Relationship marketing is a type of marketing that focuses on creating long-lasting and profound relationships between a brand and its customers. Opposed to the traditional sales-focused approach, relationship marketing’s main goals are boosting client loyalty and engagement.

Why is relationship marketing important?

In a nutshell, relationship marketing helps businesses gain higher revenue and cut expenditures by keeping clients engaged with a brand. Retaining a customer is 5-25 times cheaper than acquiring a new one. Better yet, it results in extra earnings; when a brand raises customer retention rate by 5%, it sees a 25% increase in profit.

Relationship marketing ensures a long-lasting, close, and emotional connection between companies and their clients. It helps earn loyal customers, who purchase from a brand repeatedly and recommend it to their friends, family, colleagues, and so on. Apart from increased sales and profits, which is the core of every commercial undertaking, profound business-customer relationships have other advantages.

Benefits of Relationship Marketing

  • Cheaper customer acquisition
  • Close deals faster
  • Longer lifetime value
  • Stronger brand resilience
  • New business ideas
  • Enhanced product value

We’ve discussed why relationship marketing is important for your business’ profitability in general. Now let’s take a closer look at the far-reaching benefits of implementing it into your marketing strategy.

Cheaper Customer Acquisition

With relationship marketing, your goal is to create an army of brand advocates. When customers have a great experience with your business, they are more than happy to recommend your products or services to others. Meanwhile, 84% of people across the world deem recommendations from their friends and family as the most trustworthy source of information.

Referrals from acquaintances underlie 20-50% of purchasing decisions. Yet the most pleasant part of this situation is that you gain additional sales and new clients while spending next to nothing on it. Word of mouth is still the cheapest and one of the most reliable customer acquisition sources.

Close Deals Faster

If your business markets a complex tech-savvy product or service, closing a deal might be a pain in the neck. Closing deals in the B2B sector takes 102 days on average; the mammoth part of this process is not the selling itself, but lead nurturing.

With relationship marketing, you get new leads from referrals, which is the best source. This type of lead not only converts better but also tends to close deals faster – 67% of marketers and 69% of frontline salespeople confirm this.

Longer Lifetime Value

Relationship marketing’s main goal is to keep a client engaged with a brand for as long as possible. So, an increase in customer lifetime value may seem like something not worth mentioning. However, not only do initially loyal customers tend to stand with your company longer; their referrals do too. Roughly 60% of B2B marketers and frontline salespeople say that referrals have higher lifetime value. The LTV of a referral customer is 16% higher.

Stronger Brand Resilience

Relationship marketing leads to customer loyalty growth, which is a critical ingredient for strengthening your brand. Companies benefit from this process in multiple ways. Strong brands have more robust edges in the market, they introduce new products more easily, they attract the best employees, and so on.

Moreover, the cost of a single mistake is not as high when your brand is strong enough. Customers tend to forgive companies they are emotionally connected to – only 17% of clients would dump a beloved brand after a single blunder. Meanwhile, in the case of a negative first experience, 39% of customers would not return to a company in the next two years.

New Business Ideas

Relationship marketing implies constant tight-knit interactions between businesses and clients. As a result, you get more and more awareness about what your customers want, and how you can change your product to get more clientele.

Learning from your customers also helps you avoid unnecessary risks when rolling out new products. If you know your customers’ preferences you can implement only effective and sought-after changes to your brand and product.

Enhanced Product Value

Rephrasing a famous expression, the customer experience is king. 86% of buyers are ready to pay more for a great experience. This means that while others have to dump prices to obtain customers, you can sell dear and still gain more. If you’re providing your customers with great experience, of course.

The points we’ve just nailed down seem so appealing. You’re probably looking forward to building a strong connection with your customers. Do not rush – let’s discover types of relationship marketing first.

