Benefits Of Relationship Marketing For Customers

Marketing is often focused on the business and their customers, but the most important part of relationship marketing can be seen by you. It’s all about having stronger relationships with your current customers and future customers. When you’re able to keep your customers happy, they will refer your company to others and give you more chances to win over new clients.

In this guide, we review the Benefits Of Relationship Marketing For Customers, relationship marketing strategy, importance of relationship marketing in service sector, and how does relationship marketing affect the customer.

Benefits Of Relationship Marketing For Customers

When it comes to building a strong customer base, there are many advantages. When you’re able to keep your customers happy and loyal, there are many benefits for both you and them. Here are some of the biggest benefits of relationship marketing:

Loyalty To The Company

You can keep your customers loyal to the company by offering them the products and services they want, as well as providing good service. Customers are most likely to stay with a company that gives them what they need, when they need it.

Customers that feel valued will stick around longer than those who don’t. Create an environment where every interaction is meaningful, whether it’s in person or online. Make sure you know what makes each customer special so you can tailor your approach accordingly and make sure everyone feels included in whatever activity you’re doing together.

Your reputation matters too! If there are other companies out there competing for customers, make sure yours is known as the best option through word of mouth marketing tactics such as social media posts or even trust signals like reviews on websites like Yelp!.

Loyalty To The Brand

The advantages of relationship marketing for customers include:

  • They are loyal to the brand.
  • This loyalty is earned and based on trust.
  • The quality of the product or service plays a large role in this loyalty, but so does the quality of the customer experience.

Loyalty To The Products

This type of marketing has many benefits for customers, including:

  • A customer who is loyal to a product will be likely to buy the same product again.
  • If a customer is satisfied with a product, he or she will recommend it to others.
  • A happy customer feels more confident about buying from your company in the future.

Loyalty To Other Customers

  • You can build a community of customers who are loyal to each other.
  • Customers will feel like they belong to something bigger than just your brand, and that can make your product or service more compelling for them.
  • They’ll be able to share their experiences with one another through social media, blogs, and forums. Instead of just talking about your products, they’ll be talking about each other’s as well–which makes sense because it’s something that affects everyone in some way!
  • This also means that if you have new offerings coming down the pipeline (like a new version of an app), you can use this community to build buzz around it before its release date–and hopefully attract even more people into what’s going on at your company right now!

A Company With Values

In a relationship marketing context, values are important to your customers. They’re important to your employees and shareholders. They’re important to the community and environment in which the organization operates. What’s more, they can be used as an effective tool for driving engagement levels within the organization itself!

relationship marketing strategy

Today, technology has made it easier than ever to connect with customers. That’s a bonus for businesses, but on the flip side, sometimes the personal touch can get lost in the rush to outperform rivals and stay on top.

We all know customer retention is crucial for success, so it pays to focus on building relationships for the long haul. Personalized experiences based on a deep understanding of customer needs are the way to improve brand loyalty – and that’s where relationship marketing comes in.

What is Relationship Marketing?

Relationship marketing is an approach that puts the focus on customer experience to build trust and loyalty. It’s about creating and maintaining strong relationships and showing customers your business genuinely values their custom and cares about their needs.

The idea is to improve customer engagement at every stage of the buyer’s journey and delight them so much they wouldn’t even think about using your competitors. 

Although customer retention is the overall aim, relationship marketing treats existing and potential customers with equal respect.

A relationship marketing strategy uses a mix of tactics to promote long-term satisfaction and customer loyalty. Examples of relationship marketing include proactive customer service, loyalty programs, encouraging feedback, and promoting the benefits of a product rather than just its features.

Affiliate programs are part of relationship marketing, as they depend on developing close relationships with partners to boost brand awareness. Customers benefit from a diverse range of content across channels, which promotes company values as well as products.

Relationship marketing is beneficial for B2B as well as B2C, but surprisingly, only 24 percent of businesses currently use it as part of their wider marketing strategy.

Transactional Marketing vs. Relationship Marketing

So, we know that relationship marketing is a strategy for creating meaningful relationships and long-term customer engagement. Transactional marketing, on the other hand, is a more traditional approach that concentrates on acquiring the highest number of new sales.

