You probably have heard that the average business loses around 20% of its customers annually. What you may not know, however, is that this is primarily due to the failure of companies to attend to client relationships.

Strong client relationships are much like any other relationship.

You need to invest your time and resources to build and nurture them over time. A recent study commissioned by Wunderman found that 79% of customers will only buy from companies that prove they understand and care for them.

Strengthening your client relationship can be a smart investment and a cost-effective way to grow your business. Did you know that acquiring a new client can cost up to 25 times more than retaining an existing customer?

Additionally, you will reap rewards in the form of repeat customers and referrals when previous customers give you positive feedback. This is why marketing to existing customers and strengthening client relationships are critical to maintaining business growth.

What Is a Client Relationship Strategy?

A client relationship strategy encompasses all the methods a company uses to engage with its clients and improve the overall customer experience. This includes interacting with them on various platforms, listening to them, and providing solutions to their pain points.

A strong business is built on relations, so it’s vital that you pay attention to how you treat your customers over time. Providing an unparalleled customer experience can go a long way in boosting retention and brand advocacy.

Why Is Client Relationship Management Important?

Client relationship management is the process of streamlining, personalizing, and improving the relationship a business has with its clients.

Think of it as a systematic approach to nurturing and maintaining strong bonds with your customers. Managing client relationships requires businesses to keep track of all available information about their customers, including:

• Demographic information
• Interactions (phone calls, messages, previous discussions, etc.)
• Status (whether they’re a one-time customer, a repeat customer, a prospective client)
• History (How often they interact with your business)

Why is this important?

Keeping a 360 degree view of your customer will help you understand their buying behavior and preferences, which helps create personalized messages and recommendations for them. Businesses that develop healthy, long-term relationships with their clients are more likely to receive repeat business and referrals from those clients.

Additionally, strengthening your client relationships increases retention and sales.

A strong client relationship allows you to anticipate client needs, understand where prospective clients are in the buyer journey and use that data to attend to them in an impactful way that drives conversions and loyalty.

Most importantly, strengthening customer relationships helps to increase customer lifetime value (CLV). The longer the client remains a customer of your business, the greater the value they will provide over the whole period of the relationship. High CLV means each client will bring in more revenue for your business.

Defining Your Client Relationship Strategy

Strong client relationships aren’t built overnight.

It requires time, effort, and a strategic approach to build and nurture relationships that will stand the test of time. Here’s our step-by-step guide you can use to define and plan for the implementation of your client relationship strategy.

Step 1: Define Your Objectives

The overall goal of a client relationship strategy is to build a long-term relationship with your customers to increase lifetime customer value for the business.

Here are common value creating business objectives for client relationship:

• Improve brand perception and customer satisfaction (for example: by asking for feedback and diligently following up on any complaints).
• Increase data collection to have complete client preference profile to personalize communication (for example: capture their birthday to send them a special message that day).
• Maximize conversion when client is browsing or comparing (for example: send them reminders when they haven’t checked out after a few days).
• Maximize the value of their purchases over time.
• Maximize repeat business with client (for example: suggest to renew their order if the product or service has a shelf life).
• Maximize upselling or cross-selling opportunities (for example: by proposing other similar or complementary products or services).
• Minimize client churn (for example: re-engage them regularly to remain top of mind).

You might have different objectives for different customer segments and you might want to prioritize some objectives over others. What matters the most is that you’re intentional with your client relationship strategy. This will enable your teams to focus on taking against specific goals, and enable you to monitor the right metric to track progress and the results of your strategy.

Step 2: Make an Inventory of Your Customer Segments

Not all customers are equal when it comes to business value. One time price driven buyers are harder to nurture and re-engage than loyal customers that have been with you for years.

If it’s not already the case, make sure you segment your customer database according to criteria that matter not only for the value they have brought to the company (money they’ve spent, products they bought, etc.) but also for the value they will bring in the future based on your business objectives.

Depending on your products and services, you could segment your customers in terms of loyalty, predisposition to purchase in a given timeframe, duration of their loyalty, average transaction value, etc.

The number of customer segments will depend on your business complexity but you don’t want to have so many that their sizes are too small (except perhaps for the VIP segment) or that have too many criteria that your teams might feel overwhelmed and not know which one to prioritize.

Having clearly defined customer segments will enable you to prioritize and assign them specific business goals that will maximize business value. You will then be able to design action plans according to these goals and to the specific needs and predisposition of those customers.

Step 3: Define the Optimal Engagement Journey for Your Customer Segments

Establishing an engagement journey is the next step in developing a customer relationship strategy that enables you to assess how you currently support your customer segments to increase engagement and drive more transactions.

A customer engagement journey should map all the touchpoints a customer segment has with your brand along the different stages of their interactions with your platforms.

