A competitive advantage is one that a firm has over its competitors, allowing it to generate greater sales or margins and also retain more customers than its competition. There can be many types of competitive advantages including the firm’s quality of staff, its cost structure, product and service offerings, distribution network and customer relationship management which we have opted to discuss further.
Relationships are at the core of who we are as humans. As relational beings we need both the personal, the social and in this case the business relations to be fully ourselves. Professionals in business have recognized that the most critical field of competition is how effective they are at developing, maintaining and growing client relationships. It is common for small enterprise owners to get all swamped in their day’s activities because of their need to grow and expand. Small businesses, regardless of the products/services they sell or offer, however, may not realise how critical it is to not only build but also maintain and grow relationships with customers, suppliers/vendors as well as partners in business.
In the past, because of the less developed business processes, relationships were strictly business related and many business owners would only care to talk to customers if they went over in need of a particular product or service. Many still did not care to keep records of who paid them a visit or who bought and used their products. Simply put it was a buy-sell relationship. The downfall for many of these companies is that they did not know how to relate more with clients and the importance of maintaining strong and healthy relationships with customers.
With the business environment getting more competitive as a result of the growing number of competent providers of similar or even better options, trends have changed! As several businesses offer more-or-less products and solutions, more customers now attach emotions to who they buy from more than ever before.
It is no longer viable to have a buy-sell relationship today. Businesses require managing relationships more than ever if they are to stay on top of their game as well as attract and retain more customers than their competitors. The introduction of social media, technology and the development of countless media platforms and CRM software such as Facebook, WhatsApp, LinkedIn, Twitter, Google+ among others all seem to have eased this part for many companies as they help in communicating to and with all forms of stakeholders.
There a number of special benefits associated with building genuine and lasting relationships with clients and it is the basis for maintaining those relationships to develop a competitive advantage. Here are 4 special benefits;
1. It builds loyalty; Customer loyalty is built through constant and personalized communication. Customers/clients are human and desire to be treated as human not as potential business or income sources for your company. Trust based client relationships are built through on a personal touch rather than a business basis. When you put in effort in maintaining client relationships, they will recognize and appreciate that. The customer today, will not come back to you just because you are near them. They will come back to you because of the effort they have seen you put in building the relationship. Customer loyalty matters because it is easier and cheaper selling to already existing customers than selling to new ones. Loyal customers tend to buy more, more frequently.
2. It ensures constant feedback; Client relationships are about giving and receiving feedback from both sides. As an SME interested in maintaining relationships with your clients, whether it’s the customers, suppliers or partners, it doesn’t become a relationship if communication is one sided. Maintaining the relationship is more than just about following up and making calls to clients. Client relationships go way past closing the deal with the prospective clients. It is about contact and engagement. To post on social media is one thing, to engage with the people on social media with a personal touch however, gives your clients more confidence in you as well as your products or services. Engagement is the stage where the firm begins to explore the benefits of a deeper relationship with the client. Such is characterized by initial contacts, discussions, a lot of opinion sharing, ideas and proposals among others. This ensures constant feedback from the client which could be your lead to your next assignment.
Referrals either come from very loyal customers or from very satisfied and happy customers.
The question is, how do you keep your customers satisfied enough to have them refer your business in their circles?
Simple, once there is a relationship built between you and your clients, it is easier for them to remember you as well as your services in their circles whether professional or social. A good relationship however doesn’t mean that we can relax on the quality of services and/or products. It doesn’t hurt to constantly ask and remind your clients for referrals. For more referrals firms should focus on deepening and broadening the relationship, gaining more client contacts across levels of seniority, functions, divisions, and locations.
4. Reduced relationship maintenance costs; maintaining relationships with customers with constant feedback from your clients will quicken the problem solving process and make it easier to identify gaps in the customer’s business. This applies mostly to business consultants. When gaps are identified and dealt with, customer businesses become more profitable, it also means more business (and profitability) for the firm in terms of better deals, more referrals and reduced costs of maintaining such already existing relationships. Clients are easier to manage as the longer the relationship goes on, the lower the account maintenance cost.
Finally, as Kevin Eikenberry, the president of the Kevin Eikenberry Group put it “….If we have any work, we have clients. And one of our most important roles is to maintain and enhance our relationship with them. Preserving those relationships can be good for referrals and future business, as well as making the time spent on the project more enjoyable and satisfying…..”
Maintaining client relationships cannot be ignored simply because of its numerous benefits.
By Sarah Achiro
Sarah recently joined BLEGSCOPE®, as an Intern and has worked as a Marketing Executive for Riham Foods. She has interest in finance, accounting and procurement. You can follow her on twitter >> @achirosarah