The Customer Relationship block of a Business Model is intrinsically dependent on the first block developed, Customer Segments. This is because this component deals exactly with the type of relationship that the company will establish with each of the previously defined segments.
This block will determine the nature of each of the relationships and will have a major impact on the overall customer experience and consequently on their degree of satisfaction and brand loyalty.
Follow with us the role and importance of Customer Relationship in the development of the Business Model Canvas.
Contents
Motivations for Customer Relationships
The relationships with each customer segment can vary widely, including personal and automated versions. However, in short, they can be guided by three main motivations:
-
Customer acquisition
The acquisition a new customer involves persuading that person to choose your product or brand over other companies available in the market. The strategies employed at this stage are evaluated by measuring the cost of achievement in relation to the value that the consumer offers to the organization. The most frequently used tactics include:
Content Marketing: This is a very useful alternative, especially for entrepreneurs with limited resources. Extremely effective but requires knowledge and intelligence in use.
It is based on the application of what we call SEO (Search Engine Optimization), which improves the ranking of a page or website in the search engines, according to the quality of the content offered.
E-mail marketing: it works especially if associated with content marketing and SEO. By signing up to receive information from your company, you gain access to a potential customer without having to invest in a sales force, for example.
Social Media Marketing: Social media has gained ample space in marketing, snatching much of the public from television or print media, for example.
However, the marketing work performed on that vehicle cannot be restricted to the promotion and promotion of products. It is, in the end, a “social” space, therefore, it requires a focus on the relationship itself, not just “exposure”.
-
Customer retention
It is the long-term relationship between the company – or the brand – and the customer. It covers the strategies employed in consumer loyalty, which will cause one customer to bring another or consume more than once. Some techniques applied:
Defending a point of view: customers are often more loyal to brands with whose voices they identify. The brand represents an idea, which they like to imitate. Select an idea consistent with what your brand stands for.
Invoking the ego: customers tend to want a product that reflects their positive qualities. If your brand improves their social position, for example, it will be more attractive to the consumer.
For this, you need to discover the desires of your customer, to be able to connect with them, and show how your product is the extension of themselves. This is one of the reasons for customer segmentation.
Reducing pain: if your product in fact solves a problem for the customer, you will tend to keep it as a customer for longer. And there will also be a greater chance that this person will “sell” your brand to others who have the same pain.
Offering extra benefits: it’s a way to impress the customer and keep them loyal. Offering discounts, gifts, and free returns are examples of low-cost benefits to the company and well-liked by consumers.
Making personal: providing personalized services increases your chances of loyalty. The same thing happens when an employee spends their time with the client. In both cases, the customer feels “special” and creates a bond with the brand, because they think that the company knows them.
More than that, the human being is competitive by nature. If you turn your consumer into a VIP one, with some advantage over others, you will have a greater guarantee of their interest.
Maintaining quality: unlike many brands think, the consumer continues to prefer quality over quantity or speed. Sustaining the quality of your product or service will always be the most successful way to value and retain your customer.
Choosing the communication channel: another reason why the blocks before this one, such as Customer Segments and Distribution Channels are essential. It is important to get to know your consumer and know their favorite communication channel. By using the right channel, you have a greater presence in the mind of your client.
-
Sales Expansion
The focus here is to convince the customer to buy more products from your company. Not only coming back to buy from you on another occasion but buying more things at the same time, which match together. It’s like offering the combo of soda and fries or a protection case in the acquisition of the smartphone.
To successfully expand sales, you need to know your customer segments very well, including their preferences, social aspirations, demands, and fears. This way, you will be able to know what interests your consumer audience.
Customer Relationship Categories
There are several customer relationship categories, but we can highlight six main ones, which cover most. They can act individually or coexist within the block. They are:
- Personal assistance: it is based on human interaction, that is, on communication between the client and a representative, who assists him/her until the purchase process is complete. It happens at the point of sale, but also by phone or email, for example.
- Dedicated personal assistance: this is when you offer individualized personal assistance, that is, you dedicate a specific representative to a particular customer.
It is a deeper relationship, usually for a longer period of time. A good example is when managers have more personalized relationships with higher-value customers. - Self-service: There is no personal relationship between the company and the customer. The company only provides the tools and resources for the customer to serve. This is a good measure of cost reduction, including the final price of the product.
- Automated services: this is a kind of self-service, but more sophisticated since it counts on machinery and automated processes. They are often very personalized and create customer profiles based on their online behavior and purchases. It’s like a mix of personal assistance and self-service.
- Communities: they are a way for the company to engage its customers – current and potential – by promoting connections between people through social media.
The brand creates a close relationship with consumers, but more than that, it encourages the formation of bonds between themselves. In this way, users exchange knowledge and help solve each other’s problems, becoming part of “something bigger”. - Co-creation: this is when the company involves the customer in creating the final product. Customers can give their opinion, write about it, help design, and collaborate on new projects. One of the greatest examples of co-creation is the YouTube platform, whose content depends entirely on its users.
Note that Customer Relationship is one of the core blocks of the Business Model. It can mean the success or the ruin of your venture. Therefore, work hard on the previous blocks, to develop this process successfully and thus be able to move to the next blocks with greater safety and resourcefulness.
TAKE ME TO THE NEXT BLOCK -> REVENUE STREAMS