How can you use relationship management metrics to identify risks?

1 What are relationship management metrics?

Relationship management metrics are quantitative or qualitative measures that can be derived from surveys, feedback, reviews, ratings, contracts, transactions, or other sources. Net promoter score (NPS) measures how likely customers are to recommend you to others. Customer satisfaction (CSAT) and customer effort score (CES) gauge how happy and easy customers find it to do business with you. Customer lifetime value (CLV) reveals how much revenue customers generate over their relationship with you. Supplier performance score (SPS) indicates how well suppliers meet your quality, delivery, and cost expectations. Partner satisfaction score (PSS) evaluates how satisfied partners are with your collaboration and support. Finally, stakeholder engagement score (SES) assesses how engaged stakeholders are with your mission, vision, and values.

2 Why are relationship management metrics important for risk identification?

Relationship management metrics can help you identify risks that could affect your business operations in various ways. For instance, a low NPS or CSAT score could suggest that customers are not content with your products or services, which can lead to churn, negative word-of-mouth, or a decrease in market share. High CES might imply that customers have difficulty when interacting with you, potentially reducing their loyalty, retention, or upsell opportunities. Low CLV might mean that customers are not profitable or loyal enough, adversely impacting your cash flow, profitability, or growth potential. In addition, low SPS may indicate that suppliers are unreliable, inefficient, or of poor quality, potentially disrupting your supply chain, increasing your costs, or damaging your reputation. Furthermore, a low PSS score may mean that partners are unhappy with your cooperation, communication, or support, potentially weakening your strategic alliances, reducing referrals, or creating conflicts. Finally, a low SES could signify that stakeholders are not aligned with your goals, values, or vision which could erode trustworthiness and credibility as well as social responsibility.

4 How can you mitigate the risks identified by relationship management metrics?

In order to mitigate the risks identified by relationship management metrics, it is important to communicate the results and risks to the relevant parties and solicit their feedback and suggestions. Action plans should be developed and implemented to address the root causes and symptoms of the risks, with roles and responsibilities assigned. Progress and outcomes of these action plans should be monitored, tracked, and adjusted as needed. Additionally, you should regularly review and update your relationship management objectives, expectations, and metrics, celebrating any achievements or improvements.