One of the best ways to boost retention is to shift your focus to relationship marketing. Relationship marketing is about building lasting, personalized connections with your customers rather than focusing on short-term sales and transactions. In this blog, we’ll define relationship marketing and share five examples of relationship marketing done right to inspire you.
I. What Is Relationship Marketing?
Relationship marketing is a business strategy that nurtures long-term personal connections between your brand and your customers, increasing customer engagement, satisfaction, and retention.
With increasingly expensive customer acquisition costs, customer retention is one of the most critical factors in a company’s success. Studies have shown that a 5% increase in customer retention efforts can result in a 25-95% increase in company revenues.
Relationship marketing is a force multiplier. How? Strong relationships deepen the trust and devotion customers have for your brand. Engaging with your customers through ongoing, quality conversations and interactions creates bonds that competitors struggle to break. The result: repeat purchases that increase your CLV (customer lifetime value) exponentially and even generate new leads.
According to Hubspot, there are three assumptions you should make about recurring revenue:
- There is a finite number of customers your business can acquire
- The best revenue is recurring revenue
- Growth requires new customers and recurring revenue
The best way to address and capitalize on these three assumptions is by investing in relationship marketing.
II. Relationship Marketing Stages
Four primary stages comprise relationship marketing. Each stage builds on the previous one, creating a solid foundation for long-term success.
- Attracting Customers: Capture customers’ attention using various methods, including traditional advertising, ads, email marketing, and social media, to generate curiosity and interest in your business.
- Converting Customers: Convincing customers to take the next step requires ensuring that your product or service solves their problem. Customers must have enough trust in your brand and messaging that they are willing to take a chance on you.
- Retaining Customers: It’s more difficult to attract a new customer than keep an existing one. Retaining customers means supporting them along their buying journey and beyond. Providing excellent customer service goes a long way in making customers feel valued. 96% of customers say customer service is an essential factor in their choice of loyalty to a brand.
- Delighting Customers: Express appreciation for your customers by offering loyalty discounts, recommending complementary products they might like, or free shipping. Try reaching out when they least expect it – a surprise birthday discount often makes a customer feel more “seen” than traditional seasonal offers.
Bonus! Creating Brand Ambassadors: The grand slam of relationship marketing happens when customers are not only loyal to you but advocate for you. Word of mouth is invaluable in creating trust. Brand advocates share first-person experiences that inspire others to buy and become customers themselves.
