How to Perform Effective Client Relationship Management, Including Tips from Experts

Client relationship management refers to the work that an organization does to coordinate its interactions with clients and potential clients. To leverage your CRM in order to increase profits, incorporate data analysis that helps you understand and improve these relationships.

Client relationship management is critical to the ongoing success of your organization — if you can’t retain existing clients, you’re destined to fail. To learn more about client retention, visit “Expert Advice for Effective Client Retention Management.” You can learn more about best practices and expert advice on how to set up a system to effectively manage clients and maintain good relationships from out article "Tips and Best Practices for Mastering Client Management".

Below are some additional reasons why client relationship management is essential to your success and survival:

• It’s Not a Choice: 
  
  “One of the most important things to realize is that client management isn’t an option,” says Michael Levin, motivational speaker and President of Custom Solutions, Inc., a California-based business consultancy. “It’s a necessity.”
• It Can Grow Your Organization When Done Properly, or Harm Your Organization When Done Poorly: Engaging in good client relationship management practices builds positive relationships, which can increase client retention and new business. Conversely, managing client relationships poorly can have an immensely harmful effect, as word of mouth spreads about your organization’s inattentiveness.
• It’s Especially Important for Small Businesses: Good client relationship management is especially important for a small business, as it needs to retain as many clients as possible and be as efficient as possible while building its business.

Effective client relationship management is more than simply telling workers they should maintain good relationships with clients: It’s about setting up a strong CRM structure and process within your organization and training your team to follow that structure and process.

That structure and process will likely include an overview of how your organization is going to track and monitor your relationships with clients, and that overview might include software services. Your organization should also set overall goals for its structure and process; these goals should guide all of your employees, even during staff and leadership changes.

“People who set up the process may leave, but the process will never leave you,” says Netomi’s Max.

Some companies even train specific departments in social psychology to help bolster customer relationships. Harley Davidson Motorcycles, for example, has sent employees on the road with brand enthusiasts in order to help build relationships.

Organizations use a range of techniques and practices to manage client relationships effectively. In order to establish trust, companies focus on useful information tracking regarding client relationships.

Here are some important processes and techniques that can help an organization manage its client relationships effectively:

• Perform Ongoing Client Relationship Marketing: Relationship marketing focuses on customized ways that you can reach out to current and former customers in order to offer help and remind them of your organization’s value. The organizational staff member who first brought a customer to your organization can send a personalized email. Or, your CEO might distribute a regular newsletter with tips and guidance. All client relationship management should be attuned to customer loyalty. But, client relationship marketing is even more focused on developing relationships and trust that encourage loyalty and drive repeat business.
• Engage in Relationship Marketing: 
  • These efforts work especially well with service businesses, where your company has an opportunity to create a direct and ongoing relationship with a client, who will then grow to trust your work.
  • This type of engagement has the potential to generate a large return on investment, as your company is able to drum up new business simply by doing good work and building strong relationships on a current job.
  • This kind of marketing encourages great word-of-mouth advertising, which is the best and most trusted kind of advertising.
     
    
    
    “Word of mouth is everything,” says Justin Butlion, a business analytics consultant and Founder of ProjectBI, which provides information and advice for using business analytics and data. Butlion says that a potential 50 percent of business can come from recommendations by current customers or clients. “Our attention span is limited. We get to the point where we’re really blind to most advertising. We don’t trust advertising. We trust our community — that is, people.”
  • Engaging in relationship marketing can lead to positive online reviews from your current customers, which also lead to new business.
• Understand What You Want and Can Expect from the Relationship:
  
