You may have heard the term “relationship marketing” being tossed around recently. Relationship marketing refers to everything you do to develop strong, lifelong relationships with your customers. From influencer programs to referral campaigns to affiliate marketing, relationship marketing builds brand awareness and positions your brand as your customers best option. The most important part of relationship marketing is facilitating two-way conversations with your customers.
What is Relationship Marketing and What Can it do for Your Business?
This type of marketing differs from traditional marketing in that it’s not transactional, but rather relational. The old way of doing things focused on making more sales. The new, better way focuses on creating a better overall brand experience that will not only help you attract more customers, but retain those existing ones for the long term.
The shift toward this more personal marketing approach has been driven by the increased demand of consumers who want to know that the brands they work with not only offer quality products or services, but truly care about them. People want to know there are real faces behind your logo, that you’re listening to their concerns and that you’re willing to go above and beyond to satisfy them.
Now that you have a better idea of exactly what relationship marketing actually is, let’s take a look at several benefits developing this type of strategy can have for your business:
Relationship Marketing Helps You Retain Long-Term Customers.
Research has shown that the longer a customer stays with a brand, the more valuable they become. In fact, an annual increase of just 1% in customer retention can equate to a 20% increase in revenue annually. When you work on building relationships with your customers, and not just selling to them, you begin to develop loyalty, which means they’re more likely to stick with your brand for the long haul.
Relationship Marketing Increases the Likelihood of Referrals.
Regardless of the dozens of different marketing techniques out there today, word of mouth is still the most powerful, with 84% of consumers citing the recommendation of a friend or family member as their most trusted source when making a purchase decision. The more satisfied and loyal your customers are, the more likely they will be to refer your brand to others. The best way to achieve this is through relationship marketing.
Relationship Marketing Makes Price Changes Easier.
Many businesses hate raising their prices for fear that they’ll lose customers as a result. Yet, with the economy the way it is, price increases are something we all have to consider from time to time. A solid relationship marketing strategy can help make rolling out a price increase much smoother. That’s because when you’ve worked hard on the front end to develop relationships with your customers, the resulting loyalty will make them less likely to leave over a price change.
Relationship Marketing Creates an Excellent Opportunity for Feedback.
When you’ve got a whole slew of happy, loyal customers in your corner, you’ve got an instant test market at the ready. Whenever you need to try out a new product or propose a new service, your loyal clientele will be there to offer feedback. Want to know how you’re doing? Ask your long-term customers. Their feedback can help you determine what your business’ greatest strengths are as well as identify areas that need improvement.
Relationship Marketing Will Give You a Competitive Advantage.
The good news for you is that not everyone has jumped on the relationship marketing bandwagon. That means that there’s a pretty good chance at least some of your competitors are not yet leveraging this powerful tool for their own benefit. When you offer a more personal touch with your products or services, you’ll easily achieve a leg up on those that are still stuck in the sales-driven marketing era. That alone is worth its weight in gold.
Some simple tips to help you get started on the right path toward a more relational approach to marketing:
- Keep open, honest lines of communication with customers.
- Invite feedback.
- Be social.
- Interact and engage with customers and prospects via social channels.
- Provide exceptional support and service.
- Integrate customer feedback into product/service improvements.
- Monitor what’s being said about your brand online and respond accordingly.
- Offer a customer loyalty program.
- Go out of your way to show customers that you value them.
By making the shift from traditional marketing to relationship marketing, you’ll be well on your way to attracting and retaining customers that don’t just like your brand, but love it. Accomplish this and success is sure to follow.