Customer-centric companies need a metric that measures customer relationship strength.  Here’s one way to create such a metric.  Surely your company is thinking about creating and maintaining strong relationships with your customers. Therefore you need a way to measure customer relationship strength.  Perhaps you gather a number of customer data elements such as purchasing data, customer tenure, channel usage, revenue-per-customer, and customer loyalty. This is good data. However, these do not measure the strength of a customer relationship, often referred to as RSx.

A Metric for Customer Relationship Strength

RSx is a metric used to measure relationship strength.  You can apply the concept of RSx to any important relationship such as customers, employees, and channel partners. RSx enables an organization to identify the areas in which a firm needs to improve relationships with partners, customers, or employees.

Buy Your Best-Practices Workbook

Develop Your Relationship Strength Metric

To develop an RSx you will need to identify and research the factors that drive the relationship. The drivers for your company will be different than the drivers for another company. For example, for your company economic and resource drivers may be paramount, such as price and materials information. For another company, social drivers such as branding might be the ticket. Relationship drivers are different for each business category and each company.

Three basic steps for developing your RSx include:

1. Inputs: identify the internal (for example production costs), customer (for example average order value), and external drivers (for example interest rates) that influence the customer relationship.
2. Rate: Align the drivers with three elements that characterize relationships: trust, commitment, and mutuality. Rate each driver on a 1 to 10 scale, with 10 being high and 1 being low regarding their impact on each of the three elements.
3. Evaluate: Identify which drivers have the highest impact on trust (confidence in the company to deliver on its promises), commitment (likelihood to continue to buy), and mutuality (creates positive interactions). Assess what must be sustained and what drivers you need to improve.

Once you complete these three steps, develop strategies and tactics to improve those relationships. Prioritize your efforts on drivers that will strengthen the relationships.

Ready to create your metric?

FAQ:

• Inputs: Identify internal, customer, and external drivers influencing relationships (e.g., price, brand perception, market conditions).
• Rate: Evaluate each driver’s impact on trust, commitment, and mutuality on a 1-10 scale.
• Evaluate: Prioritize drivers with the greatest influence to sustain strengths and target improvements.

Comments are closed.