  “From the moment you reach out to a particular stakeholder or client, you have a responsibility to define, create, and form that relationship,” says Brian Zotti, Senior Vice President of Services and Operations at Contek Consulting LLC, a business strategy consultancy.
• Manage Expectations:
  • Underpromise and Overdeliver: Don’t put yourself in a situation where you can’t keep a promise you’ve made. Therefore, be cautious about what you promise, and then deliver beyond that promise.
  • Don’t Overcommit: This tip acts as a corollary to underpromising. Don’t say yes to everything just to please a client. Down the road, you may pay for that tendency. Learn how to avoid and deal with “scope creep” — requests for work that was not part of the original scope — at “Scope Creep: A Project’s Worst Enemy.” 
  • However, Be Open to Reasonable Client Requests: Some client requests that fall outside the scope of work can require little extra effort and add value to a final project. In addition, these ad hoc requests may entail work that clients are willing to pay for. So, don’t always be afraid to say yes — especially when a request makes sense. You can find free and customizable project scope templates “Free Project Scope Templates.”
• Have the Confidence to Push Back on Some Client Requests: When a client request has the potential to hinder the success of a project, you need to say no. In order to determine whether you can accommodate a request and still benefit a project, think through the consequences of that request. If you conclude that such a request can’t help your project (but can only hurt it), here are some tips on saying no effectively:
  • Give Your Client Your Opinion, Based on Your Expertise: Explain to the client why their idea will hinder the project or their organization. Use examples of similar circumstances that you’ve encountered in your past experience. 
  • If the Client’s Request Is Outside the Agreed-Upon Scope of Work, Tell Them: Provide details on the additional costs and fees to do the new work.
  • If the Request Is Going to Delay Another Part of the Project, Make Sure That the Client understands That: Talk about adjustments that you might need to make (in the project’s schedule or in anticipated results) if you accommodate the new request.
  • If You and Your Team Don’t Have the Capacity to Do the Additional Work, Tell the Client: Suggest alternatives that might accommodate at least part of the request.
    
    Contek Consulting's Zotti says that, in some cases, a client request emerges as an attempted fix for a perceived problem on a project. However, clients often don’t understand enough about an underlying problem to be able to offer the best solution, he adds.
    
    You need to make sure that the client-identified sources of a problem are real, “so that when you implement the solution, it actually fixes (and doesn’t just cloak) the problem,” Zotti notes. 
    
    “You have to be confident enough about your level of expertise — and articulate enough to ensure the client that you understand that the issue they’ve identified is real — while also communicating that you have a responsibility to examine the issue in the context of the overall project.
    
    “It’s being able to speak from a place of confidence. When a client says, ‘I want this done sooner,’ if you respond right away with, ‘Sure, we can do that,’ you’re blindly setting a submissive tone for yourself that is sure to cause problems downstream,” Zotti says.
• Communicate Well and Consistently: Experts say that the single most crucial part of strong customer relations is maintaining consistent, effective, and reciprocal communication. In this article, you’ll find expert advice for handling your customer communication, keeping your customers happy, and increasing your profits.
• From the Outset, Be Specific about the Communication Process: Zotti says a provider must be able to quickly escalate problematic issues with a client representative who can address and correct those issues. “If both parties agree upfront on how to resolve conflicts, that agreement significantly minimizes potential problems down the road.”
• Track Communication with Contacts and Respond Accordingly: Your organization must set up a structure and system to guide and track communication with clients and prospective clients, and then be able to customize that communication accordingly. Customer relationship management software can help with such work; you can also set up a client relationship management dashboard. (To learn more about CRM dashboards, read “Customer Dashboards: CRM, Customer Service, Success, and More.”) 
  
  “You have to record your activity [with customers],” Dylan Max says. “If you don’t, you won’t have any way to gauge the efficacy of your communication process.”
• With Current Clients and Projects, Set Mutual Goals Together: From the beginning of a new partnership, make sure that your company and your client agree on project goals and expected outcomes. Sit down in person, if possible, and work toward some agreed-upon goals and expected outcomes. Those goals and outcomes will likely include the essential deliverables that your client expects.
• Build Credibility and Trust over Time: Trust won’t exist at the very beginning of your first project with a new client. But, you will build trust over time if your team is professional and consistent. Setting the right tone at the beginning is paramount. When selling yourself to a prospective client, you can establish your credibility by doing the following:
  • Sharing previous work, especially examples of similar projects
  • Providing testimonials from past clients who appreciate your work and your professionalism
    
    As you work on your first project with a new client, you can establish trust by doing the following:
  • Communicating Professionally: Don’t be too informal at the beginning. From the client’s communication, you can get a sense of what tone is appropriate.
  • Being Transparent and Honest: Be upfront about everything, including your experience in certain areas and potential project delays. Being cagey will only poison a relationship and bring it to an early end.
    
