Relationship marketing is becoming an integral part of any customer-based business. Organizations/businesses are investing more and more towards relationship marketing, as it helps them to maintain a perfect viable brand name and customer loyalty. But the questions are, how does it do that? What exactly is the meaning behind the term “relationship marketing”? What are the benefits to gain using relationship marketing? Let’s explore.
The process of securing new customers is filled with many difficulties and is very expensive. According to business authors Mark A. Murphy and Emmett C. Murphy, retaining an existing customer can be five times cheaper than acquiring a new one. This is where relationship marketing comes into play.
Relationship marketing refers to the set of all the steps taken by an organization to develop and preserve the continuing and deep-rooted relationship with the customer and maintain profitability.
Relationship marketing is different from traditional marketing, as it focused on retaining the existing customer, which develops the long-lasting association, hence the recurring sales. In comparison, traditional marketing is concentrated on securing the new customer without emphasizing developing a relationship with the consumer, hence one-time sales.
In this ever so increasingly globalized world, consumers expect to have easily accessible and well-detailed information about the product and the brand. These days’ brands use many online platforms, like social media and the web, to develop a personalized relationship with their customers, including keeping the customer’s database and using it to connect to the customers through an emotional level. Hence creating a sense of brand loyalty and satisfaction in the minds of customers.
Benefits of relationship marketing
It takes a long time and a lot of effort to build a productive and conclusive customer relationship. However, once you have achieved that, it comes with countless paybacks and benefits.
Let’s discuss some of the main benefits of relationship marketing.
If we take a close look at some of the most successful brands and businesses, almost all are based on close and personalized relationships with their customers. Consumer of Apple products is far less likely to buy a competitor’s product, e.g., Samsung, and vice versa. Hence staying loyal to your brand.
A good product combined with relationship development is a recipe for success. A loyal customer keeps on coming back for your products, which results in multiple sales to the same customer, which improves profitability. Customers are also much more willing to let go of any bad experiences since you have built a relationship with them by addressing their issues well and being proactive.
Value of product and increase in pricing
Pricing your product is one of the most challenging and thought-provoking processes. It would be best if you were careful and considerate of the price bracket you are putting your product in. It could only be done right when you know your customers well. Relationship marketing helps you to do that. Once you have set the price value of your product, the next job is to maintain that price.
In this ever-so-inflated market, it isn’t straightforward to keep the product’s price the same for long periods. It is imminent that you would have to increase your prices to keep up the profits. Loyal customers show a lot more acceptance towards the increase in prices, and there is a minimal backlash to it. This way, you won’t lose your customers to your competitors despite raising the prices.
Productive feedback and business growth
When your customers know that your firm/organization values them, they are more likely to voice their thoughts. They will expect their opinions to be listened to, so they are more likely to share them and give feedback.
Customer loyalty that you have gained through relationship marketing strategies will mostly get you positive feedback and great reviews, which will help you attract even more customers. If they see any opportunities to improve your services and products, they will let you know and be constructive in their feedback rather than just being negative. It could be instrumental in designing your products according to the needs and requirements of your customers. All this will help you in the development of your business.
Free of cost marketing
Lots of brands spend a considerable chunk of their budgets on advertisement and marketing. Different techniques are used to lure the customer in and make your products appeal to them. But it is a known fact that people are more likely to trust the words of their family and friends more than any form of marketing. Relationship marketing helps you develop such a bond between your brand and the customer that they are more than happy to recommend it to their loved ones. It is the best form of advertising. We not only have free-of-cost marketers in the form of our customers, but it is also more effective.
Helps you to identify your target clienteles
Identifying your target consumers is one of the most integral parts of your marketing success. When you know who to appeal your product to, advertising your product suddenly gets less time-consuming and more cost-effective. You can spread your brand through various online platforms to get optimal results. This way, you would be focusing your resources on the potential buyers rather than focusing on mass marketing.
Helps launch your new products
We see people using different brands for different products in their daily life. For example, my friend has a Samsung phone, Dell Laptop, Sony TV, and a Lenovo Tablet. It clearly shows that he doesn’t have complete trust in one brand, and he is more than happy to go with different brands for different products. On the other hand, if your customer is happy with your one product and has a good relationship with your brand, it is more likely that he/she is willing your other products as well. For example, we see lots of people using the same brand of phones, laptops, and TVs, etc. It helps you to launch your new products and get the number of sales with your existing customers.
Increase in trust-based sales
We often see that better-trusted brands can charge more for their products and still have a much larger number of sales as compared to less expensive brands. Why is that? The answer to this question is quite simple. People prefer to buy from the business they trust. They are even willing to pay more for this brand trust as it gives them peace of mind and a sense of reliability in the product.
This trust is developed through well-maintained product quality and enhanced customer services and experiences. Existing customers, if satisfied, are willing to spread the word about how trustworthy your brand is and what good customer service your brand provides. This is all down to the use of the relationship market to develop a relationship with your clients, which is based on trust.
If your use of relationship marketing is effective and you are able to develop cordial relationships with your customers successfully. It gives you a significant competitive advantage over your rivals who have failed in relationship building. This might take some effort and means, but the benefit is so significant that it is usually worth it.
Increase in profits
Basically, every benefit mentioned above leads to this one thing, the profits. Relationship marketing reduces the cost of your marketing which is results in a decrease in expenses and inevitably an increase in profits. Customer value over a lifetime is increased, which results in an increase in profits. Business growth and development, welcoming new customers, and retaining existing customers all increase the volume of sales, and hence profitability of the brand is enhanced.
For most businesses, relationship marketing has countless benefits. It is perhaps the most cost-efficient marketing technique available. It helps improve the brand image and the profitability of the brand. Not only it benefits the organization, but it also helps in keeping customers happy. Customers can have the best possible experience customized to their own needs. Hence, relationship marketing being beneficial for both brands and the customer, creates the win, win situation, which is very refreshing to see.
However, relationship marketing does have its flaws amongst countless benefits. Customer services can be expensive in case promotions are not done right and fails to interest customers. Its benefits might be redundant for some of the business models. For example, if your product is something that most people buy once in a lifetime, relationship marketing might not be the best marketing strategy to go with.
In this global world, the competition across most businesses is growing. Businesses are trying different techniques to keep the interest of their customers. A search for cost-effective ways to advertise the products is ever so growing. It is vital to keep on updating the customer databases so brands can pitch their products to the customers according to their needs. Connecting with your customers through all the possible platforms keeps your brand fresh and updated in their minds.
Once success is achieved, rewards are inevitably yours.
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