Customer Relationship and Businesses

1.How can the success of customer relationship-building activities be evaluated?

There are several methods for gauging and assessing the effectiveness of client relationship-building initiatives. The first is through the close rate, which refers to the number of closed deals compared to those in progress. Every sales team uses close rates as a success measure; however, one must be cognizant that it only encompasses part of the picture. Consequently, companies must use the average deal size as a complementary tool (Mortensen et al., 2019). The average deal size indicates the worth of the closed deals. When customer relationship-building activities are effective, the close rate will increase. The second evaluation tool is the upsell rate. Upselling refers to convincing the customer to spend more than what they planned to spend before. The upsell rate also refers to the number of customers purchasing items they originally did not plan to purchase (Mortensen et al., 2019). An effective customer relationship-building activity should increase the upsell rate by helping the company forecast the leads that are more probable to upgrade or purchase other items. If finding predictors improve the upsell rate, the intervention is effective. Net-new revenue also evaluates the success of customer relationship-building activities. It refers to the time a customer stays new, depending on the company’s business model (Suwunniponth, 2021). Tracking net revenue informs the company of the value of the new customer batch. With the right customer relationship-building activities, a company should see an increase in its net-new revenue. The length of sales in the pipeline stage is also an evaluative measure and refers to the average lead stay in every stage of the company’s pipeline (Rodriguez and Boyer, 2020). The stages refer to the steps in the company’s sale process, and tracking them helps identify bottlenecks in the sales process. Customer relationship-building activities are effective when the deals move faster through every stage (Rodriguez and Boyer, 2020). Overall, effective customer relationship-building activities would result in a positive increase in each of these indicators.

2.What advantage‌‍‍‌‌‍‌‌‌‌‌‍‍‍‌‌‌‌‍s does relationship-building bring to businesses, and why are the various techniques used?

Establishing a working customer relationship is crucial for the business's long-term success. A solid connection based on communication and trust enables the customer to feel more secure and connected with the company. It could thus result in customer retention and increase the company’s repeat purchase rate (Siddiqi, Khan and Sharna, 2018). When customers feel an emotional connection with the brand, they are more likely to keep engaging with the business and its products or services in the future. E-commerce is also on the rise, as enabled by various technological advancements. The pandemic accelerated its popularity as consumers preferred to purchase items online to avoid contracting the disease. With consumers less likely to go to a conventional store, businesses must establish customer relationships online. With deep customer connections, customers will choose one’s brand first when deciding to purchase, as they would prefer to spend minimal time scrolling and lingering in online stores (Gajewska et al., 2019). As a result, they save time when buying products they trust. Customer relationships also make customers feel heard and valued, improving their satisfaction. An excellent example of the benefits of relationship building is Marriott Hotels. The customer relationship in this brand is built with each interaction. Employees are taught to listen to the customer, comprehend their needs, and prevent misunderstanding complaints (Hyken, 2022). As a result, the company delivers top-notch customer experiences that result in a rise in revenue.

References

Gajewska, T. et al., 2019. The impact of the level of customer satisfaction on the quality of e-commerce services. International Journal of Productivity and Performance Management, 69(4), pp. 666–684. https://doi.org/10.1108/ijppm-01-2019-0018.

Hyken, S., 2022. Customer service the Marriott way. https://www.forbes.com/sites/shephyken/2022/07/17/customer-service-the-marriott-way/?sh=76911f527807.

Mortensen, S. et al., 2019. Predicting and defining B2B sales success with machine learning. 2019 Systems and Information Engineering Design Symposium (SIEDS) https://doi.org/10.1109/sieds.2019.8735638.

Rodriguez, M. and Boyer, S., 2020. The impact of mobile customer relationship management (mCRM) on sales collaboration and sales performance.  Journal of Marketing Analytics, 8(3), pp. 137–148. https://doi.org/10.1057/s41270-020-00087-3.

Siddiqi, T., Khan, K.A. and Sharna, S.M., 2018. Impact of customer relationship management on customer loyalty: evidence from Bangladesh’s banking industry. International Journal of Business, Economics and Law, 15(5), pp. 92–101. http://ijbel.com/wp-content/uploads/2018/06/ijbel-239.pdf.

Suwunniponth, W., 2021. Influence of customer relationship management on customer loyalty in hotel services. International Journal of Business Tourism & Applied Sciences, pp. 183–190. http://www.ijbts-journal.com/images/main_1366796758/ZU22_29_%20Wanida%20Suwunniponth.pdf.