Strategy and Relationship Management Areas

Your Customer Relationship Management (CRM) system is the beating heart of your business. But your CRM is only as good as the information you feed it and the decisions you make about how to use that data. A CRM strategy is a comprehensive plan that includes data collection and management, customer engagement, sales and marketing efforts, customer service, and continuous improvement. The goal of a CRM strategy is to understand your customers and prospects, so that your organization can attract the right prospects, improve customer retention and customer loyalty, and ultimately increase revenue and profitability.

Whether you’re a Business Relationship Manager or a leader in your organization looking to mature your business relationship management practices, a strategic approach is critical to ensure your efforts make an impact where it matters most. Investopedia defines business relationship management as promoting ‘a positive and productive relationship between a company and its business partners’.

Like other types of relationship management, the process for managing business relationships typically involves:

• Creating a strategy that includes your goals and objectives for relationship building
• Identifying who (the people in specific organizations) you want to build business relationships with
• Analyzing your existing relationships and identifying any gaps
• Actively building and managing relationships through communication, meetings, feedback, and more
• Tracking your relationships
• Measuring and reporting on your results
• Going back to the beginning of the process to adjust your strategy and relationship management activities to ensure continual improvement

Before we get into more details on potential strategies you might use, let’s take a closer look at why this process is so important…

Why Strategic Relationships in Business Matter

There’s a lot of work involved in strategically building and managing business relationships. But the alternative option - leaving your relationships on autopilot - would mean leaving more opportunities on the table, while increasing your risk.

That’s because a strategic approach to business relationships will often lead to:

• More relationships with the right people - and relationships that go deeper and last longer
• Stronger commitment and loyalty on both sides
• Improved communication and negotiation
• Greater transparency and mutual understanding
• Faster response times
• Improved collaboration and innovation
• More information sharing
• Reduced risk and greater social acceptance
• Improved work culture, leading to happier staff and lower employee turnover
• Greater agility and responsiveness to change
• Increased value, business growth, market share, and competitiveness
• Streamlined processes, leading to improved efficiency and effectiveness

With so many potential benefits, businesses can’t afford to not be strategic with their relationships.

Key Areas of a CRM Strategy

A CRM strategy is a comprehensive plan that includes several key areas:

Customer Data Management

Central to any CRM strategy is customer data collection, storage, and management.

Customer Segmentation

A CRM strategy involves organizing customers into segments based on various criteria, such as demographics, purchase behavior, or location.

Sales and Marketing Alignment

Effective CRM strategies often involve aligning the efforts of sales and marketing teams. CRM systems can help track leads, nurture prospects, and manage the sales pipeline.

Customer Service and Support

CRM strategies include processes for handling customer inquiries, complaints, and support requests efficiently and effectively.

Selecting the Right CRM System

A good CRM strategy starts with selecting the right CRM system for your business. There are many different CRM tools available, all with various functionalities and price points.

Ease of Use

A user-friendly interface is essential to encourage adoption among your team. Look for an intuitive CRM tool that doesn’t require extensive training for your colleagues to get started.

Scalability

Choose a CRM solution that can grow with your business.

Cost and ROI

Evaluate the total cost of your CRM, including subscription fees, setup costs, and any additional costs for training, support, customization, or integrations.

Customer Support and Training

Assess the level of customer support and training options the CRM provider offers.

Steps to Create Your Business Relationship Strategy

A good starting place for building strategic relationships is to create a written plan and strategy that you can follow. This four-step process covers the key aspects to include in your plan.

Step 1: Define Your Objectives

Firms that leverage the structure of their business relationships by aligning them with business strategy can improve relationship and business performance. This means that it’s important to align your relationship management strategy with your broader business goals and vision.

Consider…

• What do you need to achieve in the business?
• How do you anticipate that working on your business relationships will contribute?
• What outcomes would you like to see in 3 months, 6 months, a year, or more?

Some examples of objectives or goals include:

• Aiming for 80% positive sentiment from tracked relationships by the end of the year
• Increasing your number of business relationships by 10% next quarter
• Expanding your average number of touchpoints with key business relationships from three to five per month
• Building connections with at least two people at each organization you’re partnered with
• Facilitating a smooth launch of a new product or service, thanks to the support of key business partners

If possible, make your goals SMART (specific, measurable, achievable, relevant, and time-bound) to help you focus your efforts.

Step 2: Assess Your Situation

Take a pulse on your existing relationships with business stakeholders. Analyze your list of business stakeholders and identify any strengths, weaknesses, and gaps.

Consider:

• Who are you already connected to?
• Who would you like to be connected to?
• Who might you want to build a relationship with now to start getting ready for projects that are still to come?

If you haven’t already, you might like to check out our guides on stakeholder analysis, stakeholder mapping, and relationship network mapping. These guides cover various tools and techniques you can use to better understand your stakeholders, relationships, and situation.

Step 3: Define Your Relationship Building Activities

The previous two steps were all about giving you direction and a firm foundation to build on. Now it’s time to take strategic action in a way that builds and strengthens your relationships.

