how relationship management works
businesses must establish and maintain good relationships with their business partners and their customers in order to succeed this is done through relationship management relationship management involves strategies to build client support for a business and its offerings and increase brand loyalty building a relationship most often occurs at the customer level but it is valuable between businesses as well building a relationship with clients yields rewards for all parties customers who feel that a company is responsive to their needs likely will continue to use that company s products and services the same principle applies to relationships between businesses put simply business partners are more likely to be loyal when there s a better connection between the two a company s reputation for responsiveness and generous post sales involvement can often stimulate new sales maintaining communication with consumers lets a company identify potential problems before they come to a costly head a business may hire a relationship manager to oversee relationship building or it may combine this function with another marketing or human resources hr role the role of a relationship manager requires analytical and communication skills professionals in smaller firms may handle both consumer and business relations larger companies may employ two different individuals to handle each there are four components to relationship management customer retention loyalty profitability and satisfaction the first measures how many customers are loyal to the company loyalty is measured through repeated sales as well as referrals the third refers to the total profit or loss earned by a company satisfaction is how well received a company s goods and services are by its customers and suppliers types of relationship managementas noted above businesses have different relationship management options available to them based on the subject the first is business to consumer while the other is business to business we ve highlighted the basics of each below business to customer or b2c businesses rely on customer relationship management crm tools to build a solid rapport with their customers crm involves a significant amount of data and sales analysis as it seeks to understand market trends the economic landscape and consumer tastes crm also can include marketing techniques and a post sales support program a crm program typically consists of written media such as sales announcements newsletters and post sale surveys video media communication such as commercials and tutorials ongoing marketing is critical to a business as it is more costly to acquire a new customer than it is to maintain a current customer marketing helps a business to gauge consumers interests and needs and develop campaigns to maintain loyalty business relationship management which is also called b2b management promotes a positive and productive relationship between a company and its business partners as such business to business relationships occur with vendors suppliers distributors and other associates these relationships can also benefit from relationship management brm seeks to build trust solidify rules and expectations and establish boundaries it also can help with dispute resolutions contract negotiations cross sale opportunities and controlling risk for instance companies that have a long standing relationship with their suppliers may be able to negotiate a better price for supplies for quicker delivery and having a good relationship may help increase payment times to them from say 30 to 45 days 