The curious case of Customer Relationship Management (how to manage different customers)

Customer Relationship Management (CRM) has been methodically studied by academicians and industrialists for decades. The services industry has thrived on leveraging positive outcomes of maintaining a good customer relationship. But there is no single approach to engage with all types of customers. Every customer is different in his/her own way. And needs to be meticulously dealt with depending on the industry, geography, cultural aspects, professional experience etc. Understanding the type of customer is quintessential to improving customer retention. In this article I intend to cover different types of customers and how to effectively manage them.

Customers by designation

  1. C level: Senior most/most experienced employees of the organization. Consists of CEOs, COOs, CIOs, CTOs etc. This group of individuals has the highest degree of influence and decision-making ability in any organization. Their concern is more on how a key decision can influence their business strategically. Hence will be more interested in a holistic view than technical details while considering a business deal.
  2. Middle level: Leaders who head vertical teams, departments or geographies. They include Presidents, EVPs, SVPs, VPs Directors etc. and are responsible for taking departmental level decisions. They are more interested in how their division’s position would change due to a business decision.
  3. Functional level: Team leaders who lead teams within a department, geography or vertical. They are typically responsible to look over the day to day operations of a company. They always want to ensure that daily operations run smoothly, and any pitch or proposal made to them should take this fact into consideration.



Customers by skill, sharpness and experience

Here I don’t intend to classify customers. But rather would like to discuss things to be wary of while engaging with different customers who have different skill sets and experience. In the services sector, service providers tend to exaggerate the benefits of their service offerings and also amplify some of their capabilities. But this could bring about catastrophic results if the customer delegate(s) is/are sharp and have enough experience in the industry and knowledge on the topic to figure this out.

Further, some people are very skillful in judging the capabilities of a service provider by studying the body language of the presenter and other vendor delegates. Hence if you are unaware of the level of experience and knowledge of the customer delegates, it is safe to be truthful about your competence. However, packaging the service offerings better so that it impresses the customer is a good way to approach this problem.

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Customer by type of engagement

By type of engagement, here I mean whether a customer is new or existing. The method of engaging has to be very different for both. For an existing customer, a service provider would already know about their business, strategy, requirements, technology landscape etc. Most of the service providers will also be aware of the customer’s way of working, professionalism, communication methods etc. So, vendors are expected to interact with the customer keeping all the above in mind. Proactively making suggestions and solving a problem even before it occurs can improve customer relationship to a large extent.

A new company or prospect is like a complete stranger. There is certain information about the prospect that the service provider can collect from publicly available sources. They include areas of business, global presence, size, competitors, company resources, financial performance etc. At the same time, certain information such as vendor landscape, vendor preferences, current requirements/pain points, budget availability, culture, etc. are not readily available. Such details need to be collected through one or more interactions with the prospect. Moreover, following aspects need to be done while engaging with prospects:

  • A good introduction of the service provider organization needs to be given (this might not be required if the company is a well-known brand)
  • Key differentiators should be explained: Many a times prospects would be currently working with one or more of your competitors. Hence it is necessary for service providers to convince their prospect as to why he should work with them instead of their competitors.

Above activities should be carried out during preliminary stages of engagement. Rest of the discussions that happen during a proposal stage remain the same for both the customer types. The only exception is that for an existing customer the offering or solution needs to be highly customized for their environment.

By behavior and personal preferences

This is an obvious observation. Different individuals have different patterns of behavior and preferences. Some are rude, and some are polite. The service provider should be aware of the character type of the customer delegate(s) and should be capable of managing situations when customer tries to be aggressive or demeaning.

One of the key inferences that a service provider likes to make after every business meeting is whether the customer is interested in his/her product or service offering. Understanding the customer behavior and character type can come in handy during such situations. If a delegate is polite or always comes nice on you, it might not necessarily mean that he is ready to give you business, and vice versa. Further, some customers prefer to work with certain type of vendors. Judging all of these requires skill and also comes with experience.

There are many more classifications done on customer types. I have discussed here the most practically relevant ones that will help businesses in their daily customer engagements. Are you already acting by understanding your customer type? Let me know in the comments section. 

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