A marketing philosophy that puts customer satisfaction first, relationship marketing aims to deliver more sustainable and profitable corporate customer relationships. The first relationship marketing programs date back to the 1980s, when retailers and service providers began to move beyond transactional marketing theories and toward customer loyalty and the new idea of the customer journey. Creating a continuous relationship with consumers, from prospect to customer, became a priority for companies that opted for this type of marketing, which was revolutionary compared to traditional marketing.
By providing a human-to-human relationship and more meaningful customer experiences through personalized messages, companies are able to develop closer and more lasting relationships with their prospects and customers. Not only does this encourage customers to return, increasing customer lifetime value, but it also improves the company’s reputation, and attracts new leads. Closer customer relationships also help companies better identify the type of experiences, products and services that customers really want.
What is relationship marketing?
Relationship marketing is based on building ongoing relationships with customers. This marketing concept is based on the idea that a stronger relationship between a customer and a company will undoubtedly lead a customer to spend more money with the company, and a prospect to engage more easily with the marketing package implemented by the company. In addition, the witnesses of these customer interactions – your future prospects – who see the benefits of this relationship will want to engage with the company in question even more.
However, there are some challenges with relationship marketing. First, it can be difficult to track customer relationships across all touchpoints in the buying journey. This is why it is essential to use CRM (Customer Relationship Management) software, a type of platform used today by all marketing teams to measure and manage their relationship marketing actions and strategies. In fact, the CRM tool and relationship marketing are inextricably linked: relationship marketing represents the philosophy to be followed, while CRM is used to implement it.
Through CRM and relationship marketing, companies are able to encourage customer retention, which is much less expensive than acquiring new customers. As your customers become strong advocates of your brand, a real communication weapon is put into action: word-of-mouth spreads and your company’s reputation grows among consumers.
Customer satisfaction grows during the relationship marketing efforts your company produces, and the buying journey created by your marketing team also provides data and information on how best to reach customers. As your relationship marketing strategies are built, you will benefit from new resources that can be optimized and reused.
Over time, your company’s marketing efforts will support a higher customer lifetime value. Customers are more willing to engage with a company they find trustworthy, and loyalty ultimately leads customers themselves to attract new consumers to your brand. In addition, satisfied customers cost businesses less because they are less likely to complain and make complaints.
The importance of relationship marketing for your business
How does nurture marketing directly impact a company’s sales and marketing objectives?
Basically, relationship marketing gives your company the ability to increase its revenue.
Here are all the benefits your company can gain from a relationship marketing strategy in more detail:
Customer loyalty (and therefore a lower attrition rate)
Generation of a high-value, high-potential customer base, with customers making more transactions individually
Reduced costs for your marketing and communication campaigns, while at the same time increasing the word-of-mouth phenomenon
Better insight into what your customers want through a deeper understanding of their experience within your buying journey
Stable and sustainable growth through a more reliable customer base
The link between relationship marketing and revenue growth is well founded.
In order to implement and develop a relationship marketing strategy in a company, a program of seminars, conferences, and trainings on the importance of relationship marketing must be created. This type of marketing must be developed from within, because it is primarily your employees who will develop this customer-centric corporate culture.
As you can see, the role of relationship marketing is to determine what customers want and to provide it to them. It is a cost-effective way to connect with your customers and prospects in a very personal way. In B2B sales, this is even more important, as B2B buyers tend to be very invested in their business relationships when evaluating products/services and new partners.
The main advantages and disadvantages of relationship marketing
We’ve already mentioned some of the benefits that your company will gain from a relationship marketing strategy, but if we had to summarize, here are the three biggest benefits that such a strategy could bring you:
Shorter time to close deals with your prospects
More validated transactions/more customers
Better retention of your customers
These are the main advantages of relationship marketing, but what are the disadvantages?
A relationship marketing plan takes a lot of time to set up. For one thing, your employees will need time to build a special relationship with customers, and for another, large volumes of data and interactions need to be collected to determine if your business is headed in the right direction. To receive the dividends of a relationship marketing strategy, you have to be prepared for long-term efforts.
And, let’s face it, companies that sell a product once to a single customer, or that focus on quantity of sales rather than quality, may not have much incentive to invest in relationship marketing.
For you, the question is whether the benefits generated by relationship marketing outweigh the drawbacks.
Yet, despite the above-mentioned disadvantages, most companies will find that this type of marketing brings amazing results, probably because for most of them, customer satisfaction and loyalty remain key elements of success.
Tactics for your relationship marketing
There are many relationship marketing tactics that can be implemented depending on what is important to your business. Regardless, any marketing campaign should be tailored to your business goals.
Here are some tactics you can try:
Content marketing campaigns
This is the least interactive relationship marketing technique, but it can create a strong connection with your audience. Content marketing campaigns focus on building relationships with your prospects and customers and establishing an authority in a specific field by providing important and vital content and information that meets their needs and expectations.
This type of marketing campaign develops a one-sided relationship, but can have a strong impact on several customers at once.
Relational campaigns via social media
Social media allows you to interact directly with your customers and prospects one-on-one, via messages and posts, which makes it a very powerful, effective, and high-visibility relationship marketing technique.
Reward customer loyalty
Rewarding your existing customers is a way to improve your relationship with them and keep them for a long time. As these loyal customers continue to make regular purchases, you should reward them with discounts and special offers.