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What Is Relationship Marketing?

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What Is Relationship Marketing?

Life is all about relationships—and so is business—which is why relationship marketing is so important. But what is relationship marketing and how does it work? Here’s everything you need to know to start using it in your business:

What Is Relationship Marketing?

Relationship marketing focuses on monetizing customer relationships. It is a component of customer relationship management or CRM wherein businesses try to achieve customer loyalty by building long-term relationships with customers. Not only does this increase your customer lifetime value, but it can be transformative for your referrals and word-of-mouth promotion.

This is in contrast to traditional marketing methods that only focus on gaining business from customers in the short term. Instead, relationship marketing realizes how valuable loyal customers can be to a business and works to not only win customers over initially but to keep them coming back again and again. 

How Does Relationship Marketing Work?

Relationships are all about mutual understanding and compromising to meet the other’s needs—and this is essentially how relationship marketing works. Companies work to understand the needs of their customers before coming up with strategies to meet those needs with the goal of building positive, loyal, and long-term relationships with them. 

Strategies vary depending on the needs and wants of the customer, but most relationship marketing strategies involve some combination of customer service initiatives, email marketing, social media marketing, content marketing, customer education, and word-of-mouth. 

What Are the Benefits of Relationship Marketing?

While the long-term payoff of relationship marketing might be harder to grasp than that of traditional marketing, it’s actually quite useful thanks to these benefits: 

  • Higher customer retention rates: The goal of every company should be to retain their customers since it’s often more cost-effective to retain an existing customer than to acquire a new one. Relationship marketing can help to boost your customer retention rates—saving you money in the process. 
  • More sustainable business strategy: It’s hard to experience true success as a business when you’re always scrambling to obtain new customers. However, with relationship marketing, you can continuously build a strong base of loyal customers whom you can depend on.
  • Obtain valuable feedback: The feedback that you gain from relationship marketing can benefit your business in more ways than one. Of course, you can better satisfy your customers, but odds are that you can also use this feedback to innovate your products, cater to your employees, and build a better overall business. 
  • Increase sales volume: Now that you’ve improved your business and are meeting customers’ needs, you can increase your sales volume through tactics like cross-selling and up-selling that work best with informed, satisfied, and loyal customers. 
  • Better compete with other players: It can be difficult for smaller and newer businesses to compete with larger and more established ones without relationship marketing. This strategy is designed to help you take advantage of your existing customer base and make sure that customers are loyal to you—not your competitor.

What Are the Different Types of Relationship Marketing?

There are five different types of relationship marketing, including basic marketing, reactive marketing, accountable marketing, proactive marketing, and partnership marketing. Here’s what you need to know about each type so that you can incorporate the best ones into your relationship marketing strategy: 

  • Basic marketing: Basic marketing is, unsurprisingly, the most basic type of relationship marketing and should be the foundation of your strategy. Within this type, you focus on acquiring clients and guiding them through the sales journey. 
  • Reactive marketing: Reactive marketing involves receiving feedback from a customer after a sale is made so that you can continue to build a relationship and improve your business based on the feedback gathered. 
  • Accountable marketing: Accountable marketing takes reactive marketing to the next level, wherein businesses reach out to customers for suggestions on how they can improve their customer experience. 
  • Proactive marketing: Proactive marketing involves taking these suggestions into account and taking action to improve the quality of the business’ products and services so that customers can enjoy the best possible experience. 
  • Partnership marketing: Partnership marketing involves collaborating with other businesses with the intent of improving everyone’s products and services based on gathered customer information. 

Basic Components of Relationship Marketing

Every relationship marketing needs to include these three basic components: customer service, customer feedback, and customer loyalty programs. 

Component 1: Customer Service

If you want to bond with customers, you need to support them every step of the way. Before you officially gain a customer, you should make it easy to contact you so that any questions can be quickly answered. One of the best ways to do this is to incorporate a chat feature onto your website—whether live or automated—so that customers can obtain the information they need to feel confident about making a purchase. 

You need to continue supporting customers after they make a purchase with easily accessible communication channels. Embrace a wide variety of different channels, including social media, email, phone, and even SMS

Component 2: Customer Feedback

Another great way to build relationships with your customers is to collect customer feedback on a regular basis. Send out customer feedback surveys after every purchase to learn more about their overall experience with your business. Incentivize these feedback surveys with coupons, giveaways, or freebies. 

