Does your marketing process create long-term relationships with your customers, or do you instead focus on getting the sale and moving on to the next prospect?
There’s a lot of value in building strong relationships. They enable you to spend less time and money on new customers, and it maximizes the value of the ones you have. And customer retention makes a big difference in your bottom line; a retention increase of 5% can increase revenue 25-95%.
What is relationship marketing and how can you take advantage of it to improve your return on marketing investment? Here’s what you need to know.
What is Relationship Marketing?
Relationship marketing is designed to foster long-term engagement, interaction, and loyalty with customers. You want to develop strong relationships by personalizing your marketing approach and meeting their needs as directly as possible.
This relationship is created at the beginning when a prospect is just becoming aware of your brand, and it is fostered through and after the sale. Excellent customer service is a crucial component, as many people leave a company, not because of an inferior product, but because of a poor experience.
Businesses can use a variety of technologies to facilitate the relationship, from social media outreach to email marketing. The data created from these interactions has to be analyzed so your brand can keep pace with how people are reacting to your messages. The key is to deeply understand your customer — when you know exactly who they are and what their most significant needs are, you can construct highly personalized marketing that helps them feel connected to you.
Understand Your Current Brand Loyalty
The starting place for any relationship marketing program is to know where you are now. Hopefully you already have a strong brand that engenders loyalty, but if you don’t, you can learn how to create one. Understand the psychology behind what makes customers loyal to your brand, and make a plan to move in that direction. Do you currently have a customer loyalty program? If you do, how well is it working? What feedback are you getting from customers who use it— and who stop using it?
Finally, what does your current customer churn look like? Today’s big data and technology mean that you can see this at a very detailed level without much effort. You can not only see what happened in the past but predict what your churn levels will be going forward. Once you’ve gathered data on where you currently are, it’s time to use relationship marketing to improve loyalty and customer retention.
Use Data to Personalize Your Approach
You already understand precisely who your customers are; now it’s time to be deeply personalized in your approach. People crave a unique experience that feels like you know them personally. Companies like Amazon, Netflix, and Hulu do big business by using individual customer history to recommend future purchases.
A personalized experience helps a prospect bond to your company and trust you more strongly. They believe that you understand their needs, and they are more receptive to hearing your ideas on how to meet those needs. This trust is the beginning of a relationship, and when you keep your communication consistent, that connection deepens over time.
Create Compelling Content
Part of building a relationship with your customers involves not continually focusing on the sale. You want to bring them into your brand story and help them to see a more personal view of your company. For instance, Marriott advertised in 2017 on Snapchat with “Snapisodes” that highlight a variety of travel destinations. Of course, they hope you’ll book with them when you travel, but the marketing itself isn’t a sales pitch. It’s educational and informative and helps build the relationship young people have with the brand.
As another example, Zappos uses their “Beyond the Box” page as a newsroom of behind-the-scenes content, including a story about an employee determined to live their best life despite cancer.
These stories aren’t direct sales pitches, but they are emotional, compelling snapshots that help readers feel more connected to the brand.
Make Your Sales Process Efficient and User-Friendly
When people are ready to buy, you don’t want to put any obstacles in their path. Be sure you’re aware of the user experience on your website and throughout the sales process. Smooth user experience will reinforce the sale and increase your profitability.
You also need to make sure your behind-the-scenes processes are efficient, from the sale to customer service. Customer service is especially important because a poor experience here can undo all the hard work you’ve put into building your customer relationship. With an easy-to-use sales process and great post-purchase support, you can win a customer for life.
Maintain Your Relationship After the Sale
The biggest goal of relationship marketing is to maintain your connection to a customer after the initial sale. When an existing customer makes a second, third, or further purchase, they often spend more money. You also don’t have to spend all the marketing time and money on winning those subsequent purchases.
Existing customers aren’t just valuable because of the additional buying they do, but also because of the advocacy they can provide for your brand. A happy customer will talk to friends and family about your products and encourage them to buy as well.
A great customer relationship pays significant dividends over the long term. That’s why you can’t afford to focus on single-transaction marketing. Start building relationships today!
Guest Post: About the Author
Luke Smith is a writer and researcher turned blogger. Since finishing college he is trying his hand at being a freelance writer. He enjoys writing on a variety of topics but technology and digital marketing topics are his favorite. When he isn’t writing you can find him traveling, hiking, or gaming.