To design optimal engagement journeys, you must first start by understanding what the current journey looks like:

• What are the current touchpoints your customers have with your communication channels (website, social media, online chat, customer service, sales representative, online self-serve services, etc.)?
• What current touchpoints enable your customer to journey from Awareness, to Familiarity, to Consideration along your marketing funnel with ease and the right level of information?
• What current touchpoints follow a progression path along the buyer journey: discovery => consideration => evaluation => decision but providing the right content and tool to enable them to purchase your products or services?
• What current touchpoints follow a progression path from when they purchase to when they use your products and services? Depending on the complexity of your products and services, you might consider the following progression steps: contract initiation, product or service onboarding, product or service adoption, and product or service experience feedback.
• What touchpoints provide one-way vs. two-way communication between the customer and your platforms?
• What touchpoints trigger follow-up messaging to re-engage customers when they fall off the journey path?
• Do you measure the performance of the interactions at each touchpoint and are some better performing than others?

It is possible that you have never mapped your customer engagement journey this way before, or you might have mapped it for all customers and not considered segmenting and adapting the journey to different types of customers. Regardless of previous mapping, assessing the current journey will often provide insights on the gaps between the current state and optimal engagement state.

After assessing your current state of engagement journeys you might want to look at the opportunities that each of your customer segments offers in terms of increasing revenue, brand advocacy, or customer satisfaction, and then design a journey that will enable your customer to have an improved experience that will benefit your bottom line.

Does a given segment need to become more familiar with new products and services to generate new transactions from existing customers? If so, what is the journey across all available and relevant channels for that segment to fulfill that business goal?

Do you experience an increased churn from your loyal customers who when they come back to your website, fill in their shopping cart but don’t complete the transaction? If so, is there any incentive you could send them by email the next day to remind them of their unfulfilled shopping cart and get them to buy on your site rather than on a competitor’s?

You don’t always have to design the full customer journey which can take time and resources, rather pinpoints to the most important business goal you want to achieve for a given customer segment and design an optimal journey that addresses that particular part of the journey.

Step 4: Assess Marketing Capabilities Strengths and Weaknesses

Conducting a SWOT (Strengths Weakness Opportunities Threats) analysis will help you assess the robustness of your client relationship technological ecosystem. You can skip reviewing opportunities and threats as they might not provide as valuable insights in this assessment.

Ideally, you’ll want to determine the strengths and weaknesses of your:

• Customer’s data sources

– Are your data sources easy to access?
– Do you have tools to aggregate all existing data sources to have a 360 degrees view of your customers?
– How rich is your data about your customers (demographic, geographic, purchase habits, channel preferences, feedback, etc.)?

• Channel marketing operations

– Are your teams at capacity to effectively manage each of your marketing channels?
– What is the effectiveness of your channel operations in terms of time to market and content diversity?
– Are your teams properly coordinated when managing multiple channels to provide an omnichannel experience to your customers?
– Do you have analysts who monitor channel performance and provide actionable improvement insights?
– What is the skill level of your operational teams (novice, intermediate, or expert)?

• Performance measuring tools

– Are you set up to track engagement and conversion on every marketing channel you use?
– Do you have dashboards that provide aggregated views of multichannel performance and campaign specific performance?
– Are your sales tracking tools integrated with your channel performance to measure channel performance?

• Marketing tools

– Do you have all the marketing tools you need to operationalize and automated messaging on your various marketing channels?
– How integrated are your marketing tools (i.e., are they connected one to another)?
– Are you using all the capabilities of the marketing tools you possess, or just the basic level of functionality?

You might also want to assess the availability of budget to purchase new tools, develop new capabilities, or integrate systems which could boost or hinder your ability to deploy your strategy.

Evaluating your existing marketing capabilities’ strengths and weaknesses will enable you to spot areas you can lean on to accelerate implementing your strategy, and where you’ll need to invest which might take some time to fully leverage.

Step 5: Define Your Action Plan

The last step in developing a client relationship strategy is to define your action plan.

At this point, you already have your strategy objectives, a list of prioritized customer segments, clearly defined client engagement journeys for these segments, and insights into the strengths and weaknesses of your marketing capabilities. Now all you need to do is lay down or define an action plan that will maximize business outcomes for each high potential customer segment as well as develop the platform that will enable you to efficiently execute on the required tactics.

Your action plan should start with your prioritized customer segments, the journeys you want to optimize for them to produce the most value, and the capabilities you need across relevant channels to keep them engaged and convert the relationship into sales.

Once you’ve mapped your action plan for each segment, you’ll be able to spot similar capability requirements, and if these are related to the software platforms, you could then prioritize investments in those products (purchase, training of staff, customization and integration).

As you look at different technological solutions, you might want to find a handful of platforms that enable you to integrate with them easily, and are simple for your team to use, which offer reporting capabilities for you to measure the return on investment of your client relationship strategy.