    Zotti says that when a provider starts building credibility and trust with a client, the client will naturally come to them with new projects or other opportunities. “In essence, your company is going to be viewed as a colleague or as an extension of the family.”
• Take the Initiative and Anticipate a Client’s Needs: Show your client that you’re working to understand their industry and their issues:
  • Research your client’s industry to understand the challenges they face.
  • Don’t offer a client solutions that focus on what you’ve done in the past. Instead, tell them how you can fix specific problems that they’re confronting or how you can complete their project in a stellar way.
• Diffuse Difficult Client Interactions: Clients often get frustrated, for both good and bad reasons. Here are some ways to deal effectively with those frustrations and occasional freakouts:
  • Always Remain Calm: No matter how angry your client may get, stay calm and don’t respond emotionally. 
  • Make Them Feel Heard: Acknowledge their frustrations. Take notes and talk through possible solutions, including any they might suggest.
  • Find Areas in Which You Agree: Even if you disagree with some of their proposed fixes, find areas where you can come together to move forward.
  • Agree on a Plan: End the meeting with concrete first steps on moving forward effectively. That might mean simply scheduling another meeting, possibly with other participants. If you have agreed on some concrete actions, write them down and send them to the client to ensure that both sides have a common understanding regarding solutions or next steps.
• Understand That Some Clients Are More Important Than Others: We may want to treat every client as though they’re the most significant. But, that’s not realistic — or even wise. 
  
  What’s important is “understanding that not all of your customers are the same,” says Netomi’s Max. “The most effective form of customer management involves segmentation,” which means segmenting out your best clients (or your best prospective clients) and giving them more focused attention.
• Don’t Compete on Price: There will always be someone who will do a job for a lower price — sometimes an unrealistically low price. Compete by convincing customers that your organization does great work and that it is worth every penny you charge.

The art of client relationship management (CRM) focuses on organizations (particularly professional services) that work repeatedly with a group of clients. To learn more about customer relationship management that focuses on organizations that have thousands or tens of thousands of customers, read “CRM: Beyond the Technology.”

Successful organizations follow some common best practices in day-to-day client relationship management. Here are some of those best practices:

• Respect a Client’s Time: Schedule meetings and arrive on time. Some introductory small talk is fine, but potential clients will respect you if you quickly get to the specifics you both want to discuss.
• Meet Face to Face: Not all meetings need to be face to face, of course. But, in order to introduce yourselves or discuss a significant problem with a project, in-person meetings are best, as they build trust and are more productive.
• Be Professional and Avoid Pettiness: Be professional in how you communicate and do business, and don’t allow yourself to devolve into pettiness because of a problem or conflict. 
• Know Why a Client Should Buy from You: Don’t just tell prospective clients what your organization does or what it has done for past clients. Give them specifics as to why you’ll do an extraordinary job on their project or in solving their problem.
• Explain How You’re Different from Competitors: This best practice acts as a corollary to explaining why clients should buy from you. You need to understand your industry and your competitors’ capabilities and offerings. Understanding your market will allow you to differentiate your organization from others and explain why you offer better value than any competitor.
• Don’t Just Email — Pick Up the Phone: Just as face-to-face communication is often preferable, in other cases, a regular phone call is preferable (to an email or other form of digital communication). Clients will appreciate the time you take to make a phone call. Calling a client can also prevent misunderstandings that may occur in writing. An email may inadvertently convey curtness or some other perceived form of disrespect.
  
  “Email and text are not sufficient,” says Levin, with Custom Solutions, Inc. “You still have to pick up the phone. Even if your client never answers the phone, you greatly increase the chance that they’ll return an email or text if you make a phone call.”
• Ask for Feedback and Reviews: During a project, you must get continual feedback from a client in order to maintain a project’s momentum and keep both parties happy.
  
  Contek Consulting’s Zotti says that a provider and its clients must agree upon a structure and process for communicating feedback and other information. He also emphasizes that such communication must be reciprocal; a provider must feel free to offer feedback on a project, and, likewise, a client must feel free to contact a provider with any concerns.
  
  “One of the biggest mistakes I’ve seen...is when a client believes that it’s a one-way feedback loop. You generate a far more effective and desirable result when a partnership allows for information to flow both ways.
  
  ”Providers should also ask clients for assessments and reviews after a project is complete. This postmortem feedback can be both private (to help a provider improve) and public (especially concerning successful projects). Those positive reviews can have a huge impact on a provider’s future business.
• Understand When a Client or Potential Client Is a Bad Fit: You may want to believe your organization can help everybody. But, some clients or potential clients are simply a bad fit for your organization: They quickly become far more work (and cause much more anxiety) than they are worth to your organization. Following are some red flags that indicate a bad fit:
  • They ask for large discounts off your traditional price.
  • They’re vague about the work they want you to do.
  • They’re indecisive or they frequently reverse course.
  • They’re unwilling to pay an upfront deposit (in the case that such a policy is standard in your industry).

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