With the emphasis on increasing traffic and conversions, transactional marketing encourages you to look for quick wins. Although the metrics are highly measurable and help you prove ROI, this form of marketing places less importance on the overall customer experience.

If you don’t prioritize great experiences and relationships, customers are less likely to stick with you after an initial purchase. But since customer acquisition cost (CAC) has gone up by about 60 percent in the past seven years, it makes sense to focus on customer retention.

Long-term customers are less likely to churn than new customers and will also praise your business to others. While transactional marketing gets more immediate results, successful relationship marketing is worth a lot in word-of-mouth recommendations. You’ll just have to wait a bit longer to reap the benefits.

Relationship Marketing Strategies

Here are the main elements you need for a relationship marketing campaign:

Prioritizing customer service

We all know customer service can be make or break, with 50 percent of customers saying they would switch to a competitor after just one bad experience. Excellent customer service is a vital component of relationship marketing, as it demonstrates that you care about people’s needs rather than just wanting their money.

Everyone involved in a customer-facing role should be fully trained in best practices. Representatives must remain polite at all times, even if the customer is being unreasonable. They must know how to placate angry callers and when to escalate problems to a manager.

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However, these are basic values that customers expect from a business. Relationship marketing takes things a step further by personalizing the whole experience and by being more proactive. You need an in-depth picture of your customers, their potential pain points, and the questions they might ask.

You’ll need the right tools to deliver great customer service, such as a CRM that puts customer details at your fingertips and a call management system to ensure speedy responses to inquiries.

Engagement

In relationship marketing, you’re not just encouraging a customer to buy something. You’re aiming to promote your brand values and position yourself as a trusted industry leader so customers want to engage with you on a human level.

You need to make it as convenient as possible for people to get in touch, whether via your website or social media. Thanks to the huge variety of communication channels available, it’s much easier for customers to engage with brands, but there’s also plenty of competition.

As well as maintaining a presence on a wide range of channels, the key is to provide content that holds people’s attention and makes your brand part of their lives. The more they interact with you, the more you’ll understand their needs, which gives you extra scope for personalization.

This could include sharing stories of how your business supports the local community and inviting customers to share their own content. You might even encourage super-engaged followers to join your company’s partner marketing program and promote you on their channels.

As we mentioned, relationship marketing covers all stages of the customer journey, so you should offer value to both new and existing customers. Think about brand awareness rather than immediate conversions—they may not be ready to make a purchase right now, but they’ll remember you when they are.

Social media 

Social media is ideal for relationship marketing, as there’s so much opportunity for interaction. You can provide regular content with plenty of visuals, show off your expertise, and build an online community of followers. If you partner with influencers, you’ll reach far more users by piggybacking on their popularity.

Encourage people to like or share your posts with incentivization, such as free offers and competitions. User-generated content, such as photos of people using your product, also gets people involved (as well as making sure you don’t lack for content ideas!)

Another tip is to include social media buttons in all your content marketing and emails, including each just-checking-in email, to direct people to your pages and make it easier for them to interact. However, be aware that social media users demand fast responses to any comments or inquiries.

Your social media marketing campaign should be in line with your brand personality and appeal to your target audience. For example, you might use LinkedIn if you’re targeting professionals or Snapchat if you want to come across as young and fun.

Email marketing

Despite the huge popularity of social media, email is still a great way to engage with customers. It helps you reach out to them directly, with your message landing right in their inbox instead of appearing among a heap of other content. (Of course, you can’t guarantee they’ll read it, but email does have a pretty solid open rate—and an ROI of $42 for every dollar spent.)

From welcome emails to regular newsletters to special birthday offers, email gives you the chance to say more than you could in a text or social media post. You can share links to your other content, which recipients can choose to discover at their convenience.

Using automation tools is ideal for email marketing, especially if emails are sent based on behavioral triggers like cart abandonment. Some software uses smart targeting to segment your audience and send the right emails to the right people at the right time.

Loyalty programs

Loyalty programs are a great way to make customers feel special. When you reward them for using your services, they know they’re a valuable part of your business. Reward schemes are also a great way to encourage engagement (and repeat purchases) for new customers.

