Relationship marketing. It’s a term you’ve likely heard before, but what exactly does it mean, why is it important, and how can you apply the principles to your marketing strategy?
My name is Mary Anne, your resident Relational Marketing Guru. My career has mixed sales and marketing together, relying on customer relationships to market new products or retain customers in my current position. Over the next few weeks, this blog will cover the concept of relationship marketing, why it is essential, and offer tips on implementing tactics into your marketing plan and with staff across various departments in your organization.
What is Relationship Marketing?
The Association of National Advertisers defines relationship marketing as “Relationship Marketing is a Customer Relationship Management (CRM) strategy that emphasizes customer retention, satisfaction, and lifetime customer value. Its purpose is to market to current customers versus new customer acquisition through sales and advertising” (The Association of National Advertisers, n.d.).
Relationship marketing is the practice of seeking to understand the customer’s needs, wants, and desires by getting to know them personally. As someone who works with customers daily, getting to know customers personally lets me know if an additional product or service is right for them. Still, most importantly, it leaves the customer feeling like they are important and listened to.
Four Reasons Relationship Marketing Is Important
#1. Relationship marketing helps you best identify your target market
Focusing on building relationships with your customers can help your organization pinpoint precisely who your target market is. Correctly defining your target market can avoid a lot of wasted resources.
#2. Relationship marketing builds loyalty and trust
Getting to know your customers personally allows for trust to be earned between your organization and the customer. In turn, this loyalty and trust can lead to an increase in sales.
#3 Relationship marketing can improve your CLV
Your organization wants to ensure that great customers stay long-term and continue to subscribe to your service or purchase your products. Longer-term customers equates to a higher Customer Lifetime Value (CLV). In addition, relationship marketing builds loyalty and trust. When customers trust a company and feel that their needs, wants, and desires are being taken care of, they will stay longer as a customer and refer friends and family to your organization.
#4 Loyal customers refer friends
When done well, relationship marketing can carry over into referral marketing. Taking good care of customers by genuinely getting to know what they need often leads to sharing the experience with their family and friends. According to Neilsen, in 2021, 88% of customers trust word-of-mouth referrals from friends and family (Neilsen, 2021).
Relationship marketing is a strategy that connects the organization with its customers by being authentic and personal. It helps you better understand your target market and brings value to your customers by establishing and supporting a long-term relationship.
To learn more about how you can apply the principles of relationship marketing, please connect with me on LinkedIn.
References
Neilsen. (2021). Nielsen. Retrieved January 17, 2022, from https://www.nielsen.com/wp-content/uploads/sites/3/2021/11/2021-Nielsen-Trust-In-Advertising-Sell-Sheet.pdf
The Association of National Advertisers. (n.d.). Relationship Marketing. ANA. Retrieved January 17, 2022, from https://www.ana.net/content/show/id/brand-activation-relationship-marketing
This is great, Mary Anne! I can’t wait to read more from your perspective. Thank you for sharing!
This is great!
Great info!! Our loan officer for our home mortgage uses this method, and it’s so true! I refer everyone to her, will use her again if needed, and consider her a good friend now!!
Such great information! Once the monies are spent acquiring customers, it’s logical to make the effort to retain them, thus increasing CLV. Pondering how I can apply this in my work as a managing editor.
This is something we try to implement in our real estate business. We try to be relational and not transactional. Good points here!
Great information as a sales manager building relationships has helped us meet our monthly sales goals. We are able to use clienteling to market directly to each person on an individual level based on past purchases and interests . Can’t wait to read mom
This is so true-build the relationship with your target consumers and keep them long term. I have personally practiced the referral part to places I like to shop/use services and asked for them from my best customers. Can’t wait to see what else you have for us.
Thank you for sharing!
So true! I love doing business with places that make me feel like a friend instead of just a customer/sale!
The way companies treat their existing customers is so critical to growing a company sustainably. This is a great overview of the basic tenets!
Great info!!! Could you give me some specific examples as how to do this with starting up an organization/ decluttering company.
Too many businesses don’t realize what a wealth relationship marketing can be. Good article!