Did you know a 5% increase in customer retention can lead to a 95% increase in profit? With statistics like that, there is no denying the importance of building and nurturing your brand’s relationships with its customers. The best way to create these strong, long-lasting connections is with relationship marketing.
Read on as we discuss everything you need to know about relationship marketing.
What is Relationship Marketing?
Relationship marketing is a strategy that creates and maintains meaningful relationships with customers. It does not focus on short-term strategies such as increasing sales – rather, it adds value to customers’ lives and motivates them to trust and engage with your brand.
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Why Relationship Marketing Matters
Having loyal customers that support and engage with your brand is already enough to indicate that a strong relationship marketing strategy is important, take a look at 3 ways your brand can benefit below:
It is Cost Effective:
As mentioned earlier, retaining customers is far more profitable than acquiring new, once-off customers. Loyal and connected customers will happily purchase new or existing products because they trust you and know the quality of your goods – They are also more likely to spend more on each purchase.
It Increases Referrals and Brand Awareness:
Loyal customers are more likely to become brand advocates that will spread the word about your brand. Word of mouth is one of the most powerful forms of marketing, so it is excellent for referrals and introducing your brand to new people.
It Differentiates your Brand from Competitors:
Not all companies actively engage with existing customers unless the customers reach out to them. By nurturing relationships with your customers, you are giving them something that they cannot get elsewhere – a unique brand experience.
Spotify has managed to differentiate itself from other music streaming platforms by creating highly personalised experiences driven by data. The Spotify Wrapped feature, a yearly interactive slideshow that shows your top artists, songs, genres, and more which excites and engages customers by giving them insight into their music taste that they cannot get anywhere else.
Learn how you can Drive Business Performance with Data-Driven Marketing
Creating a Relationship Marketing Strategy
There is no one size fits all approach to relationship marketing. The strategy that works will depend on the nature of your business, your target market, your reputation, and more. Follow these steps to help you get started:
Listen to the Customer
Regularly ask for feedback about your products, how you communicate, and what your customers like or dislike – and then act on the feedback. Asking your customers directly makes improving their experience easy and effective. This will also show your customers that you care about them and their experience with your brand, making them feel valued thus strengthening the relationship.
A customer relationship management (CRM) tool can help you manage all the information you have about your customers. From general demographics to their buying patterns, CRM Software can provide you with insights that drive effective personalisation. Automated chatbots can also improve the customer experience and quickly answer customer queries. Build Online Communities
You can create an engaged community using social media or email marketing methods. A welcome email can be used to create value for new customers by offering a once-off promo code or an exclusive deal – laying the foundation for a mutually beneficial relationship and showing customers that you care.
You can take the relationship further with email by sending out newsletters. This is an efficient way to keep your customers entertained and informed about any brand-related news.
Grammarly’s weekly progress report and tips are a fitting example of how a brand can excite and engage customers through email. Grammarly informs its users of how many words they wrote, common mistakes they made, what those mistakes were, and more. The goal of this email is not only to engage their customers but also to retain them. By sharing all these insights with customers, it shows them why the product is so valuable and worth using, this is exactly why email is a great tool for relationship marketing. It can serve as a gentle reminder of how and why you add value to your customer’s life.
You can also connect with your audience on social media by posting content that relates to them and adds value. It is also a central place to stay up to date with current trends, get involved in public conversations with customers and other brands, and react when something happens involving your brand or customers.
Implement Loyalty Programmes
According to Send Pulse, 79% of customers will become repeat customers because of a company’s loyalty programme. Be sure to create a programme that appeals to your customer’s emotions and creates an enjoyable experience that will get them involved.
A very well-known example of a loyalty programme is the Starbucks Rewards programme. Starbucks makes use of incentives and personalisation to deliver a truly unique experience for each customer. This programme is responsible for 53% of Starbucks customers’ in-store spending and has become one of the most well-known rewards programmes amongst brands – certain restaurants and coffee shops are even remodelling their loyalty and rewards programmes to include personalisation and incentive features.
Begin Building Life-Long Relationships
Are you ready to improve your customer’s experience and create long-lasting relationships? If the answer is yes, use the tips outlined in this blog, mould them to your brand and watch your relations transform!
And remember, relationship marketing is not a once-off strategy you can implement and immediately see results, it’s a plan you continually and actively need to work on to get right.