If you are not developing a relationship marketing plan for your business, you could be in trouble. In a world where business owners and marketers are constantly being told to work to find new customers, the value of customer loyalty can sometimes get lost.
When you think of major brands like Apple, it is quite clear that a large portion of their success comes from the incredible amount of loyalty consumers have for their brand.
It is astonishing to think about the fact that Apple has, time and time again, convinced consumers to buy new iPhones that have very little new features.
So, how in the world are they doing this?
How are they getting over 2 million Apple fans to ignore reason and buy an iPhone even though there are very few actual advancements in the features and technology provided?
Relationship Marketing – What EXACTLY Is It?
Relationship marketing can be defined as a type of marketing that aims to develop customer loyalty and long-term engagement from existing customers rather than focus on new customer acquisition.
While this type of marketing has been used for years by both product and service based businesses, its popularity has risen significantly recently.
This is a movement that can be traced to a couple different things.
For one, the rise of analytics and data in the marketing world has helped businesses realize just how powerful relationship marketing can be.
Bain & Company, one of the biggest management consulting firms in the world, have performed studies suggesting that acquiring a new customer is actually 6-7 times more expensive than keeping an existing one.
Another statistic provided by Kathy Paauw, a business coach and productivity consultant, says that 67% of business today is driven by word-of-mouth and personal referrals.
As you can see, there is a clear correlation between relationship marketing and the overall success of a business.
But if you do not have the resources or budget that Apple has to invest in relationship marketing, how are you supposed to succeed with it?
Well, the good news is that a lot of the strategies that contribute to the success of this marketing tactic are actually quite low budget.
To help you, let’s take a look at five power-house strategies that you can apply instantly to help your business get to the next level with relationship marketing:
#1 – Let Your Customers Know That They Matter
If you had to guess what the biggest reason that customers stop buying from a company, what would you say?
Would it be because a competitor is cheaper? Or maybe because they no longer need the product or service?
Surprisingly, it is none of these things.
According to Peppers & Rogers Group, over 60% of customers say perceived indifference for why they leave.
So there you have it; the number one reason that customers or clients stop working with a company is because of perceived indifference.
To put it in simpler terms, people stop buying from companies because they feel that they are not important.
Whether this is due to a lack of service by the salespeople within the company or an overall lack of response from the business as a whole will vary from company to company.
The bottom line, however, is that one of the first and easiest things you can do to succeed with relationship marketing is to build a model that shows that you value your customers.
This can be done in a variety of different ways and a lot of how you do this will depend on just how many customers you have.
One of the more creative ways that some businesses have managed to do this is by putting together hand-written thank you notes for all of their customers.
Tom Hopkins, a former real estate agent who is now a sales trainer, developed a habit where he would put together 10 hand-written thank you notes every single day.
These thank you notes would be written to current customers, potential customers, customers who did not buy from him, and even customers who had bought from a competitor.
After three years of starting this habit, the creative philosophy ended up resulting in Hopkins getting 99% of his business through referrals.
How amazing would that be for your business? What if it was possible to build a system where your marketing consisted of simply staying in touch with your current customers?
While the hand written letters may be a little outdated, this is certainly not the only way that you can show that you value your customers.
Sending holiday cards, free gifts, or even writing up a personalized email are all solid ideas that can help you develop a system where referrals and word-of-mouth become your main source of business.
#2 – Create Highly Useful Content – But Focus on Promotion
As a business owner or marketer, you have surely heard all about the role that content marketing can play in connecting with your customers.
The problem, however, is that most content marketing experts tell you that you need to create a ton of high quality content to be successful in this space.
The thing is, and as Social Triggers founder Derek Halpern has demonstrated, it does not always have to come down to creating an absurd amount of content.
Halpern is famous for, among other things, his suggestion that you should focus 20% of your time on creating high quality content and 80% of your time promoting the content.
As he points out in his article about this strategy, search engines are now absolutely overloaded with content.
It can take years of content creation and tens of thousands of dollar’s worth of resources to get to the first page of Google today.
Instead of committing a ton of resources and man power to trying to compete to create massive amounts of high quality content, Halpern instead focused on creating a few pieces of GREAT content per month.
In fact, between March 2011 and April 2012, he averaged a little over 2.5 blog posts per month.
With this method, he was able to gain over 25,000 loyal email subscribers.
Now, any email marketer would agree that gathering over 25,000 email subscribers in a little over a year is absolutely incredible (some would say impossible).
But what in the world does this all have to do with relationship marketing?
Well, in effect, email marketing and content marketing work together to form a basis for relationship marketing.
When you are able to build a mailing list and then deliver helpful content to that list on a regular basis, those subscribers become much more likely to be loyal to your brand.
