What’s the one thing that all successful businesses have in common? They continuously position themselves as the obvious choice in their customers’ minds and manage to create meaningful and long-lasting relationships. What distinguishes them from their competitors is a focus on relationship marketing with an emphasis on customer retention and loyalty. In today’s post, we’ll discuss what these relationship marketing strategies look like and how you can use them to your benefit, too.
Here’s what we’ll cover in the first part of our relationship marketing series:
- What is relationship marketing?
- Why relationship marketing is so important in business
- Establishing trust through your relationship marketing efforts
- Crafting your relationship marketing strategy
What is relationship marketing?
Relationship marketing is a form of marketing that encompasses a company’s customer relationship management (CRM) efforts. It aims to create strong, emotional bonds with long-term customers - as opposed to achieving one-time sales transactions. At the core of these relationships are trust and transparency.
Relationship marketing is a two-way communication channel
Whereas your email marketing or search engine optimisation efforts are usually of transactional nature, relationship marketing is based on a two-way communication channel between you and your customers. It’s an exchange of ideas, comparable to a tennis match: The ball goes back and forth between the two players. Conversations are very much alike. You’ll find this kind of communication all across the business world. Messages are transmitted between employers and employees and exchanged between a company and its customers. In the end, both parties (hopefully) get what they want out of this exchange.Please note: Although relationship marketing encompasses all different types of relationships, each important in their own right, we’ll exclusively focus on customer relationship management (CRM) for the time being.
Relationship marketing has a very broad scope and is cross-functional
It extends beyond the usual marketing efforts and is organised around processes that involve many aspects of a business. Therefore, some may refer to it as 'relationship management' instead. Apple, one of the world’s most successful tech companies, has mastered CRM to perfection. They put an incredible amount of effort into delivering exceptional products. But not only that. By using relationship marketing across its retail structure and focusing on customer value over short-term benefits, Apple has produced a yet unmatched lifestyle experience that gets people hooked.
The reasons why relationship marketing so important in business
Why do giant companies such as Apple care so much about customer satisfaction? Customer retention is more critical to the success of a business than the acquisition of new customers. No matter the size or nature of the business. Have you ever heard of the Pareto Principle? Also known as the 80-20 rule, it is one of the great secrets of highly profitable businesses. It states that you can expect 80 per cent of your sales to be generated by only 20 per cent of your customers. And here is why:
“Selling to customers with whom you already have a relationship is often a more effective way of growing revenue because companies don’t need to attract, educate, and convert new ones.” Molly Galetto, from NGDATA
Recent research supports this notion and the importance of relationship marketing:
- The likelihood of turning an existing customer into a repeat customer is 70 per cent
- The probability of converting a new lead is 20 per cent
- It costs five times more to acquire new customers than it does to retain current customers
- As little as a five per cent increase in customer retention can increase company revenue by up to 95 per cent
Establishing trust through your relationship marketing efforts
Trust is the most essential element of every conversion, any sale you will ever make. And who’d trust you more than a customer that has had nothing but great experiences with your business? But how do you build trust with future prospects and current customers? The answer is simple. Through your relationship marketing efforts. By providing real value, engaging with your audience and focusing on their needs, wishes and habits, you’ll develop and nurture long-lasting relationships. Transparency goes hand in hand with trust. A quick Google search can bring any well-kept secret or ignored negative review by a disappointed customer, to the surface, so it’s best to be honest up front. Since trust is such a big deal, we’re covering it in a separate post focussing exclusively on building trust in your brand.
Crafting your relationship marketing strategy
Now that you understand the importance of relationship marketing, let’s explore how you can leverage its potential for your business by:
- Personalising your customer service
Personalise your customers' every experience with your brand and make them feel valued wherever you get the chance to do so. To succeed, you need to put yourself in their shoes and understand what’s easiest for your audience and what will guarantee the best possible outcome for them.
- Meeting your customers where they are
Which platforms are they most active on? Do they respond better to email campaigns or Facebook Ads? Are you receiving a lot of Instagram DMs? Ensure that your social media team responds in a timely manner and engages with each customer until their request has been addressed to the customer’s satisfaction.
- Evoking emotions
Emotions are the key to any great relationship. It’s for good reason that they’re often referred to as the holy grail of advertising. How you leverage emotions in your marketing efforts to connect with your audience is critical in creating authentic connections and trust. Relationship marketing offers a great opportunity to connect with your customers. Whenever you communicate with your customers, for example when you send out a newsletter or share a post on social media, appeal directly to their emotional state, their needs and aspirations.
- Offering rewards and incentives
How can you turn one-time customers into tried-and-true brand advocates? Rewarding customer loyalty is critical to the continued success of your business. Loyalty programs that benefit frequent customers, partnering with other brands to offer special deals and building a community on social media are great starting points. The latter is especially valuable, as people will always trust their peers more than any business.
- Gathering customer feedback
There are always two sides to each story. To improve your business and marketing strategy, you can’t skip out on asking your customers for their feedback and listening to what they have to say. What do they like or dislike about your products or services? Where can you improve, where are you doing well? And don’t worry, there is a great opportunity, even in receiving negative feedback from customers. It gives you a chance to demonstrate your willingness to go above and beyond to make your customers happy.
- Creating valuable content
Did you know that 84 per cent of customers don’t trust ads at all? Creating a meaningful content marketing plan that provides value, based on compelling content or cool concepts, will give you a competitive advantage. It leaves your audience feeling great about your brand and they’ll remember that feeling when it’s time to make a purchase decision. Plus, they’re more likely to stay hooked and engage with your content, which is a fantastic opportunity to build social proof.
Our final thoughts on relationship marketing
Relationship marketing can make or break the long-term success of your business. Cultivating strong relationships with your existing customers should therefore always be a priority. So put the time and effort into providing real value to your customers.Focus on emotions, trust and transparency. Reward customers for their loyalty and provide compelling content that focuses on their needs and aspirations. Your customers will be able to see the difference and so will you.Ready to tap into the infinite world of relationship marketing? Or do you have any questions or suggestions? Get in touch with us today and let’s have a chat. We’d love to hear from you!