You might offer a points scheme where people earn every time they make a purchase and get money off future transactions. Frequent flyer rewards would be an example of this. Or you could offer a reward after a certain number of purchases, such as buying five coffees and getting a sixth for free.

Another idea is to reward customers for referrals. When they recommend you to a friend, and that friend signs up to your newsletter or buys something, the customer gets a gift. You could do this by giving customers a set of unique codes to pass on to others, so you can track where the referrals came from.

Utilize surveys

If you really want to know how your customers feel about the experiences you offer, the best way is to ask them. Encouraging customer feedback is an important element of relationship marketing, as it lets them know their opinions matter. You also have to demonstrate you’re prepared to act on this feedback.

A simple way to manage feedback is to send out customer surveys. These might be CSATs (customer satisfaction scores), polls on social media, or longer questionnaires. Whatever you use, it’s best to keep them short—decide in advance what you aim to discover and create the questions accordingly.

Content

This marketing approach generates more leads than paid advertising, probably because it doesn’t seem so blatant. Even if you know the author is being paid, it still seems less biased than the company tooting its own horn. This is especially true if the writer is a known expert or influencer in the industry.

To build strong relationships, make sure content appeals to your target audience and provides value to them, such as helping them make the most of your services. Creating personalized content for specific customers shows how well you understand them. A diverse range of content on multiple channels will keep people engaged, especially if it’s easily shareable.

Implementing Relationship Marketing Strategies

When it comes to implementing these customer relationship strategies, you’ll need to bear in mind the following points: 

Customer data

Because relationship marketing involves understanding your customers, you need to collect as much information about them as you can (while staying compliant, of course). As well as gathering personal data such as birthdays, track past purchases, browsing habits, and previous interactions.

To stay on the right side of compliance laws, take advantage of zero-party data. What is zero party data? It’s information customers actively choose to share with your business through things like surveys, polls, and registration forms. Most customers are happy to provide this if they get something in return.

Customer data also allows you to check which of your campaigns are working and to test different options. Smart software with business intelligence makes it easy to track metrics like customer lifetime value, conversion rate, and website traffic.

Great CRM tools

On the subject of tools, you’ll need CRM software to make a success of relationship marketing. These tools, which include solutions like Hubspot, help you catalog customer interactions and manage data to deliver personalized experiences.

By centralizing the data and making it accessible to the whole team, CRMs give marketers and customer service teams instant insights into customer preferences. Whether you’re sending targeted emails or handling an ongoing complaint, you’ll have the information you need.

CRM tools also help you automate your marketing efforts. This might not seem very personal, but it’s the only way to keep up with a large customer base and make each one feel important. For example, it ensures you don’t forget to send birthday greetings or renewal notices.

Customer presence facing

Customers need to know you care, and that includes being available to answer inquiries at all times. If you’re operating on multiple channels, ensure there are designated employees to handle each method of communication so there are no delays.

It should also be easy for people to get in touch—customer satisfaction will take a hit if they have to scour your website to find contact details. Make it seem like you want to hear from them. Consider a toll-free number to encourage calls.

The right tools go a long way, including things like digital voicemail and call forwarding to pick up inquiries when you’re out of the office. This means you won’t miss an opportunity for meaningful interaction.

Challenges in Relationship Marketing

Despite its many upsides, relationship marketing does have some inherent challenges. These include: 

Adopting omnichannel methods

It’s good to reach customers on all platforms, but there are challenges involved. Every channel must be monitored so customers aren’t left waiting for a response. You also need to be confident that all content fits your brand values, especially if you’re using affiliate networks and influencer marketing.

The more channels you have, the more customer data you’ll be able to access, so make sure you have the means to collate and analyze this with intuitive dashboards and reports. Look for software that helps you track campaign performance and monitor links in affiliate content to see what’s working.

Responding to customers quickly

According to one report, 46 percent of customers expect companies to respond in less than four hours, while 12 percent expect a response within 15 minutes or less. 

Meeting these high expectations can be tricky when you have a high volume of inquiries, especially for small teams, but it’s essential in relationship marketing. Tools like call management and CRMs can help.

Personalized content

The trick here is to make every customer feel like they’re your priority, but it can be hard to keep track of everyone’s details and preferences across multiple channels. Plus, you have to be mindful of data compliance regulations.

