ChristianRelationship marketing focuses on the connection a company has with its existing client base. This marketing strategy seeks to improve and build on this relationship, which in the long run will create a loyal customer base and profits for the company. Relationship marketing is a long term process that looks for stable solutions to earnings and return on investment. It is not a glitzy quick fix solution, so it doesn’t always get the attention it deserves, but it is a collaborative strategy that truly works.
Less Expense, Higher Returns
If you were told that you could increase your sales without increasing your marketing budget, your interest would be piqued, would it not? This is precisely what relationship marketing seeks to do.
A typical way that businesses operate is to assume that when a customer has purchased a product or service once, the customer will remain loyal. This can be a costly mistake, as it is easier and less expensive to build relationships with existing customers than it is to woo new customers or to win customers back that have been wooed away by your competition.
There are a few key statistics to consider when deciding where to put your marketing dollars:
- Repeat customers spend 33% more than new customers
- Referrals among repeat customers are 107% greater than referrals from non-customers
- It costs six times more to sell something to a prospect than to sell that same thing to an existing customer
This is a staggering bit of information, and based on these statistics, you can see that your marketing budget will go further if it is used to build and nurture your existing customer relationships. Building these relationships means treating your customers as though they are your strategic collaborative partners, rather than just numbers.
One Thing at a Time
It may seem a bit daunting to think you need to completely change your marketing strategy overnight if you’re not currently using a relationship marketing strategy, but it need not send you into a panic. You may choose to start slowly even if you choose just one of the above bullet points to target, you will notice a difference in your business, and it will give you an opportunity to test the efficacy of this strategy.
Let us start with the first bullet point: Repeat customers spend 33% more than new customers. For example, you operate a website that sells specialty health and beauty supplies. There is a certain brand of sunscreen Sally found on holiday in France that isn’t sold in the United States. She happens to find your website, which does sell this particular sunscreen, and she is thrilled. She becomes a loyal customer and purchases the product. On a return trip to France, she finds a shampoo she loves that yet again, isn’t available in the U.S. Happily, she finds the shampoo on your website, and in the meantime, purchases a few more products to try. She talks with her sister on the phone and recommends the shampoo from your website, which then results into more purchases for your company.
This is not an unlikely scenario. In Sally’s story, she has taken the lead in investigating the website, but there are marketing strategies that would push a customer towards making that leap on their own. How about an email with a list of new products offering a discount? Or a few samples of new products when you ship orders? There are many ways to strategically build strong customer relationships, which will enhance the longevity of your business, as well as its bottom line.