According to an estimate, attracting new customers is 25 times more costly than retaining existing ones. When companies acquire other businesses, their sales drop because they don’t give sufficient priority to their customers. Today, we’ll discuss what is relationship marketing; its importance, various types, benefits, and examples.
The focus of modern customer relationships is establishing a long-term relationship between individuals and buyers. If companies put more focus on providing a better customer experience, they would bring you more business.
What is Relationship Marketing?
Relationship marketing focuses on promoting customer loyalty. In fact, it focuses on building a long-term relationship between the customers and the brand. Contrary to the traditional sales-focused approach, the objective of relationship marketing is improving customer engagement and loyalty.
According to an estimate, 20% of the existing customers would generate 80% revenue of the company. Fully engaging customers would spend more money on your company. You can say that it is a natural process of the customers’ journey. The focus of this strategy is to pay heed to the current customers and improve customer loyalty.
Importance of Relationship Marketing
Relationship marketing allows companies to reduce their expenditure and increase their revenue by maintaining customers engaged with the company. Retaining the existing customer is roundabout 25% cheaper than attracting new ones. However, it amplifies the company’s revenue, when the retention rate of the company increases by 5%, it would increase the company’s profitability by 25%.
The relation market approach makes sure that the connection between the customers and the company is emotional, close, and long-term. It helps companies in building a loyal database of customers that would buy from you repetitively and refer it to their friends and family. Along with achieving the sales and profitability of the company, it is the core element of the company’s commercial venture and has a great impact on customer relationship management.
Types of Relationship Marketing
Some of the main types of relationship marketing are as follows;
It is a type that has got links with traditional marketing approaches. Here, the objective is to attract customers and drive them down the sales funnel toward the final closing of the deal or purchase. The basic marketing approach doesn’t involve a lot of communication between the customers and the company.
It is a type of relation market approach that comprises buying the product and closing the deal. A company approaches its customers for their feedback, reviews, suggestions, and comments for their business. For instance, a company could send a request for the feedback of customers through the mail.
Accountable marketing comprises deeper communication between the client and the business. The company approaches customers and reminds them about the buying deals and tells them why the reviews are significant.
Businesses and companies keep on strengthening their interactions with their customers. They not only interact with their clients and customers regularly but also amplify the quality of the product or service based on the feedback of customers.
It is a form of relationship market approach that outlines the strong connection between the customers and the company. Here, the company attracts a third party to satisfy the needs and wishes of customers. Customers also participate in product development and the improvement process.
Benefits of Relationship Marketing
Some of the main benefits of relationship marketing are as follows;
Companies with a relation market approach tend to have a strong organizational alignment and offer a better customer experience. Their team would collaborate with each other to make customers happy and satisfied.
Lower Ad Spending
Launching marketing and promotional activities could be costly for the company. The relation market approach allows the company to create a buzz in the market. The customers would spread the word about the company’s product or service in the market, and it would make people buy your product or service.
The relationship marketing strategy helps companies to establish a loyal database of customers, and it results in the form of higher CLV (customer lifetime value) and repetitive purchases. Your loyal customers would act as the brand ambassador and they would refer the company’s product or service in their social circle.
Some of the other benefits are as follows;
- Higher product value
- New and latest business ideas
- Powerful brand resilience
- Longer lifetime value
- Closing the deal and faster purchasing
- Attracting customers at a very low cost
Examples of Relationship Marketing
- Bonuses and discounts to the long-term loyal and repetitive customers
- Referral programs where the company offers rewards to the customers for spreading the word
- Organizing customers’ events and connecting with them
- Launching loyalty programs and offering rewards for their continuous support
- Requesting positive feedback from customer through phone calls, messages, and it creates a positive impression where you value the views of customers
- Thanking customers through social media posts
Conclusion: What is Relationship Marketing? Types, Benefits, Examples
After an in-depth study of what is relationship; its various types, benefits, and examples; we have realized that relationship plays a significant role in the growth of your business. If you’re developing your relationship market strategy, then you should keep in mind the abovementioned guidelines.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.