Running a business is never just about delivering a product people want. While fulfilling needs is important for a business to survive, building positive customer relationships is necessary for an enterprise to thrive and expand. It is the quality of human
relationships and the customer’s affinity with your brand that influence their willingness to purchase and their satisfaction with what they bought after the fact.
Over 50% of customers say they experience buyer’s remorse or negative emotions such as guilt and regret after making a purchase. All this results in a rising rate of returns and customers reacting
emotionally at the slightest deviation from expectations. These factors feed into growing chargeback claims, with
65% of merchants reporting a rise in chargebacks and growing instances of friendly fraud over the past three years.
So what’s the way out for sellers?
Building healthy customer relationships is an excellent way to differentiate a brand from competitors, earn customer loyalty and drive business growth. Strategic customer experience management has proven its mettle in boosting sales, reducing returns, and
Why is building healthy customer relationships crucial?
Merchants should understand that customers are ultimately humans driven by unique desires, emotions, and existential needs. Some
88% of customers look for authenticity when making a purchase decision, while 46% of consumers say they would be willing to pay more for a brand they trust. Similarly, 66% of consumers think transparency,
in where the brand sources its materials, how it treats employees, and what it cares about beyond the profit motive, is one of the most important qualities of a brand. Likewise, 77% of consumers buy from brands that share the same values as them.
So when you touch customers’ human side and foster a deep emotional connection, you unfold the chance to create a positive bias in their minds toward your business. Doing this has several advantages, including:
- Earning repeat business: Satisfied customers make repeat purchases
- Reducing buyer's remorse: When people purchase from a brand they adore, they tend to experience buyer's remorse less often
- Generating word of mouth: Free marketing for your business that boosts reputation? That's a win-win
- Gathering feedback: Good customer relationships simplify gathering direct feedback about your products, services, and overall user experience.
- Less transaction disputes: This can save you from friendly fraud and the consequent mounting chargeback fees, often ranging on average between $15 and $50.
Brands that put experiences first
Starbucks: A focus on experience
Starbucks leverages its ambiance and atmosphere to get people to come back repeatedly. In addition to selling coffee, they offer a space for people to unwind, relax, and work without being hurried - tapping into people’s emotions. Moreover, they personalize
experiences by calling out people's first names while handing out customer orders and creating a humane experience. A
2021 customer loyalty study revealed that 21% of Starbucks customers return to their favourite outlet within three days, highlighting the importance Starbucks gives to making their customers “feel at home.”
Patagonia: Building a positive reputation
Patagonia uses organic cotton and recycled materials to put sustainability at the top of its priority lists. With increasing awareness about the effects of fast fashion on the environment, customers can connect with them better because of the earth-friendly
business practices. Yvon Chouinard, the founder of Patagonia,
revealed to McKinsey that the self-imposed 1% earth tax might not solve all the environmental issues, but it is the best a company can do. Such honesty resonates with younger generations like Gen Z
Nordstrom: Connecting through personalization
Nordstrom isn’t popular just for apparel. They differentiate by helping people look and feel good. With their personal stylist program, people feel confident about how they’re looking. This extra element wins Nordstrom's massive customer trust, fosters relationships,
and ensures more significant customer satisfaction.
Nordstrom CEO Erik Nordstrom revealed that customers who engage with stylists spend seven times more than others and experience higher satisfaction levels.
Challenges of building better experiences and the ways to resolve them
Getting this relationship-building game right takes consistent effort and time. Including, of course, obstacles:
- Lack of personal interaction: With increasing digitization, adding the much-needed personal touch to build relationships can feel like a challenge. However, you need to get creative and find ways - it’s possible. With data tools, you can understand
your customer base more efficiently and set up automated campaigns to communicate regularly.
- Adapting to changing customer preferences: In the dynamic marketplace, customer preferences and expectations keep evolving. Adapting continuously to stay relevant and meet customer needs can feel challenging, especially when the competition is proactive
at this. However, engaging in customer interactions as a regular business practice can help you be aware of their needs and lend you an advantage.
- Difficulty being consistent: Building trust demands consistency and can be difficult when growing or expanding into new markets. In these situations, it’s essential to approach growth stepwise and onboard expert partners for support.
- Efficiently handling customer complaints: Addressing customer grievances is often time-consuming and stressful. If things go wrong, responding with a resolution quickly can get tricky. You need a dedicated customer support team and a customer experience
strategy for this. They must be trained to hear customers patiently, calm them down and close the complaints effectively.
- Dealing with difficult customers: Sometimes, the challenges lie with the customer groups. Despite your best efforts, they may be unreasonable, unhappy and leave negative reviews for no fault of yours. They may also
file for chargebacks because they forgot a purchase they made, or a family member made using their card without investigating, or they may have malicious intent too. In order to avoid issues, it’s best to lay out transparent
terms and conditions, generous return policies, and explicit billing descriptors. As for chargebacks, it’s advisable to outsource handling disputes to an external expert team to enable your customer service team to focus more on relationship building.
Building strong customer relationships and loyalty is the mantra to thrive and grow in today’s competitive ecommerce marketplace. Getting it right starts with recognizing that every customer is a unique human and not just another statistic. With this understanding,
you need to prove you’re not another faceless business to stand out. Leveraging emotions, empathizing with customers, and communicating promptly is the way to go. Then, as a business, you need to get creative and strive to use your team’s capacity to build
the most lasting relationships.
When building customer relationships, dealing with issues like payment disputes and chargebacks can be time-consuming. Therefore, it makes better business sense to delegate tasks like these to experts to focus on what matters the most.