5 Big Benefits of Relationship Marketing
The marketing industry never ceases to amaze me. ‘Relationship Marketing’ is now a buzzword! There’s me thinking that developing strong, long-term relationships with customers has pretty much been the job of brands and agencies alike since Stephen King was first dipping his quill in ink.
To my mind, relationship marketing is all about creating meaningful, two-way conversations between the brand and the consumer. Interact and engage with customers and prospects on all channels; encourage feedback; provide exceptional customer support. Monitor what is being said about your brand online.
Depending on your agency, your customer marketing might have become so clogged with fluff that it’s hard to define the value it delivers. At Fireworx, we’re pretty clear of the benefits we should be focusing on when building a relationship marketing strategy.
1. Boost customer loyalty
The longer a customer stays with a brand, the more valuable they become; according to Real Results marketing, even a 1% annual increase in customer retention can add up to a 20% increase in annual revenue! Building relationships with your customers nurtures their loyalty, helping you to retain them, and their business, in the long-term.
2. Increase the chance customer referral
We may be living in the digital age, but word of mouth is still the most powerful marketing technique around. According to Nielsen research, 84% of consumers say recommendations from family and friends is their most trusted source of information when making a purchase. By strengthening your customer relationships, you’ll boost their satisfaction and loyalty – making them more likely to refer you to someone else.
3. Grab those feedback opportunities!
We could all use a little feedback or constructive criticism. With a happy, loyal customer base, you’ve got the perfect test market for trialing new products or services, or just to let you know how you’re doing. Your long-term customers can provide valuable feedback on your strengths, weaknesses, and areas for improvement – so listen to what they have to say!
4. It’s easier to introduce change
No company likes to introduce changes that could risk losing customers, such as price increases; but a solid relationship marketing strategy can help to soften the blow and make these transitions go down more smoothly. If you have loyal customers, they’re invested in your brand and are less likely to ditch you at the first sign of change.
5. Improve your marketing efficiency
As a rule of thumb, retaining an existing customer costs around a third of recruiting a new prospect. It stands to reason; you know them, what they like and how to contact them. As such, increasing your retention by even 1% can enable you to reduce your acquisition budget significantly. Existing customers are also less likely to put less strain on your customer support functions than a new prospect.
These savings all add up to create a tidy test budget for trying out new ideas that could help you better engage your customer base in the long term.
Good relationship marketing is profitable!
If you keep those 5 benefits at the front of your mind when planning your customer marketing strategy, it’s likely you won’t go too far wrong. At the end of the day, no matter our industry, we’re in the business of driving profitable engagement with customers. But remember; a strong relationship requires both parties to invest in it equally!