The actions you take here will depend on what’s relevant and appropriate for your organization and the relationships you’re building. But here are some potential actions and strategies to consider…

• Focus on trust: Ideally, your relationships should be built on trust, so it’s critical to ensure that you and your organization are trustworthy. This means do what you say you will do, don’t promise something unless you are certain you can deliver on it, and always act in alignment with your values. The more consistently you do these things, the more others will trust you, and the more effectively you will strengthen your business relationships.
• Divide and conquer: Many organizations benefit from segmenting their relationships in order to tailor their approach. You’ll more effectively build and maintain relationships if you reach each person with the message and methods most suited to them. For instance, CFOs will likely be more interested in learning about pricing, billing, and ROI, but a COO might want to know about timing, systems, and reliability. Meanwhile, you might communicate with warehouse managers and logistics officers about issues like product handling and delivery schedules.
• Visualize your networks: Map your network of relationships to discover opportunities for strengthening your existing relationships and building new ones, as well as connecting people you know. This can be a great opportunity to build social capital for yourself and others.
• Increase your touchpoints: You can actively build and manage your relationships by increasing your touchpoints with key contacts. Each touchpoint works together to build your relationship and keep it top of mind.
• Become a resource to others: Make sure that your relationship is mutually beneficial and not just one-sided. Share knowledge, support, advice, and introductions where appropriate to ensure you add as much value to the relationship as you receive from it (or more).
• Focus on the individual: Deloitte suggests that in order for leaders to deepen their relationships, they should start with the individual and identify what matters most to them, before expanding to their impact on their family and organization, and then finally, moving onto the organization. They also suggest suspending self-interest and focusing on the other person’s point of view. So, although you’re taking a strategic approach to relationship management - remember that at the end of the day, you’re dealing with people, not numbers or another cog in the machine. Try to see each individual as they are and tailor your approach to their needs, interests, and perspectives.
• Keep things stable: It’s worth pointing out that your broader business activities will have an impact on your relationships, too. For instance, too many strategic changes can lead to less stable business relationships, and this, in turn, can negatively impact performance. So, if possible, keep things stable for your business relationships - and make an effort to manage your relationships more carefully through any change that’s unavoidable.
• Engagement over management: Rather than seeing your key relationships as people or resources you need to manage, consider taking more of a stakeholder engagement approach. This could mean going out of your way to seek feedback, participation, and input - and allowing them to impact your business decisions and outcomes.
• Good grievance management: Managing complaints and grievances is an important part of business relationship management. A good grievance management process will usually involve careful recordkeeping, acknowledgement, investigation, and resolution - all within a reasonable timeframe.

Step 4: Track, Measure, Adjust

Finally, measuring and tracking relationships isn’t an easy task, but it is an important one. Relationship management is usually an ongoing process - so it’s a good idea to set a regular schedule to measure and report on your results. That way, you can adjust your strategy and relationship management activities to ensure continual improvement.

Consider…

• How do you value a relationship and what happens within it?
• Is it the potential monetary value that the relationship could contribute?
• Is it the knowledge or additional networks you can tap into via the relationship?
• Or is it the length of the relationship, degree of trust, or depth of partnership?

Make sure you track your relationships, along with whatever metrics matter for your relationship management strategy. From there, you can measure your results, determine whether you’ve been successful, report on the outcomes, and make adjustments.

Key Steps for CRM Personalization

To effectively personalize your CRM strategy, consider the following steps:

1. Set Your Objectives: Start by clarifying your specific objectives for CRM strategy. What do you want to achieve?
2. Segment Your Customer Base: Identify different customer segments based on demographics, behaviors, preferences, and needs.
3. Develop Your Personalization Strategies: Develop the specific personalization strategies you will implement.
4. Automate Your Personalization Strategies: Utilize automation tools within your CRM system to deliver real-time personalized messages and recommendations.
5. Monitor and Measure Your Results: Regularly monitor key performance indicators (KPIs) related to your CRM personalization strategy.
6. A/B Testing and Optimization: Continuously test and refine your personalization efforts. Use A/B testing to compare the performance of personalized content or offers against non-personalized versions.
7. Train Your Team: Ignore this step at your peril. Ensure your team is trained in using the CRM system and effectively implementing personalization strategies. A considered approach to training will encourage a customer-centric culture within your organization.

This will depend entirely on your business, customer base, and how proactive your campaign is. You may see immediate results, or trends could take a while to emerge.

Types of CRMs for Different Relationship Management Techniques

Customer Relationship Management (CRM) systems are crucial for effective relationship management. They help organize, automate, and synchronize all facets of customer interaction. Here are some types of CRMs used for different relationship management techniques:

What Does a Relationship Manager Do?

A relationship manager is at the forefront of fostering these important client relationships.

1. Relationship managers are primarily responsible for building strong, enduring relationships with clients.
2. A key part of a relationship manager’s job is to ensure that any issues clients face are resolved swiftly and efficiently. For instance, if a client is dissatisfied with the performance of their investments, the relationship manager would step in to analyze what went wrong, discuss alternative options, and adjust the financial strategy accordingly.
3. Relationship managers provide clients with strategic advice that enhances the value they receive from their investments or services. In the context of wealth management, this might involve suggesting diversification strategies, discussing new investment opportunities, or advising on tax implications.
4. Effective networking is another vital responsibility. Moreover, by attending industry events, seminars, and other networking functions, relationship managers can attract new clients to their bank. This not only helps in retaining existing clients by enhancing their experience and offering more value, but also in expanding the client base through referrals and new introductions.

An excellent relationship management example in action could be seen during the 2008 financial crisis. Relationship managers at top banks had to work diligently with their clients to navigate the tumultuous markets. This might have involved restructuring their portfolios, providing frequent updates on market conditions, and offering reassurances based on deep financial knowledge, thus helping clients make informed decisions during uncertain times.

A study by Bain & Company shows that a 5% increase in customer retention can result in a profit increase between 25% and 95%. Relationship management is an indispensable part of modern business strategy.

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