Once these consumers have become loyal members of your mailing list and possibly even customers, the probability of selling to them rises to over 50% as opposed to the low probability of selling to a completely new prospect.
While the benefit of building loyalty through content and email marketing is clear, it should be noted that you need to create GREAT content for this to work.
This content should feature data, links to strong sources, images, graphics, and actionable advice that your readers can implement.
And remember, creating even two to three pieces of great content per month is enough to help you excel in relationship marketing.
Just be sure that you are doing it consistently.
#3 – Use Social Media to Focus on Helping and Not Promoting
As many marketing consultants and bloggers have pointed out, social media marketing does not exactly work in the way most businesses want it to.
Most businesses and marketers using social media want it to serve as a way to bring in leads and build ROI.
The problem, however, is that most social media platforms are not at a point where they are an efficient way to do that.
Many business owners, in fact over 60% of them, believe that social media marketing has a chance to eventually produce ROI but that it is not yet doing so to the point where a full on investment into it is necessary.
To simplify what they are saying; social media marketing might be an effective strategy down the road but it is not yet there.
While this may be true, that certainly does not mean that it cannot be useful, especially as it relates to building relationships and developing customer loyalty.
One of the best ways you can do this is by using it to provide assistance and be helpful to your customers.
As a business owner or marketer, it is safe to say that you have some type of experience or knowledge that could be useful to others.
For many businesses, this is one of the reasons that customers are actually buying from you in the first place.
So why not use that experience or knowledge to successfully develop relationships and build loyalty.
Find consumers that have questions or are having problems related to your expertise and offer your help to them.
Some major brands, such as FedEx, actually take this a step further by providing customer service through social media.
While it may seem like this would be an impossible task based on your time and resources, making the commitment to doing so for even 20-30 minutes per day can be extremely effective.
Make a commitment to help your customers through social media and they will in turn make the commitment to stay loyal to you and your brand.
#4 – Personalize Your Customer Support
This strategy is, in large part, an extended version of the first strategy on this list (let your customers know you care).
As stated by Customer Experience Insight, 70% of customers leave a company due to poor service.
In a world where business owners are looking to maximize efficiency and create avenues for automation, it seems like customer service can get lost in the shuffle.
But, as the statistic above shows, doing so can mean losing customers.
So, how do you personalize your customer service while still staying efficient?
Unfortunately, these things are very difficult to combine.
One of the first things that you can do, however, is to fully educate your customer support staff and all of your employees about the culture that you want to present to your customers.
Set a standard for how you want everyone to treat customers and encourage them to be personal and authentic when communicating.
The team at Help Scout wrote a well thought out guide into the 15 customer service skills that every employee needs.
Reading it and discussing those skills with your staff would be highly beneficial.
Once you understand the culture that you want to create and have worked to help your employees understand this as well, the next step is to find ways in which you can provide this personalized customer service.
As you have seen throughout this article, you can really get creative with how you do this.
Following the typical routes of phone and email support are always an option, as is using social media or opening up a live chat option on your website.
What you do or how you expand your customer service will most likely come down to the resources that you have available.
At the end of the day, it is not all about how fast you respond to your customers.
Instead, it comes down to how you communicate with them.
Create a culture and encourage your staff to be personal and authentic. Your customers will greatly appreciate it.
#5 – Create a Rewards Program
As FiveStars CEO Victor Ho states, creating a system that rewards customers for spending can be hugely beneficial towards building loyalty.
While it may seem like building a rewards or loyalty program would be a huge endeavor, it does not have to be difficult.
Ho gives the example in his Inc.com article about a restaurant giving a point for every $5 that they spend.
From there, the points can be used towards purchases in the future and creates a win-win for both your business and the customer.
Not only that, but it also encourages them to spend more each time they decide to buy.
To create this in your business, you can simply set up a similar point system and create a system for documenting this.
There are all kinds of software available for you to automate this process as well, which can make it a very efficient form of relationship marketing.
As you do this, focus on creating a way for customers to earn rewards early on so they become more likely to get on the path to becoming a loyal customer.
As with anything, first impressions are important.
The Final Word
With the incredible advantages that it presents, relationship marketing can be an incredible strategy for growing your business through already existing customers.
This can significantly cut your costs and improve efficiency throughout many different parts of your business as well as dramatically increase growth and profits.
Implementing the strategies outlined on this list and making the commitment to studying relationship marketing can truly help your business can to the next level.
One thing is for sure; you certainly will not regret making the decision to do so.
What other relationship marketing strategies do you use in your business? Do you have any thoughts or ideas about relationship marketing in your business? Share you comments below and let me know…