5 Types of Relationship Marketing

  • Basic marketing
  • Reactive marketing
  • Accountable marketing
  • Proactive marketing
  • Partnership marketing

Types, or levels, of relationship marketing, may be hierarchical stages of building contact with clients. At the same time, each type can be an independent form of brand-to-customer interactions. Here are the five levels of relationship marketing:

  • Basic marketing. This type is associated with a traditional approach to marketing. Precisely, the goal here is to entice a potential customer and drive them down the sales funnel towards making a purchase. Basic marketing does not imply profound communication between a company and its clients.
  • Reactive marketing. This level of relationship marketing encompasses after-purchase interaction. A brand reaches its customers to ask for feedback, comments, suggestions, and so on. For instance, a brand can send a feedback request email.
  • Accountable marketing. Accountable marketing entails deeper interaction between a business and a client. On this level, the business reaches customers to remind them about their purchase and explain why their feedback is important. Another scenario is when a company replies to the feedback they got in the previous level.
  • Proactive marketing. Here, businesses continue to deepen their contact with customers. They not only communicate with clients regularly but also improve their products and services according to what they’ve learned from their customers.
  • Partnership marketing. This type of relationship marketing implies the strongest connection between a business and its client. Here, a company can bring in a third party to serve a specific customer need. Another way to do this is to involve the customer themselves in product development and improvement.

Each company can go to the deepest level of communication with a client or stop at the stage that resonates with its business needs the most. Whatever you choose, apply the right strategies to achieve success with your relationship marketing.

Relationship Marketing Strategies

  1. Revise your communication channels
  2. Engage customers through email marketing
  3. Apply ERP & CRM solutions
  4. Prioritize customer service
  5. Reward loyal customers

Building relationships is a long and labor-intensive process, which may result in increased ROI, a strong brand image, and happy customers. On the contrary, it may come out dead in the water and ruin the time and money you’ve invested in making connections with your customers. We’ve picked five strategies for you to leverage when working on your relationship marketing goals.

Revise Your Communication Channels

Most companies are only presented online through their websites, and not all of these sites work well. To engage your customers with your web page, make sure it is easy to navigate and provides all the essential information about your business. Add an online chat for swift connection with your support team and phone numbers to contact you even quicker.

More than 50% of traffic at the beginning of 2020 came from mobile devices. Thus, consider optimizing your website for mobile. Make buttons convenient to click, add vertical scrolling, and optimize your content for fast loading.

Apart from changing your website, think about adding new communication channels. The golden rule of good customer-brand relationships is to present your business where your clients prefer to spend time. Conduct research to spot the social networks and messengers your customers use and be there for them.

Provide the possibility to interact with your brand through various channels even when you ask potential customers to subscribe. Multichannel forms will help you leverage this task; they allow a user to decide where they want to receive your messages. To create your multichannel forms for email, Facebook, Telegram, and other subscription options register with SendPulse.

Engage Customers through Email Marketing

To keep your customers engaged with your brand for the long haul, implement email marketing into your strategy. Although this marketing channel may seem a bit old-school amidst multiple social networks and messengers, it still brings in great results.

Email campaigns allow you to reach customers consistently and provide them with a more personalized experience. The latter is the key to the most finicky customers’ hearts and purses – 72% of consumers only engage with personalized messages.

Try to be mindful when building your email marketing strategy for customer retention. Send carefully crafted emails at the proper frequency, otherwise, you’ll get outraged clients instead of loyal ones. Remember that long-lasting relationships require communication, care, and sincerity rather than hard selling. Thus, try to avoid only sending special offers; to make your email marketing more diverse, follow our compilation of different types of emails with examples.

Apply ERP & CRM Solutions

Doing relationship marketing without accurate and precise information about your customers is all smoke and mirrors. To create a seamless experience for your clients apply modern technologies, namely, customer relationship management (CRM) and enterprise resource management (ERP) solutions.

CRM software allows you to collect data about your customers, track the history of their interactions with your brand, pinpoint service issues they have faced, and so on. With this information on hand, you get more opportunities to delight customers and keep them engaged. Businesses that already have taken advantage of CRM noticed a 47% improvement in customer retention and satisfaction.

ERP solutions focus on your company’s processes, help you automate them, and maintain your business more effectively. 95% of companies that implemented ERP, noticed improved efficiency in their business processes.

CRM and ERP can decrease your overhead costs, boost sales by 29%, and take your relationship marketing to the next level. Thus, consider applying ERP solutions from Microsoft, SAP, Oracle, IBM, Peoplesoft, or others to your marketing strategy. As for CRMs, you don’t only have to choose market leaders, such as Salesforce, check our list of Free CRM software.

Prioritize Customer Service

When it comes to building strong long-lasting relationships with clients, excellent customer service is the name of the game. 96% of consumers say great service is crucial for their loyalty to a brand. Almost half of the Americans surveyed named poor service as the main reason they switched companies.

