What is Customer Relationship ?

In CRM the alphabet ‘R’ means relationship. But there is always an ambiguity to understand the actual meaning of this relationship. This relationship between supplier and customer is not a personal relationship or a one-time transaction relationship; for example buying a refrigerator from a consumer’s outlet would not be called as a relationship.

Relationship between any two parties is actually the interaction or transaction done between the two over-times or consists of a continuous series of synergistic episode of interaction many a times. This relationship only exists when the two parties diverge from a state of autonomy to mutual or interdependent. Occasionally having a cup of tea from a cafe does not mean that there is a relationship. If the customer returns to the cafe and orders the same tea again because he likes the environment and taste or the method of making tea, more looks like a relationship.

Relationship with customers can change from time to time because it is evolved under distinguished situations. Following are the stages from where the relationship with customers can evolve-

• Exploration- Exploration is the process when customer investigates or tests the supplier’s capabilities and performance or cross verifies the product’s or brand’s usefulness. If the test results fail to satisfy customer’s demands, the relationship can drastically come to an end.
• Awareness- Awareness is the process when the customer understands the motivational values of supplier or the products he sells.
• Expansion- Expansion is the process when the supplier wins customer’s faith and customer falls under huge interdependence of the supplier. This is time when there are more chances of business with that particular customer and expand business.
• Commitment- Commitment is a powerful stage when suppliers learn to adapting business rules and goal to excel.
• Dissolution- Dissolution is a stage when customer requirement suddenly changes and he looks for better perspectives. This sudden change is the end of relationship.

Relationship can come to an end due to many reasons like - customer is not satisfied with the services of supplier or customer diverges to other better brands and products. Suppliers can also prefer to break relationships due to customer failing to be a part to increase sales volume or when the suppliers are entangled with fraud cases.

Broadly there can be two distinguished attributes of a developed relationship between supplier and customer:

1. Trust: Trust means confidence and security in any relationship and can be treated as the biggest investment in building long term relationships. Trust is developed between the two parties when they experience flawless and satisfied motives between each other. As a result of knowing more about each other, all the doubts and risks are minimized and leads to inevitably smooth business. Lack of trust on the other hand weakens the relationship foundation and chances of uncertainty and conflicts increases.
2. Commitment: Commitment is yet another milestone that should be achieved to set a long term mutual relationship. Commitment can only be attained when there is mutual trust and the two parties share each other’s values. In a committed relationship both suppliers and customers strive to uphold the relationship and never want to exit which in turn results in building the relationship stronger and sharper. There is, in fact, huge cost which is incurred in switching from committed relationships of one supplier and build new relationships with other suppliers from scratch.

Relationship is always mutual or reciprocal so it is important for both supplier and customers to stick to common guideline to attain better relationship among each other. There is lot of involvement of cost, efforts and time in striving developed relationships between the two parties but the outcome is always inevitable.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.