To help personalize content, use smart targeting tools to segment your audience. For email marketing, include links to other relevant content (blogs, webinars, listicles) you know the customer is interested in, as well as sending messages based on triggers like browsing patterns.

Rekindling the interest of previous customers

Although relationship marketing is big on retaining current customers, you can demonstrate the caring nature of your business by trying to re-engage people who’ve slipped off the radar too. The challenge is to find out why they lost interest, and see what you can do to win them back.

Incentives like a free sample or gift can be useful, as can cart abandonment emails. It’s also good to be proactive—for example, sending a message well before someone’s subscription expires, as it’s much harder to get them to renew after the fact.

Company-wide adoption

You need buy-in at all levels of the company if you’re going to make relationship marketing work. Everyone must be dedicated to making customer happiness a priority, and the challenge is to make people understand why it’s so important. 

All departments should be on the same page to ensure consistency, so you’ll need regular catch-ups to monitor how things are going.

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Relationship Marketing: Definition, Types & Benefits – Tipalti

Published: March 26, 2020

Full Article

Acquiring a new customer is 5 to 25 times more expensive than keeping those you already have. A business that consistently shoots for new acquisitions as their primary sales objective, will inevitably fall short with modern consumers. The less you prioritize people, the less they will buy from you.

Modern customer relationship management is about forming long-term relationships and treating the buyer as a unique individual. The more a brand focuses on customer experience, the more likely buyers will do business. It also creates a higher level of brand loyalty, which means, if/when you mess up, people are much more forgiving.  

A customer that is fully engaged exhibits 51% higher revenue and sales than an actively disengaged customer. In order for a company to succeed, you must provide a deeper emotional connection. This is where the business strategy of relationship marketing is highly applicable.

What is Relationship Marketing?

Relationship marketing was developed to foster consumer loyalty. Unlike customer acquisition that focuses on short-term goals and individual sales, relationship marketing is aimed at enhancing customer lifetime value and providing information directly suited to their needs and interests. This involves a marketing plan that focuses on customer retention and satisfaction over transactions. 

Did you know that 20% of your current customers will account for 80% of your company’s future revenue? Additionally, customers who are fully engaged always spend more. It’s a natural progression in the buyer journey. This entire strategy is about nurturing customer loyalty and paying attention to your existing customers. 

Different Types of Relationship Marketing

Marketing efforts have changed drastically in the past few decades. Now, in order to build relationships, the entire process happens in stages; each with a higher level of commitment. There are different levels of relationship marketing that include:

Basic Marketing

This is the traditional form of relationship marketing in which a brand works to entice the customer to buy. The focus is on the product or service being sold and how great it is. This is a form of direct selling with no follow up after purchase and no further communication or feedback requested. This style reels people in with a simple message, price, or promotion. It’s a sell for the sake of making money, and nothing more.

Reactive Marketing

At this level of commitment, a brand actively seeks feedback from customers. Whether it is a compliment, complaint, suggestion, or product idea, a business is open to it with reactive marketing. There is some effort here to build a relationship with the customer when the situation or opportunity arises. This is not a typical digital marketing technique. It is inbound marketing focused on purchase reactions.

Accountable Marketing

This level of relationship marketing is about promising and delivering. It continues the buyer’s journey after purchase and puts a spotlight on retention strategies. This involves checking with customers after they purchase and offering related products as they arise. Loyalty programs are also a strategy used in accountable marketing. 

Like a friend calling to see if you need anything, accountable marketing is about having confidence in what you offer and actively providing solutions to problems—sometimes before people even know they have them. This is also the time to ask for customer feedback and make the appropriate actions accordingly.

Proactive Marketing

This is a form of relationship marketing where a brand keeps consistent tabs on its customers to build effective relationships. It’s not a one-off sale or a tempory interaction. The strategy is very personal. It pays close attention to customer wants and uses data to understand purchasing behavior.

A lot of companies choose email marketing as a way to perform proactive marketing. The data is then used to produce more engaging marketing campaigns. The accumulation of consumer information allows a business to relate to a multitude of situations in an authentic way.

