4 Ways to Measure the Effectiveness of Your Customer Relationship Programs.

Strong customer relationships are like money in the bank, literally.

Our world is constantly changing, big box retailers like Wal-Mart and Home Depot are dominating the landscape, promoting the promise of “one-stop shopping”, and the Internet is making it easier to make online purchases with limited human interaction. On the surface, these changes make it seem as though the customer is only concerned about swiftly making their product selections and racing to the check-out counter as quickly as possible.

Reality says that buyers are concerned about a lot more than one-stop shopping, speed of check-out and price. One of the other major deciding factors buyers are using to make a decision about what to buy and from whom is based on a dying art customer relationships.

How many times have you gone out of your way to make a purchase of an item because you valued the relationship with the company? How many times have you paid a higher price because the sales associate made you feel like you were important? How many times have you delayed purchasing an item because you placed more of a premium on the reputation of the company or product than on the fact that you could get a lower quality item cheaper or faster?

As more and more businesses continue to look for ways to cut costs, one of the key areas that is getting hit are long-term customer relationship programs, because companies don’t know how to effectively measure the good will and value of good customer relationships.

Below I have listed 4 key metrics your organization can use to help you better evaluate how well your customer relationship programs are working.

1) Percentage of Revenue from Repeat Business –

“¢ This metric is important because customers who value their relationship with you tend to offer a steady volume of repeat business, which provides the funds your organization needs to invest in R&D and/or expand into new markets or territories.

2) Percent Increase in Revenue From Sales of New Products/Services to Existing Customers

“¢ This metric helps you get a better view of how effective you are at winning Up-sell/ Cross-Sell Opportunities.
“¢ Customers who feel you value their business tend to increase their level of trust in your company which increases their desire to shift more of their buying dollars to the other products/services you offer.
“¢ By delivering great service and building strong value, clients want to maintain relationships with your company because it is becoming increasingly difficult to find good service because so many organizations are becoming more and more focused on what I call the “sterile basics”, which are better product, lower price, faster delivery.

3) Percent of Referrals From Existing Customers

“¢ This is a great metric because it clearly shows how much your customers value your services.
“¢ Great customer relationships can lead to lots of referrals. Customers that feel they receive a lot of value from your products/services and great on-going service not only want to do business with your company but also want their friends to do business with you too.
“¢ Many times their excitement over finding a great supplier is so contagious they become your greatest champions, which is one of the highest complements a customer can give you.

4) Number of Non-Competitive Sales Won with Existing Customers

“¢ This metric shows your Competitive Advantage and how strong your relationships are over your competitors. The goal is to increase the number of times the clients buy from you without ever looking at the competition.

“¢ Developing a strong relationship orientation within your business is like building a competitive fortress around your customers. This simple shift in how you view your customers will help you stay “tuned-in” to their wants and needs and allow you to add more value to your client relationships. And by adding value in everything you do, you show your customers you care and you are in effect raising the bar on your competitors who only offer the “sterile basics.”

Hopefully these metrics will help you improve your ability measure the effectiveness of your ling-term customer relationship programs, because when customers get the feeling your company is only interested in the sales transaction they’ll start to take their business elsewhere.


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