What Is Relationship Management?Relationship management is a strategy in which an organization maintains an ongoing level of engagement with its audience. This management can occur between a business and its customers (business to consumer [B2C]) or between a business and other businesses (business to business [B2B]). Relationship management aims to create a partnership between an organization and its patrons, instead of viewing the relationship as merely transactional. Show Understanding Relationship ManagementRelationship management involves strategies to build client support for a business and its offerings, and increase brand loyalty. Most often, relationship building occurs at the customer level, but it is valuable between businesses as well. A business may hire a relationship manager to oversee relationship building or it may combine this function with another marketing or human-resources role. Building a relationship with clients yields rewards for all parties. Consumers who feel that a company is responsive to their needs likely will continue to use that company's products and services. A company's reputation for responsiveness and generous post-sales involvement can often stimulate new sales. Maintaining communication with consumers lets a company identify potential problems before they come to a costly head. Customer Relationship Management (CRM)B2C businesses rely on customer relationship management (CRM) tools to build a solid rapport with their customers. CRM involves a significant amount of data and sales analysis as it seeks to understand market trends, the economic landscape, and consumer tastes. CRM also can include marketing techniques and a post-sales support program. Typically, a CRM program will consist of written media (such as sales announcements, newsletters, and post-sale surveys), video media communication (such as commercials), and tutorials. Ongoing marketing is critical to a business, as it is more costly to acquire a new customer than it is to maintain a current customer. Marketing helps a business to gauge consumers' interests and needs, and develop campaigns to maintain loyalty. Business Relationship Management (BRM)B2B relationships with vendors, suppliers, distributors, and other associates can also benefit from relationship management. Business relationship management (BRM) promotes a positive and productive relationship between a company and its business partners. BRM seeks to build trust, solidify rules and expectations, and establish boundaries. It also can help with dispute resolutions, contract negotiations, and cross-sale opportunities. Business relationship management (BRM) and customer relationship management (CRM) are different, yet must work hand-in-handDuring a recent talk to the Service Desk Institute about the future of the service desk, I asked the audience which processes they were involved in. No-one mentioned business relationship management, despite the fact that direct contact with customers was probably the most prominent interaction between the service desk and customer – often the only contact. Even when I asked the attendees whether anyone thought that the service desk should be involved in business relationship management, only three people put their hand up. At some point in our lives we may all be both customers and service providers. The ability to see both sides of the coin will help to understand that business relationship management (BRM) and customer relationship management (CRM) are different, yet must work hand-in-hand. When we talk about BRM what do we mean? BRM aims to maintain a positive relationship with customers. ITIL business relationship management identifies the needs of existing and potential customers and ensures that appropriate services are developed to meet those needs. There are conflicting views around the definition though. Some see CRM as a sub-set of BRM because CRM only deals with customers, who are only one type of stakeholder. Others see BRM as being the IT service management equivalent of CRM. To be honest, like most things in this industry, it’s about how we choose to adopt and adapt best practices to suit specific circumstances and respond to the objectives of customer and business. Many organisations will have a CRM process or similar already embedded in customer service, marketing and sales functions – and it’s good to be able to make a link between this and BRM. The service desk is already involved in BRM, even if they don’t recognise it. Even if only viewed as a service encounter, a good or bad experience with the service desk is likely to positively or negatively influence the relationship between the service provider and customer. If you want your customers to see you as a trusted partner, you need to have progressed to competent supplier before you earn the right to try for a deeper relationship. Here is a suggested approach to building a strong relationship: 1 – Identify customers and other interested parties: Typically, the customer would be the person who buys the services, and they may or may not be users of the services. Other interested parties could include management, customers of our customers, shareholders, government, regulators, professional bodies, and suppliers. Depending on the situation, we may want to start off by deciding whether we want to do business with the potential customer or not, before we waste time or money. We should ask whether we want / need a relationship; what’s in it for us and for them; are we compatible? Can we help each other? Do we have a choice? 2 – Appoint a relationship manager: Assuming we do need a relationship, we need someone at an appropriate level of seniority who will be responsible for managing the relationship, accountable to the customer for performance, but also acting as an advisor and advocate, facilitating that two-way communication, including any required translations. Named individuals should be responsible for managing the relationship and customer satisfaction. 3 – Establish communications and engagement: BRM identifies customer needs and ensures that the service provider is able to meet these needs with an appropriate catalogue of services: “This process has strong links with service level management,” according to ITIL 2011 Edition. The main purpose of BRM is to capture demand in a business / service context. The BRM process should be used to identify customer need / demand; identify changing business strategy and objectives; and ensure that continual improvement opportunities are being fed in. 4 – Understand required outcomes: The requirements can come from any number of interested parties, such as regulators, professional bodies, suppliers, internal groups, shareholders, and so on. Their objectives and desired outcomes could include improvements in efficiency and effectiveness, cost reduction, standardisation, service quality improvements, greater maturity, and revenue protection or growth. It’s important to identify who gets the benefits as well as what they are. 5 – Define how outcomes will be achieved: According to ITIL 2011, the service management system (SMS) is a “management system to direct and control the service management activities of the service provider.” The SMS includes all service management policies, objective, plans, processes, documentation and resources required for the design, transition, delivery and improvement of services to fulfil the requirements in ISO/IEC 20000-1:2011. Design the SMS and the services which aim to meet the outcomes and requirements. Agree with the customers and other interested parties what you’re going to do and how you’re going to do it – service catalogue, service level agreements and contracts etc. 6 – Change and improvement: Manage change, including requirements; proactively drive improvements; measure satisfaction and deal with complaints. For the relationship to work, it must be rewarding for both parties – the first law of interpersonal attraction. Encounters can lead to relationships, even possibly a life-long partnership, but both sides have to get something out of it and make a firm commitment. Matthew Burrows (pictured) is managing director of BSMImpact and a member of the management board of the IT Service Management Forum (itSMF UK). Read more on Datacentre systems management
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