One prime example of proactive marketing is virtual assistants like Alexa. They keep close tabs on what a customer desires and then make suggestions at opportune moments. 

Partnership Marketing

This is a form of relationship marketing with a high level of collaboration. Two businesses work together in a mutually beneficial and promotional relationship towards a common goal. It could be for a specific campaign, product, or set amount of time. It enables both companies to increase brand awareness and improve sales. Partnership marketing is a great strategy for small businesses or startups. 

One prime example is the partnership between Microsoft and Nokia. Microsoft develops the Windows operating system that runs on Nokia Lumia devices. It’s strategic relationship marketing between a software and a hardware company where all parties win.

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Why is Relationship Marketing Important?

The foundation of your customer base depends on it. Relationship marketing is important for business because it better defines an audience and gives you the ability to stay in close contact with customers. These are the people who offer invaluable information that can steer your business in the right direction.

By understanding how people use a new product/service and observing unmet customer needs, a business can offer additional features to create a deeper level of satisfaction. This further strengthens the relationship.

This tactic is about repeat customers and focusing on the long haul. You want these people with you for the ride. Let them know. This type of marketing helps to earn referrals too because when your customers are happy, they tell other people. It boils down to building relationships that encourage customer loyalty and keep people coming back.

The most successful brands are the ones who work hard to know their audience, and speak to them like friends.

The Top Benefits of Relationship Marketing

There are many advantages to focusing on personalization in your customer interactions. Relationship marketings can:

This type of marketing, which relies heavily on word-of-mouth promotion, is the opposite of transactional marketing. That system ignores the ramifications of a relationship and goes straight to making a sale. Developing a robust relationship marketing strategy is the first step to building strong relationships with long-term customers. 

This is not about maximizing the efficiency of sales. Quite the opposite. It’s fundamentally about showing people a brand is more than a business. It’s an entity that values customers and strives to give them what they want. Relationship marketing is as simple as showing loyal customers you genuinely care.

how does relationship marketing affect the customer

Relationship marketing is strategy that emphasizes customer retention, satisfaction, and lifetime customer value. Relationship marketing can be defined as marketing to current customers vs. new customer acquisition through sales and advertising.

As opposed to transactional marketing’s focus on one-off sales, a good relationship marketing strategy is rooted in building customer loyalty and lasting, long-term engagement with your customer base. Benefits include increased word-of-mouth, repeat business, and a willingness on the customer’s part to provide valuable feedback to the company.

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What’s the value in relationship marketing?

Opportunity and upside have to drive decision-making, so the question remains: why bother marketing to current customers? What are the potential benefits?

According to a study by Robin Buchanan and Crawford Gillies, the increased profitability associated with relationship marketing is the result of several factors:

There were also some less-obvious benefits noted in the study, such as the fact that companies with strong loyalty measurements are more capable of shutting out new competitors and generally don’t have to worry about competing products as much.

The not-so-surprising “secret” here is that relationship marketing has everything to do with practically useful engagement with customers. In fact, a national consumer survey conducted by TARP Worldwide found most customers place a high value on consistent service and helpful recommendations on new information and products.

For customers who do want to engage with your brand, they’re mainly concerned about how much value you provide outside of your product. And although relationship marketing is tough to completely define and differs from company to company, there’s an umbrella of activities you should know about:

1. Customer service

No matter how high tech relationship marketing becomes, the high-touch elements of personal support will always be the foundation that excellent customer service is built on.

The cornerstones for providing memorable customer support are reciprocity and personalization. To achieve these ends, it’s necessary to create clear relationship marketing goals and guidelines that don’t leave people encumbered with red tape.

To get started, we recommend you read the following guides:

Remember that the companies who truly lead the way in exceptional service have this goal ingrained in their culture, so make sure you take the time to invest in employees who get why it’s important to take care of customers.

2. Content and customer education

“What if businesses decided to inform, rather than promote? You know that expression ‘If you give a man a fish, you feed him for a day; if you teach a man to fish, you feed him for a lifetime?’ The same is true for marketing: If you sell something, you make a customer today; if you help someone, you make a customer for life. In every business category, one company will commit to being the best teacher, and the most helpful. And that company will be rewarded with attention, sales, loyalty and advocacy by consumers who are sick to death of being sold, sold, sold.” Jay Baer, author of Youtility

Content marketing is such a hot topic right now that calling it a hot topic has itself become a trope. But there’s a reason for this.

