  Manchester Open Learning, Kogan Page Limited, London 1993.
Furlong, Carla B. Marketing For Keeps, Building Your Business by Retaining Your Customers.  John Wiley & Sons, Inc.  New York, 1993.
Goldsmith, Ronald E.  “Customer Relationship Management: Making Hard Decisions with Soft Numbers”  Journal of Leisure Research.  Vol. 29 Issue 3 (1997) Online. ABI-Inform via ProQuest Direct.  Available: http://proquest.umi.com/pqdweb  third Quarter, 1997.
Leuchter, Miriam.  “Meaningful Relationships” Journal of Business Strategy. Vol. 18. Online. ABI-Inform via ProQuest Direct. Available: http://proquest.umi.com/pqdweb?TS
Litvan, Laura M. “Increasing Revenue with Repeat Sales” Nation’s Business. Vol. 84. Online. ABI-Inform via ProQuest Direct. Available: http://proquest.umi.com/pqdweb?TS
Stewart, Mark.  Keep the Right Customers, The Key Steps to Profitable Customer Retention.  The McGraw-Hill Co. London 1996.
Unruh, James A.  Customers Mean Business, Six Steps to Building Relationships That Last.  Addison-Wesley Publishing Co., Inc.  New York 1996.
http://www.smart-marketing.com/questionnaire.html
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Customer Bonding
 

Once you have identified your target market, it is necessary, in essence, to bond with them.  This goes beyond customer service while they are at your place of business instead, bonding should be an ongoing process.

In order to do this effectively you should make it easy for all current and potential customers to access you, your business, and your products.  Creating awareness of your product or service is of the utmost importance, therefore you should try to eliminate anything that may get in the way of this.  First-hand customer contact is a valued asset your business should achieve.  Make yourself assessable, to all people by having important information relative to your business (phone number, web page, e-mail address, location, etc.) readily available.  Make yourself visible within the community in order to remove any and all barriers to effectively reaching your customers.  Customer bonding is actually an important component to marketing your business.

Marketing in relation to customer bonding consists of developing a strategy to encourage and support customer loyalty and retention.   Make sure honesty is always an element when dealing with customers.  Trust and honesty are very important because the absence of them will most certainly result in a lost customer.  It is also necessary to provide service that exceeds the expectations of your customer base.

Another tactic that encourages customer bonding, is to begin the process from the very start.  Involving your customer as early in the start-up process as possible encourages loyalty.  This way, if the customer has been loyal since the beginning of your business, they are less likely to be swayed by competitors.  The key to bonding with your customers is communication.  Keep the lines open and encourage response and interaction on both ends.  Engaging your customers and possibly the community as a whole, as much as possible in such things as activities, decision making, product development, suggestions and improvements, etc. encourages loyalty and satisfaction because they feel involved.  This will encourage customers to identify with your business and will ultimately lead to relationship bonding.

References
Cross, Richard & Janet Smith. Customer Bonding. NTC Business Books, Chicago 1995.
Gordon, Ian.  Relationship Marketing.  John Wiley & Sons Canada, Ltd.  New York, 1998.
Furlong, Carla B. Marketing For Keeps, Building Your Business by Retaining Your Customers.  John Wiley & Sons, Inc.  New York, 1993.
Smith, Janet.  “Customer Bonding”  Executive Excellence. Vol. 15 Issue 4 (1998) Online. ABI-Inform via ProQuest Direct.  Available: http://proquest.umi.com/pqdweb  April, 1998.
http://www2.brightid.com/brightid/bright/relatmktg.html#anchor2030998
http://www.brierley.com/art/intro.asp
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Relationships with Stakeholders
 
 

Owners and managers of new businesses should have a good relationship with their customers and employees as well as with their suppliers.  In fact, managers should treat their suppliers the same as they would their best customers. (Gordon, pg. 261)  Failing to do this is a common mistake made by companies, who do not realize the importance of their suppliers, distributors, dealers, agents, etc.  There are many reasons for forming strong bonds with them, one of which is to recognize and utilize all of the oppportunities, in both products and service, that they provide.  Many companies, especially older ones, have set policies that have not been changed or updated, which often times demands from the suppliers, making them seem arrogant.  Instead, both companies and suppliers can mutually benefit from discussing all options.  Setting up new formats, models, and/or service categories may be necessary to bring your relationship with your supplier to new levels. An example of developing new service techniques using technology can be as simple as implementing a rapid order fulfillment program by your suppliers, this expedites the amount of time your customer must wait, and may also reduce inventory levels. (Gordon, pg. 272)

It is important to remember that your business and your supplier have many interests in common.  One of which is to make money.  In order to increase sales and satisfaction levels of your customers, you must begin by making a commitment to your suppliers.  Determine the level of support each of your suppliers contribute to your overall profit.  Decide which of your suppliers benefit your company the most, and work with them to establish mutual trust and bonding.  Once this is done, formulate a strategic plan to develop and implement new policies to increase profits and satisfaction levels, of which both of you will benefit from.

References
Darrow, Barbara & Moltzen, Edward F. “Vendors, Resellers take Plunge into Customer-Relationship Management” Computer Reseller News.  Issue 803. Online. ABI-Inform via ProQuest Direct. Available: http://proquest.umi.com/pqdweb?TS
Gordon, Ian.  Relationship Marketing.  John Wiley & Sons Canada, Ltd.  New York, 1998.
http://www.davidlavin.com/gordon.html#Top
http://www.impa.demon.co.uk/page1.htm
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Dealing with Dissatisfied Customers
 

 
No matter how effective your customer service is, there will inevitably be customers who are not happy with your products or services.  Making an effort to recover them is still less expensive then recruiting new customers.  Even if your customer base is big enough to deal with the loss of business by one customer, it is still necessary to attempt to satisfy them in order to fulfill your business's reputation of customer value.

It is important to not focus on blame because the issue is not based on who is right or wrong.  Your company should instead, use a problem-solving method to recover the customer.  The first, and most important thing you should do is to listen.  Listen to the customer’s complaints, and no matter how angry or frustrated they are, it is important for you and your employees to remain calm.  Hear them out, without interruptions, and make a concerned effort to accommodate them.  Be understanding, respectful, and empathetic  towards their concerns.  Make sure to apologize, no matter whose mistake it was, sometimes that is all the customer wants to hear.  Make an effort to get the matter straightened out as quickly as possible, to show that you care about making it up to them.

The next important step is to react to the issue.  Offer something extra to show them you care about their business on a personal level and not just a monetary one.  If a product you sell them is faulty, repair it or reimburse them for it.  Go out of your way to prove you are sorry by letting them know that you realize the inconvenience of the problem.

Negotiate, with the customer, an acceptable way to deal with the problem.  Make sure once you find an agreement on how to handle the situation that you follow up on it.  If the mistake was large enough a letter of apology may be necessary.

A majority of problems will be solved by doing this, with no customer loss, but not all of them will be.  If you try your best to satisfy a customer and it does not work, don’t take it personally, that customer may not be the type you want supporting your business.  Learn from your mistakes, and make a conscious effort to not repeat them.  Look at it as an ongoing opportunity to improve your customer service methods.

References
Gordon, Ian.  Relationship Marketing.  John Wiley & Sons Canada, Ltd.  New York, 1998.
Tschohl, John.  Achieving Excellence through Customer Service. Prentice Hall, New Jersey, 1991.
Timm, Paul R.  Customer Service, Career Success Through Customer Satisfaction.  Prentice Hall, New Jersey 1998.
http://www.impa.demon.co.uk/Intro.htm
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By: Kate Wakevainen

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Dept. of Park, Recreation & Tourism Resources