The A-Z of Relationship Marketing

by Natasha Ambavle |

The A-Z of Relationship Marketing

Have you considered how loosely we use the term ‘connect’ in our everyday life and marketing environment? ‘Let’s connect on Skype’, ‘Connect with me tomorrow’ and ‘Connect with customers on social media’ are two different things. In the first two scenarios, connect refers to two-way communication while the latter is reduced to a stand-alone post on a social media platform that may or may not start a dialog.

Today, we see customers as profiles on social media or an email address that we shoot emails at without retracting a quality response. What’s lacking here is a ‘relationship’ between brands and their customers.

What is Relationship Marketing?

While most marketing strategies concentrate on immediate results like a boost in sales or a substantial increase in customer acquisition rate, a relationship marketing campaign focuses on retaining existing customers, building a long-term, mutually beneficial relationship between brand and customers. It aims at creating a meaningful relationship with customers that is much more than just transactional in nature. Transactional marketing strategies are aimed at increasing sales and revenue, without actually investing in customer relationships.

Relationship marketing is more than a mere marketing tactic that aims to increase conversion rate, on-site traffic. It is designed to cultivate and foster brand loyalty, which intercedes transactional relations. Creating a community of loyal customers, a strong brand following and a relationship that is undeterred by external factors like competition is what relationship marketing is all about.

What is the Significance of Relationship Marketing?  

  • Spikes Retention Rate – An ongoing strategy like relationship campaigns engages customers for a prolonged period of time. The main objective of the strategy is to improve the retention rate which is way more cost-efficient than acquiring new customers. A truly engaged customer continues its association with the brand which is reflected in the spiked retention rate.
  • Higher Customer Lifetime Value – Since relationship marketing campaigns focus on increasing the duration of the customer’s association with the brand and retention rate, the brand ends up leveraging maximum value from each customer throughout its customer journey. The higher the customer lifetime value the better the returns.
  • Reduces Acquisition Costs – Happy customers that are loyal to particular brands tend to be vocal about their preferences. Retained customers positively influence their network of friends and family and bring in more customers to the brand, organically through word-of-mouth publicity, which is perhaps the strongest form of advertising with a high conversion rate.
  • Improves Customer Experience – Consistently engaging with customers, increases brand affinity and customer experience. Customers feel free to share their feedback with the brand, which enables the brand to close customer feedback loops. This in turn significantly improves customer experience, encouraging customers to trust the brand and remain loyal to it.
  • Promotes Value Exchange – Strategies like loyalty programs, which are an integral part of relationship marketing enable a value exchange with the brand and its customers. Customers are rewarded for their purchases and association with the brand and in turn, they repeat their purchase pattern. This mutually beneficial strategy promotes brand affinity and loyalty in the long run.
  • Creates an Emotional Connect – With digitalization giving impetus to various new endeavors and entrepreneurs, it has become increasingly difficult to retain customers let alone create an emotional connect with them. Relationship marketing campaigns empower brands to create an emotional bond with customers, which is the first step towards building a strong brand following.

What are the Pillars of a Strong Relationship Marketing Strategy?  

  • Listen Intently – While the customers may never speak to you directly, they are always communicating. A great way to listen to your customers is through data, feedback forms and reviews. Listening with intent will help you gauge the pulse of your audience. Even social listening can help you understand what your customers want and prefer. Once you start understanding their needs and requirements, it becomes easy to start and sustain communication with them.
  • Invest in Your Relationship – As a brand, you need to be the initiator and active participant in your relationship with the customers. To thrive and yield returns, a relationship requires time, commitment and consistent efforts. You need to show your customers that you are here for them and that you are listening to their needs and addressing the issues. Once customers start noticing your efforts, it becomes much easier to start a dialog.
  • Close Customer Feedback Loops – Most brands listen and address the needs of their customer but still fail to improve their customer-brand relationship, why? Because in most cases the customer isn’t even aware that his/her issues have been heard and addressed. Creating and closing customer feedback loops is extremely important. Even if it’s a small issue, make sure you rectify the situation and duly notify the customer that the loop has been closed. This immediately improves customer satisfaction and fosters trust.
  • Reward Loyalty – Loyalty is a valuable asset. If your customer shows loyalty towards your brand through their actions, you need to reward their efforts in order to encourage such patterns. Loyalty programs are a great way to reward customers for their association with the brand. It not only encourages customers to engage with the brand but also boosts the repurchase rates in order to receive rewards and incentives. To leverage the maximum benefits of your loyalty strategy, connect with the expert team of Annex Cloud.
  • Reward Referrals – Another great way to engage customers and encourage them to actively promote your brand is to reward referrals. Customers engaged in a referral program earn rewards by bringing in new customers and the cycle continues while the brand improves its reach and acquires new customers in the process. For new-age and customized referral strategies, click here.

Key Requirements to Design an Effective Campaign

  • Deeper Understanding of Target Audience – The first step to creating a marketing strategy is to know and truly understand your customers and what they need. Your customer data can give you great insights as well as a direction on which to base your marketing strategies. Invest in understanding your customers and design strategies that appeal to their preferences and if possible, address their needs. It will yield great results in the long run.
  • Strong Social Media Presence – From baby boomers to gen z, everyone’s on social media. If you aim to create an ongoing dialog with your customers then you have to meet them on their preferred platform. A quick survey or data analysis will show you the most visited platforms by your target group. Create a strong social media presence and use it as a stage for customer and brand interaction.
  • The Expertise of a Loyalty Partner- Loyalty is a complex subject and needs the intervention and expertise of an experienced loyalty partner, such as Annex Cloud. Annex Cloud can help you design loyalty strategies that will amplify the effectiveness of your relationship marketing campaigns. It will help you retain customers and foster loyalty while improving customer satisfaction and experience. For a free consultation and demo, connect with our Loyalty Experience Manager.

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