Pursuing Growth in a Post-Covid Era: Why optimising Customer Relationships is Key

Winter 2021/22

Business shocks such as COVID-19 and Brexit have placed considerable strain on customer relationships over the past 18 months. As a result, decision makers have had to work harder to understand their customers’ unique needs and challenges, as well as adapting and innovating to give them what they want.

So, what lessons have UK-based companies learned and how can they re-model customer relationships to achieve growth in the post-Covid era, while keeping an eye on costs?

Research commissioned by management consultancy, Vendigital, with 151 C-Suite executives at UK-based companies, sheds light on how businesses have responded to significant changes in customer demand and behaviours linked to the pandemic and Brexit.

The findings reveal that many businesses have had a positive experience, with over half (54 per cent) of C-Suite executives believing that their customer relationships have grown stronger during the pandemic and in the aftermath of Brexit. The majority of these respondents think this positive change is a result of efforts to adapt their operating models, to reflect changes in customer / consumer demand and behaviour.

Of the 21 per cent of respondents who believe that customer relationships are weaker now than they were before these market shocks, most believe this is due to reduced face-to-face contact. Others cited the impact of missed deadlines, increased price competition and strain on relationships, due to fluctuating levels of demand.

In terms of the biggest changes to customer behaviour seen during the pandemic, C-Suite executives ranked increased demand for a specific product or service at the top of the list, followed by increased customer anxiety. Other significant changes included an increase in online business activity, greater emphasis on reliability and safety, and shedding customers, due to travel restrictions and other operational disruption.

In order to grow, it’s vital that businesses continue to innovate to meet customers’ needs, while keeping costs under control. In fact, according to Vendigital’s research findings, 87 per cent of C-Suite executives said that this will be key to their survival in the year ahead. However, 79 per cent said that this has become more difficult, due to an increased risk of supply chain disruption, pandemic-related uncertainty and ongoing market and geopolitical uncertainty. Overestimating demand could lead to businesses gearing up too quickly, causing a spike in costs, while underestimating could limit their growth trajectory.

At the same time, a number of cross-industry trends are placing pressure on businesses as they attempt to cater to customers’ shifting needs and behaviours. These include heightened demand for choice and flexibility and an increased demand for data, in order to support senior level decision making. Other trends revealed include customer-driven disruption, as customers look for cheaper and more convenient products and services, spending uncertainty and efforts to seek a sustainability advantage. An understanding that customers increasingly want to buy from companies that share their values when it comes to protecting the environment, lies at the heart of this trend.

The importance of close collaboration was also highlighted by the research findings, with greater focus on mutual viability and resilience ranking as the most important attribute of a fully-optimised customer relationship. Other key factors were identified as streamlined ordering / inventory management, based on customers’ needs, and an increased likelihood of businesses innovating together.

By asking themselves a number of key questions, businesses are more likely to be successful in optimising their customer relationships and securing a strong platform for their future growth.

Examples of these questions include: “Will your current infrastructure support you if you decide to expand your revenue channels?” and “Have any of your core business processes experienced interruption in the last 18 months, and what could the long-term impacts be?”

These questions are positioned to help business better understand how the past few years have affected them, and how easy or difficult it might be to adjust their operating model to meet customers changing demands.

Recent market shocks have revealed that strong customer relationships are more important than ever and are vital for businesses looking to unlock value as they pursue growth in the post-Covid era. By keeping customer relationships under review and investing in improvements now, organisations can equip themselves to meet the needs of their marketplace and nurture valuable long-lasting customer relationships as they do so.