But the work isn’t over after you’ve gathered the feedback—you actually need to use it. If there’s a common theme that many customers are mentioning in their feedback, this is a great place to begin with an improvement plan. 

Component 3: Customer Loyalty Programs

Finally, you may want to consider implementing a customer loyalty program as a part of your relationship marketing strategy. Some of the largest and most successful companies have customer loyalty programs, and you can too! There are several different types to choose from. 

However, most customer loyalty programs consist of a points system wherein customers can earn points based on how much they spend at the business. They can then spend these points on products, events, contests, etc. 

How To Launch a Relationship Marketing Initiative

While relationship marketing seems like a no-brainer, it can also be challenging to actually launch a successful long-term strategy for relationship marketing. However, with the right approach, you can make it happen. 

Step 1: Know Your Customers

It’s hard to build long-term customer relationships without first getting to know them. You need to learn who they are and what they want so that you can then meet these needs. The best way to do this is through market research. 

First, figure out who your customers are. If you already have an established customer base, then it should be easy to make this determination since you can just look at your current customers. If you don’t, you can consider the customer base of your competitors. Alternatively, you can think about who your products or services are designed for, who they help, and who needs them. 

From there, you need to figure out what your customers care about and what they want in a product and a business. Using tools like focus groups and surveys, you can obtain the answers to these questions and build strong relationships.

Step 2: Train Your Employees

Contrary to popular belief, engaging customers isn’t the only part of the relationship marketing equation—employees are equally as important. So in order to launch a successful relationship marketing initiative, your employees need to be included in your efforts. 

The best way to include your employees in your relationship marketing strategy is to properly train them in the different components of your strategy. For instance, if you’re launching a customer loyalty program, your employees need to know the ins and outs of this program so that customers can properly obtain their points and rewards. 

Step 3: Empower Your Employees

It’s not enough to just train your employees, you also need to empower them. Sometimes, it can be difficult for employees to properly address customer complaints because they aren’t authorized to do so. We’ve all been given the “let me talk to my manager” line that only delays problem resolution. 

So instead of only causing more delays and confusion, give your employees both the knowledge and the ability to solve problems. When employees can address issues immediately, customers will feel heard and will want to continue their relationship with the company. 

The Best Relationship Marketing Techniques To Follow

Here are some of the best relationship marketing efforts to help you develop and maintain a successful brand loyalty strategy.

1. Prioritize Customer Service

Unsurprisingly, you really need to prioritize customer service when trying to build relationships with customers. Customers could totally love your product but if they experience horrible customer service, they’re unlikely to buy that product again. On the other hand, a great customer experience can turn a one-time-purchaser into a lifetime customer. Make sure that you’re responsive and reachable on multiple different platforms including Facebook, Instagram, your company website, and more. 

2. Make It Personal

One way to create deeper relationships with your customers is to get personal in your customer interactions. Buyers don’t want to feel like they’re just another buck to you. Instead, they want to feel like you know and care about them. Use their names when communicating with them. Provide them personalized product recommendations and discounts based on previous purchases. Include hand-written thank you notes with orders. 

3. Go Above and Beyond

The last way that you can truly take advantage of everything customer relationship marketing has to offer is to go above and beyond with your customers every time. After all, you’re not the only company out there using relationship marketing—your competitors are likely using it as well. This means that a basic customer satisfaction strategy won’t cut it. Instead, you need to go that extra mile by offering each customer the very best in each interaction. 

Wrap Up on Relationship Marketing

A lot of time and effort goes into developing a successful relationship marketing strategy by combining components like content marketing, data insights, social media marketing, email marketing, and more. 

Understandably, relationship marketing campaigns can be difficult for small or new businesses to handle on their own—which is why MuteSix is here to help with performance marketing tactics and strategies that cover all of these different aspects and more. So, reach out today for a complimentary marketing consultation to see how we can help you develop and maintain a successful relationship marketing strategy for your brand. 

Sources:

How to Increase Client Retention: 10 Effective Strategies | Forbes

7 Innovative Customer Loyalty Programs (+ How to Start) (2021) | Shopify

9 Tips for Providing Excellent Customer Service | The Balance Small Business

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