Customer service is critical to business success, but even if your business offers great service, you can boost your bottom line by developing relationships with your customers, which build loyalty and increase repeat business.

What’s the difference between customer service and customer relationships?

Customer service is helping a customer with a purchase — whether they're still looking to buy, in the process of buying, or need help after they've completed the transaction. It's an important facet of the customer experience, but it's not the same thing as building customer relationships.

Building customer relationships means listening to customers, anticipating their needs, following up and communicating, and being there for them when they need you, as well as when you need them. While customer service pertains to specific moments, a customer relationship can last through repeat transactions. It's about retention.

Developing customer relationships helps you build rapport with the people you're doing business with, and when done effectively, makes them want to come back to your small business time and time again when they need your products or services.

Have you ever returned to the same auto repair shop because you liked the mechanic who worked on your car? Maybe you felt he was honest with you about the work you needed done compared to what you expected. Maybe he gave you a discount. Either way, you felt he was friendly and helpful and wasn't taking advantage of you. Next time you need a part replaced or maybe even just an oil change, this mechanic is probably going to come to mind. This is a customer relationship, and it will be easier for the repair shop to get you back in the door than it would be to bring in a brand new customer who has no idea if the mechanic is honest or out to price gouge.

As you establish these solid customer relationships, you may also find that repeat customers are willing to make more purchases. They may start coming to you for products or services they previously would have obtained elsewhere, and they might then refer you to their friends and family.

Developing relationships with your customers also gives you a way to feel out the level of satisfaction they have with your business. Even if all your relationships don't blossom into the most loyal customers possible, you can learn a lot and use that information to make improvements.

"Most dissatisfied customers will not complain about a poor customer relations experience; they simply won't return to make another purchase," says David Gargaro at Business News Daily.1 "As a result, it's difficult to tell when customers are not happy with your business. Investing in customer relations can help to prevent these types of customers from unexpectedly ending their relationship. Creating open channels of communication that invite customer feedback can help with identifying customers' problems, which will enable your company to solve those issues and build customers' trust over time. Creating better customer experiences can influence their purchasing decisions more than advertising and marketing."

During the pandemic, it can be difficult to get the face-to-face time that's ideal for fostering customer relationships, but using online tools can help. Along with CRM (Customer Relationship Management) software, social media and your web presence can play a role.

"With technology, there are more ways to begin conversations with your customers than ever before," says Patriot Software CEO Mike Kappel at "There are many online tools and social media outlets you can use to reach customers. When you engage with customers online, be careful not to create a one-way conversation. Ask customers questions, and respond to their inquiries. Also, make sure your website is top-notch, and start a blog to engage your customers and prospects. Build customer relationships through your online presence."

It's critical for small businesses to build as much customer loyalty as possible, and it is usually easier for small businesses to do so compared to their larger counterparts. Small business owners and employees tend to be approachable and have a better sense of their communities. People like to support local businesses when possible and are more receptive to forming relationships with them because it's a way to support the community and neighborhood where they live. Use this to your advantage and look for ways to connect with your customers to build your business as you build solid customer relationships.