Why Relationship Marketing Matters

relationship marketing

We live in a time defined by the drastic shift in how we form and enact relationships. Years ago, almost every social or economic interaction was done face to face. Those times are long gone, we now form and maintain many of our relationships through technology, and the same goes for business transactions, resulting in the emergence of relationship marketing.

The way we shop now is a world away from what it was like even as much as a decade ago. Single-click orders, next day deliveries and split payments are the expectation for consumers who are used to instant gratification as a result of our digital world. In January 2020, around a fifth of total retail purchases were made online, a figure that is still on the rise as time goes on.

Despite the upside, the way in which most of us chose to shop is inherently impersonal and is often something we’ll do independently. A lack of individualisation paired with the sheer abundance of choice means that loyalty is usually the first thing to waver.

With one report showing that 64% of UK consumers are actively looking for new trends, it’s essential that businesses are able to deliver an online experience that builds loyalty within its existing customer base and is able to turn a new customer into a loyal one.

This can be achieved through relationship marketing, which covers multiple aspects of improving your relationship with the customer as they move through the sales funnel. But what is it, and why does relationship marketing matter?

What is relationship marketing?

Relationship marketing is a vital component of any successful business that wants to retain its customers as well as being able to create a new, loyal following.

According to HubSpot, relationship marketing is:
“A type of marketing that focuses on cultivating deeper, more meaningful relationships with customers to ensure long-term satisfaction and brand loyalty. Relationship marketing is not focused on short-term wins or sales transactions — rather, it is focused on delighting an audience and your customers for the long-haul.”

Ultimately, it’s all about going above and beyond in meeting the needs of the customer to build a positive and loyal relationship over time.

Why do you need to prioritise relationship marketing?

It’s widely known that retaining customers costs far less than it does to acquire new ones; in fact, 82% of companies agree that’s the case. Other figures are pretty compelling, too- increasing customer retention by just 5% boosts profits by 25% to 95%.

As a result, most businesses should be balancing their focus on attracting new business with sustaining the business that they already have.

You can carry out relationship marketing through a range of actions for each stage of the marketing funnel, whether that’s having well-trained staff on a live chat with customers at conversion, a first-time buyer offer at acquisition, or a loyalty scheme to keep them coming back for the retention stage.

All of these actions have a positive impact on the relationship you have with your customers and the way they feel about you. If a customer has only positive things to say about a brand, the chances are they’ll be recommending you to friends and family.

However, it’s best to define a strategy, so this can be done effectively.

What strategy should you use?

Relationship marketing strategy:
Provide tailored customer service
Communicate and engage with the customer wherever they are
Offer incentives and rewards
Create something of value in the form of informative and engaging content
Obtain regular feedback

But what does this look like in more detail?

Providing tailored customer service

56% of customers stay loyal to brands that ‘get them’. This means that every stage of the customer journey needs to be personalised to the individual on it. This can be a challenge with the automated aspects of relationship marketing, but even that can be overcome by further segmenting your customer base and targeting specific messages to specific segments.

Communicate and engage with the customer wherever they are

Long gone are the days that a customer had to travel to meet you face to face to get service. Customer service is currently one of the fastest evolving components of digital marketing and getting it right is critical. Live chat is a great example of how you can assist customers quickly and easily in real-time.

You also need to consider what platforms your target spends their time on so that you can engage with them where they’re likely to visit. For example, a b2b business would usually have a heavy reliance on LinkedIn, while B2Cs are more likely to use Facebook and Instagram.

Offer incentives and rewards

We’re used to receiving plenty of incentives from companies trying to acquire new customers; just one of many examples is the cash bonuses banks offer if you switch accounts. The problem for many is that once they’ve received the initial incentive, there’s little else keeping them there to stay.

75% of consumers say they favour businesses that offer rewards, so it’s important that you find a version that suits your business and it’s customers.

As part of your relationship marketing, you should consider what you can do to incentivise existing customers to stick with you as well as acquiring new ones. This could be in the form of free educational articles emailed to them each month, creating a points-based loyalty scheme, or offering a discount to customers who haven’t made a purchase in a while.

Create something of value (content)

65% of a company’s business comes from existing customers, so it’s crucial that they’re kept happy. If they’re already a customer, they’re probably already subscribed to receive email updates. This gives you the perfect opportunity to share relevant free materials with them which function to inform and engage them- this technique comes with the added benefit of providing you with the opportunity to upsell, as well.

Obtain regular feedback

One of the most critical aspects of successful digital marketing (and therefore, relationship marketing) is measuring success. Without it, there would be no way of refining and improving our tactics as we would be blind to the results.

Feedback from customers at any stage is critical as it provides a clear picture of what’s going well or whether a problem needs solving- A great way to obtain feedback is by asking the customer to fill in a survey about their experience following on from their purchase.

Conclusion

Like our real-life relationships, we need to continually nurture our customer relationships for them to flourish, whatever stage of the journey they’re in.

Without relationship marketing, businesses would become over-focused on pushing new sales while retention would suffer, costing much more to generate business.

By following each stage, you should be able to execute your relationship marketing effectively and boost your profits in the process.

If you would like more information on relationship marketing or how to improve your digital marketing, KUB is here to help. Get in touch to see how you could be growing your business by innovating your digital marketing strategy.

KUB has successfully worked with upwards of 500 businesses over the last 19 years across a wide range of sectors to help them grow and achieve their goals. Having worked with so many companies it is clear one of the biggest challenges businesses face is finding new customers and growing sales.

KUB has evolved to being a hybrid digital marketing agency. In other words, we will do your digital marketing for you or we will show you the latest techniques to give you a competitive advantage.

By working with our clients to help them drive sales and grow their business, we found that they didn’t have the skills within their firm to use digital marketing to reach their target audience and then engage with them effectively.

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