What is Relationship Marketing?
Marketing is all about making connections. In 2022, relationships between you and your customers are more valuable than ever. Much like any relationship, it takes time to nurture and grow these relationships. So what is relationship marketing? Relationship marketing aims to maximize the lifetime value of each customer through building good relationships with them. We will take a closer look at the science behind building relationships for marketing and how to implement it in your own business.
The Goal Of Relationship Marketing
The goal of relationship marketing is to maximize profits by building strong relationships with customers and increasing their satisfaction with products and services.
Customer relationships are king. The aim is to build customer loyalty through customer satisfaction. This might look like word-of-mouth or repeat transactions. Relationship marketing means putting the customer’s needs first and providing unique solutions. Customer Relationships Are More Important Than Ever
A lot has changed in marketing and business. We no longer see customers as just numbers or a “sale”. Even though we still gather data, we still notice trends and nuances in the way consumers are making decisions. There are several factors that have led to the growing importance of relationships in marketing.
Changes In Consumer Behavior
One of the biggest booms in marketing and business was the explosion of the internet and smartphones. More than ever, customers could easily access information about products and services on their own. They literally have a wealth of information at their fingertips. Gone are the days when individuals had to wait for the seller to relay information back to them. Now, they can take control of the research process.
Changes In the Way Information is Gathered
Consumers now have the power to gather as much or as little information that they need to make purchasing decisions. This has led to the demand for information to be transparent. Additionally, individuals are taking more time to go over all the information that they find before coming to a decision.
More Demand For Personalization
One of the more traditional marketing strategies back in the day was treating all customers the same way and providing them with the same information and purchasing experience. Now that individuals can customize their experience, they are looking for a more personalized approach to the information that they are receiving.
For instance, in an email marketing campaign, you can break your list of prospects and existing subscribers down to segments tailored to their interests and needs. One of the tenets of relationship marketing is to treat your customers and individuals.
The Many Advantages of Relationship Marketing
The power of relationship marketing is that it creates value, markets to the customers you’ve already won over, and encourages customer engagement. Let’s break this down further into detail:
Through relationship marketing, you are creating valued customers based on experiences. When it comes to making a purchase, individuals find that the customer experience ranks higher than price.
Markets Through Current Customer and Fosters Engagement
First impressions matter, and your goal is to have a lasting impression on your customers. Consumers will avoid a business over just one negative experience. That’s why it’s vital to hit a home run and create a lasting impression with your customer experience.
Decreased Budget Spent on Marketing and Advertising
The more you foster a relationship with your current customer base, the less you will have to spend on marketing and advertising. Acquiring new customers is expensive. With relationship marketing, customers like brand ambassadors or brand advocates can do the marketing for your brand. Let your loyal customers do the work when they tell their friends and family about your products and services.
Higher Customer Lifetime Value (CLV)
The customer life-time value (LTV) is the net profit of an ongoing relationship between a customer and a business. Maximizing and LTV is a huge benefit of relationship marketing. This will lead to more repeat purchases from existing clients, and less costs invested in new customer acquisition.
Why Relationship Marketing Is Valuable
Imagine where your business would be if you stopped getting repeat customers. Additionally, what if customers did buy from your business but they never shared their experiences with friends, family or online followers? While you want to continue attracting new customers, you need foster emotional connections. Through relationship marketing, you are going to be:
- Getting repeat customers
- Gaining new customers based on word-of-mouth sharing
- Acquiring engaged customers who are 4 times as likely to refer friends and family to a business
The Power Of Relationship Marketing
Fully engaged customers bring in 51% higher revenue and sales than actively disengaged customers. They also spend over 23% more, on average 20% of your current customers will be responsible for accruing 80% of your company’s future profits. It’s 5-25 times more expensive to gain a new customer than retain an existing one.
How Feedback Can Lead To Opportunities
With social media and the internet, a customer’s thoughts and opinions can have a huge impact on your business – and can make or break it. However, instead of closing off feedback, adjust your business to welcome feedback and conversations. You may think you are protecting your business, but not having an outlet for feedback, comments and concern will leave the door open for chaos. Relationship marketing is about helping the customer and going above and beyond what they expect.
Strategies You Can Implement In Your Marketing Campaign
There are endless things that your business can use to facilitate customer relationships. You can use these strategies as a starting point for your next campaign.
- Launch a loyalty program that rewards customers.
- Thank customers through an email newsletter and include surprise gift card or coupon
- Create an affiliate system that rewards customer who create sales through network marketing and word of mouth
- Collect customer feedback through surveys, polls and phone calls.
The Best Marketing Agency In 2023
Every top marketing agency has recognized relationship marketing. At Orlando Marketing Firm, we have helped countless businesses grow their brands on social media – from planning to execution and optimization. As a marketing agency, we provide a full range of creative services, content creation, and data analytics.