In the current business climate, it’s highly unlikely that as a business owner you haven’t heard of Relationship Marketing.
It’s the Big Idea today and marketing gurus have even dubbed it this phase the Relationship Era.
Marketing has moved beyond its yesterday’s goals and objectives, and shifted the focus not to sales and revenue figures, but to establishing and nurturing relationships for the long term.
This is not to say that revenues and the bottom line are no longer important – all it means is that the route to achieving these has taken a different turn.
Business owners and marketers are privileged to have the largest and most detailed information about their audiences than ever before.
They have more access to data on demographics, location, behavioral information, analytics, purchasing and spending patterns, feedback, reviews, customer satisfaction information and social media links.
Traditional Marketing
The term “marketing” is first thought to have been used in the 16th century with reference to the process of buying and selling in the marketplace. But modern marketing practice really came into its own post the industrial revolution in the 19th century.
The field has been constantly evolving since then, and has undergone several major avatars where the focus was on different aspects.
These include:
- Production orientation
- Sales focus
- Customer centric
- Competitor targeted
- Concept of social marketing
- Relationship marketing
Though business owners tend to see marketing as an esoteric, expensive and time-consuming exercise, it’s really a route to build a strong, healthy, sustainable and growing brand.
Traditional marketing tended to focus on the 4 P’s: price, product, placement and promotion. There was a focus on what came to be known as the “push” school of thought where the marketing messages were beamed at consumers/potential customers in a random, one-size-fits-all way.
There was, for instance, hit-or-miss messaging that (rudely) interrupted entertainment shows and programs on TV, or were beamed out at a captive audience in a movie theater. Dinner-table telemarketing calls are another annoying instance.
Broadcast, print ads, billboards, telemarketing, cold calls, direct mail, and so on were blitzed at the unwary audience, with no focus on whether these messages were received, relevant or not.
There was minimal emphasis on customer relationships or customer service. The focus was often on a single sale. Quality control of products and services was seen as being an exclusive concern of the production department. The thinking was limited to immediate, short terms goals.
There are still a large number of organizations, both big and small, start-ups and legacy, that do use a combination of traditional and modern methods. This would be based on their own personal needs, preferences, budget, nature of product or service, extent of operations, and size of the business.
The biggest trend that has emerged in the current environment is relationship marketing. In many ways, it has evolved and grown from the history of marketing practice itself and the research, learnings and experiences of a large collective of business owners, industry observers, consumers, academicians and researchers.
What Is Relationship Marketing?
In a general sense, traditional marketing strategies focused on connecting with the customer. Once this connection was established, the focus was on how to leverage this advantage to the maximum benefit of the seller.
However, connections tend to be more transactional in nature. They demand immediate results and there is no requirement to prolong the connection above and beyond events such as purchasing or selling.
In time, the realization dawned that connections are made between real people. Consumers, partners, stake-holders, or vendors are not just names. They have needs, wants, emotions, problems, motivation, likes, dislikes, pain points, goals and aspirations.
This was a valuable insight and resulted in the deeper understanding of the need to take the connection beyond mere transaction and into developing a “relationship.”
Relationship Marketing evolved as a long-term strategy to build stronger, more enduring, rewarding and mutually beneficial connections.
Nurturing existing and past customers yields better results than acquiring new ones.
Statistics reveal that it costs five times more to acquire a new customer than retaining one. Profits can zoom between 25-95% as a result of just 5% customer retention. There are 60-70% chances of selling to an existing customer and just 20% chances of selling to a new visitor to your website.
Loyal customers are more forgiving, readier to repurchase, more interested in new offerings and happier to refer your goods and products.
Benefits of Relationship Marketing
Better Emotional Connect: Relationship marketing follows long-term strategies of connecting with your customer. This means you take the time and effort to know them better and create a bond that can withstand stress and strain of the marketplace.
Growth and Sustainability: Your long-term business goals can be met with relationship marketing. With the way that technology has transformed our business dealings, we can ensure that we put its power to good use. When our focus shifts to how the customer “feels” instead of what they “buy”, there are greater chances of earning the customer’s long-term loyalty and respect.
Builds Trust: A relationship has its foundations in trust. When the consumer begins to realize that you really do deliver on promises, your brand, products, customer service and values are trustworthy, they would find it easier to trust. This can be displayed in the form of awards, feedback, reviews, and testimonials.
Personalization: The goal of relationship marketing is not to see the customer as part of an amorphous and anonymous mass. When you personalize your marketing messages, deliver interesting, attractive, trustworthy and relevant content, it’s more likely to evoke the right response. 80% of customers report that they’re more likely to purchase from a brand that offers personalized UX. 72% of consumers prefer to engage with brands that offer personalized marketing messages.
Meaningful Messaging: A barrage of marketing messages can be annoying and could push the customer over the edge of frustration. Instead, relationship marketing focuses on providing the right type of message, at the right time and place and to the right person. This can be in the form of value-add content that educates and informs the customer, by providing your customer with great content, blogs, opinion pieces, industry and tech news, e-books, webinars, short courses, whitepapers, etc.
Values: Modern consumers prefer doing business with companies that display certain values, such as environmental consciousness, humanitarian concerns, ethical practices, responsible consumerism, etc. Studies show that nearly 50% of consumers would prefer not to purchase from a company that doesn’t actively support a good cause and 90% of them would switch to one that does.
[Recommended reading: The Importance Of Building Your Brand’s Social Media Presence]
[Images – Main Photo by sept commercial on Unsplash; Marketplace Image by Th G from Pixabay; Girls talking: Photo by Tirachard Kumtanom from Pexels; Pushups: Image by rawpixel.com]
Willi Mays is a digital marketing expert and content writer. She loves to share her knowledge with others. Beside her regular work she loves to read novels, poems and historical fiction.