Cutting corners with customer service may have painful results for your business. At the same time, friendly and helpful service representatives are not enough; you need to be proactive in your aspiration to help. To leverage proactivity, determine common issues your business faces, and create a plan for how to deal with them. This will help your company’s representatives react instantly when the problem occurs.

Speaking about the urgency of reaction, your clients expect to get a response from a brand within an hour of their query. Consider adding a chatbot for your customer service. It will not only help your customers get a quick answer in case of an emergency but also cut your customer support costs by 30%.

To benefit from using a chatbot, sign up with SendPulse – with our platform you can build a bot for Facebook and Telegram for free. Send up to 10,000 messages a month, set up autoreply flows, get detailed statistics on interactions with your bot, and more.

Reward Loyal Customers

Humans have a neural structure called the reward system, which reinforces certain behavior patterns. As a result, we tend to recreate actions that led to some valuable rewards. It’s a basic psychological trait you can use in your relationship marketing – simply reward your clients’ loyalty.

Although the market seems oversaturated with various loyalty programs, they actually work. 79% of consumers continue doing business with brands because of their loyalty programs. Nevertheless, people are active in nothing short of half of the programs they belong to. To create a program that works, stick to several rules:

  • Do not limit your loyalty program with discounts only – offer sneak peeks of upcoming products, special events, gifts, and so on.
  • Use gamification – show your customers their progress with your service, give redeemable points, create challenges.
  • Partner with other businesses – this move will help make your awards more diverse and engage people with various interests.

We’ve unveiled several relationship marketing strategies your company can use. Now let's see how exactly brands use some of them to keep their customers engaged.

Relationship Marketing Examples

We’ve picked three examples of brands using strategies from the list above. Consider adopting some of the best practices or their elements.

Chatbots for Consistent Interaction

Chatbots are a great tool for handling customers’ issues and providing them with prompt assistance. However, chatbots' scope of application does not limit itself with support only. Bots on various platforms can be used for keeping customers consistently engaged with a brand.

The meal kit delivery service HelloFresh implemented a Facebook chatbot to constantly keep in touch with its clients. This little buddy helps users solve frequently occurring issues, answers common questions, set regular reminders to order delivery, notifies them about new blog posts and other updates, searches for interesting topics, and more. HelloFresh even uses an element of gamification – you can take an entertaining quiz about breakfast.

HelloFresh’s Facebook chatbot

Gamification in Email Marketing

The writing service Grammarly uses good old email marketing to keep its users engaged. Apart from common emails with tips and special offers, the company adds gamification into their email marketing strategy by sending weekly progress reports to users.

The email starts with awarding you a flattering yet witty status – Hercules in the example below. Furthermore, you can track your writing statistics. To play on your passion for competition, Grammarly compares your achievements with other users’ results.

At the end of the email, the company recommends switching to a premium subscription to eliminate even more mistakes. For better engagement with its brand, Grammarly offers a collection of fresh stories and tips from their blog.

Grammarly’s weekly progress report

Engagement through a Loyalty program

Coffee-to-go giant, Starbucks, provides us with a bundle of great marketing solutions, from custom GIFs on Instagram to reportedly deliberate errors in customers’ names on their cups aimed at gaining more social shares. Although the information about the latter trick is unverified, Starbucks still has tons of other effective methods, such as its loyalty program.

The company rewards its customers with multiple benefits. Apart from gifts and exclusive offers, the coffee shop chain allows you to order ahead and pay with your phone if you’ve installed their mobile app.

To reinforce clients’ engagement with the brand, Starbucks adds gamification. Customers get stars when paying through the app; they can exchange the stars for customized drinks, additional snacks, and so on.

The most interesting part is the additional opportunities to gain more stars. Customers get bonus points by playing games and accepting special offers in the app. This trick makes clients interact with Starbucks’ mobile application and the brand itself frequently and consistently.

Starbucks’ loyalty program

To implement relationship marketing in your marketing strategy and meet your business goals, try different tools and channels. You may go for a mobile application as Starbucks did, implement a chatbot, choose email marketing, or test other options, such as web push marketing. To start exploring new effective ways of interaction with your customers, sign up with SendPulse.

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