Traditional paid advertising, the standard interruption marketing method, essentially rents eyeballs or clicks for your business. Once the money stops flowing into those channels, the results stop, too.

By contrast, content marketing allows you to build an audience that you can keep. It should not be viewed as a traditional marketing expense since the returns for evergreen content will last as long as the thoughts stay relevant.

But content and relationship marketing as a whole go far beyond acquisition. Using content as a form of support is also marketing. Free resources, help documentation and webinars can marketing to customers as long as the content is educational, enjoyable, and motivational.

3. Social media marketing

If you can get past the hype, social media can truly be a useful channel for creating relationships with customers.

There are multiple approaches to using social media in relationship marketing, all of which need to properly reflect your brand’s values. As an example, see how FedEx has used social media to build trust and prestige with customers and to successfully resolve issues:

“Even though FedEx does online listening, Sauerwein’s team is the one responsible for handling actionable requests that customer care follow-up to help solve the issue or answer the question. Their engagement time? Mostly in a matter of minutes.”

Conversely, brands like Taco Bell who, let’s be honest, aren’t catering to a professional B2B audience, focus more on connecting with customers through humor. The result: Their Twitter account has become one of the most popular online corporate accounts.

Building relationships through social media is about knowing your customers and creating a social media presence that reflects what they want to see from you. If you’ve earned the right to appear in their streams, keep it by giving them content that they actually want.

4. Email marketing

“Email is still one of the most powerful relationship marketing mediums, as it is just so personal. At work, many employees spend 2 ½ hours in their inbox—that’s a lot of time. Incorporate this channel by delivering free course content and product updates via email. A consistent stream of genuinely useful content will guarantee that your campaign is really effective—and it’s something that business owners have never been able to deliver over display ads or social networks.” Chris Hexton, co-founder of Vero

There’s a reason every social network in existence asks for your email when you sign up: Email is still one of the best ways to turn a casual browser into a repeat user, and there’s lots of data to back that statement up.

An engaged email list is a powerful relationship marketing channel for both customers and leads/prospects. One benefit of email that isn’t often mentioned is that you rarely have to compete with fun over email. On Facebook I wish your company updates the best of luck, because you’ll be competing with BBQ and vacation photos.

What’s the point in creating useful resources for customers if they never hear about them? Having a clear, distraction-free channel to notify customers of these offerings is how you can elicit responses like this:

This may become a weekly tweet. Consistently amazed by the fantastic free resources @helpscout emails. Own a business? Go sign up. Now.

— Preveal (@preveal) May 1, 2013

5. Loyalty programs

Creating “sticky” customer loyalty programs is no easy task, but successful programs show that it’s more than worth the effort.

As with every aspect of relationship marketing, creating a great loyalty program starts with knowing what your customers want and what they want to do in order to get it. Oftentimes this is simply buying more of your products.

Here’s a quick 3-step rundown of how to angle any loyalty program toward customers’ needs:

A slightly unusual example of the last point can be found in relationship marketing programs from companies like Neiman Marcus:

This program may seem absurd to the average business, but when you are a luxury brand like Neiman Marcus and your customers regularly reach such numbers, it just makes sense.

6. Customer surveys

“Most people don’t understand that relationship marketing is about helping customers. I’ve learned that the best way to find out how to help is by using surveys. By regularly using both standard surveys and targeted micro-surveys, we’ve gained a deep understanding of what customers want. We’ve even gathered feedback for non-product related concerns, such as what content customers would find most useful.” Ruben Gamez, founder of Bidsketch

Customers are far more willing to offer feedback to businesses they know, like, and trust.

Of the many methods to gather feedback from customers, surveys offer the best way to approach customers on a large scale. As Gamez mentions above, surveys can be useful to gather a sense of a majority opinion for an upcoming decision (like what sort of content customers might enjoy most).

When you conduct smart, regular surveys with your customers, you’ll take a lot of the guesswork away and end up with insightful data that you can use to make your next move.

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