The importance of transparency in maintaining customer relationships

If you asked a group of CEOs or other business leaders about the importance of customer relationships, most would agree that building those connections has a tangible impact on customer retention and sales. However, not nearly enough leaders know how to stoke the flames of these relationships once they’re ignited. With the challenges of instilling warmth and empathy in a remote setting — and with growing concerns about an impending recession — it’s time for business leaders to think more strategically about not only building new relationships, but also doing the work to maintain existing relationships.

Will Erlandson, chief growth officer at Relevance, a specialty growth marketing firm based in Columbia, Missouri, has spent a lot of time pondering this challenge. In a recent conversation, a customer complained that a service provider kept changing their metrics reports to show what looked good – limiting the customer’s ability to compare the same metrics month-to-month.

The customer, Erlandson explains, saw through the provider’s move. It seemed like a blatant attempt to pick data and only highlight what worked successfully. For Erlandson, this conversation reinforced one of his core tenets of nurturing customer relationships. “I think to be a good partner you have to be willing to look at uncomfortable truths together to solve problems,” he says.

Erlandson is quick to point out that it’s easy to see why a company chooses to report only profits and no losses. After all, everyone wants their customers to be happy. A helpful strategy, especially in an agency environment, is to make expectations as transparent as possible. This helps avoid the need for such cherry picking across the board. “A lot of the risk management happens upfront, when you go through the contract,” he says. “A key question is, ‘What happens if we don’t get the results you say we will get?’ One of the things I do in each of our contracts is to write a detailed statement of objectives. Then I write down, or at least verbally address, some common obstacles to that – and some of these are within our control.”

Erlandson is typically conservative when giving client estimates, carefully setting expectations so as not to over-promise. “I want us to have a high probability of success — like a 90%+ chance — but I’d rather over-deliver. So if there’s only a 50/50 chance, either because it’s a very ambitious goal or because resource sourcing isn’t dependent on how ambitious the goal is, I’ll just be honest with them and say, ‘Hey, we work here with a more limited budget. And we can still pursue whatever we want, but we’re going with a roughly 50/50 odds.’” Erlandson also tries to avoid the word “guarantee,” saying if you use that word, be very careful .

These types of “awkward” conversations—ones that openly address questions like what happens if the strategy doesn’t work, or what next steps to take if goals aren’t met—are helpful to both the vendor and the customer Convince customers same page. “We both have to respond to each other,” says Erlandson. He also stresses the importance of recognizing not only routine, frequent setbacks, but also the risk of “force majeure”-type events such as the disruptive arrival of a giant like Amazon in an industry. These events should first be discussed as hypotheses and again whether they actually occur. “You have to be ready to face whatever happens,” he says. “You have to be able to deal with it realistically and then work together to overcome whatever you can overcome. Change strategy. If it doesn’t seem like you can get over it, you need to address it directly with the customer instead of just trying to extend the customer relationship and collect a fee for the next six months.”

Erlandson says companies should ultimately try to be a “boy scout” for customers, helping them create long-term strategies to eventually own their industry. In the current landscape, this also includes dealing with customers’ uncertainty in relation to global events, fears of recession and changes in their competitive environment. It’s important to recognize that this uncertainty can put additional strain on even strong customer relationships. “At my company, the focus of these discussions was on being a good partner,” he says.

Recently, customers have come to Erlandson because they fear other suppliers will increase their costs; Understandably, they’re wondering if they’ll have to work their way through on lower margins, including potentially cutting back on their work with agencies like Relevance. Erlandson offers a compromise on this. “I’m going to say, ‘Hey, since you’re making some tough decisions right now and you’re considering cutting vendors, what if we reduced scope by the end of the year? And then let’s assess the progress and decide what to do from there,'” he says. “The wrong way to do that would be if they come and say, ‘Hey, I’ve got some tough calls to make I’m thinking about downsizing your agency,’ and then this agency says, ‘What? No, you can, ‘don’t do that.’ Obviously they can. But trying to empathize and see things from their perspective – I think that’s part of facing the truth.” The importance of transparency in maintaining customer relationships

Rick Schindler

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