The 5 Distinct Customer Relationship Strategies
As technology continues to offer new modes of communication, customer expectations and the ways in which companies consider their relationships with customers are changing too. If a firm wants to grow, it must develop self-awareness regarding the strategies it is employing. And while not all companies will succeed using the same strategy, and methods that might be appropriate for one company might not work for another, it's always important to keep your customers in mind.
To help companies better understand their unique customer relationship strategies, Dave Frankland, managing partner at Customer Helix, a consulting firm that specializes in optimizing customer relationships, came up with five distinct categories. To glean more insight about how each strategy played out in the real world, Frankland talked to 200 customer-focused professionals—employees who held manager-level positions or higher at firms with greater than $500 million in annual revenue. The respondents came from various industries, including banking and financial services, consumer packaged goods manufacturing, and retail, and were responsible for customer relationships and service. He presented his findings to a packed crowd at last year's CRM Evolution conference in New York. Read on to find out which of these strategies is best suited for your company—and your customers.
In Frankland's first strategy, companies pay little attention to consumers, choosing instead to focus on making their products available for purchase. Historically, Frankland says, the most prominent adopters of this strategy have been consumer packaged goods (CPG) and pharmaceutical companies. These non–consumer-focused companies "never had a direct relationship with a consumer [but rather] had a direct relationship with the retailer, who had a direct relationship with the consumer," Frankland explains. Think of a hypothetical company that sells butter. Though a customer can most likely count on finding the butter in a store, he will not typically have much of a relationship with the company that packages it.
Of the five, this strategy allows for the greatest disconnect between consumers and firms. When such companies capture customer data, they usually won't use it to learn much about the customer; they're more interested in the data insofar as it will affect issues such as product development or pricing.
This may come as a surprise, but a whopping 31 percent of the companies represented by those surveyed by Frankland are currently using this method. The good news is that many are moving away from this model. Some companies have been able to flourish with minimal relationships with consumers, but even the most non–consumer-focused brands have moved toward building direct relationships with them. Typically, they do this by taking advantage of the opportunities that come with technology.
"We're seeing, largely through digital channels, more and more CPG firms really invest in customer relationships," Frankland says. Kraft, for instance, has begun to employ experience-related tactics to satisfy its customers, making its Web sites more interactive and accessible by offering recipe-building features. Similarly, General Mills has been making use of YouTube videos to attract users interactively. In recent years, Frankland says, Procter & Gamble and Pampers have become more concerned with providing additional value to the consumer by offering parenting advice and medical information.
One thing to keep in mind, however, is that even an apparent nonrelationship is a form of contact. Denis Pombriant, managing principal of Beagle Research, points out that although the relationship with the customer might be understated under this model, there is still an
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