The term ‘relationship marketing’ is creating a lot of buzz today. But before we get into the details, let me introduce you to two professionals: Seema and Ajay. Both work as sales representatives in a firm that provides office lighting solutions. However, their approach towards clients vary.
Same product, different approaches
Ajay walks into a prospective client’s office and says, “I see previously you have used X’s lights that I know didn’t meet your requirement. But I can show you how you can save at least 40-45% by working with me instead…”
She walks into the prospect’s office and begins a conversation by saying, “I really appreciate you inviting me in today. I would like to tell you that if you are looking only for the lowest prices, we are not the one for you.
“Our goal is to help clients with lighting that ‘wows’ your office environment. Does it make sense for us to continue talking?” she asks with a pleasant smile.
Both the marketers are hoping to make a deal, but there is a huge difference in the manner in which they are doing it.
Needless to say, Seema wins it big. She clearly:
- Values relationships over quick sales
- Talks as if to build long-term engagement
- Creates an emotional connect with the customer
This is an example of relationship marketing.
This strategy focuses on winning customer loyalty by developing strong relationships through communication and quality service.
Those who are really good at this type of marketing make a point of quickly creating an emotional connection with the prospect.
In contrast, Ajay is solely focused on making a sale. He has established little connection with his prospective client, and is focused only on the immediate sale. This is a case of transactional marketing. The emphasis here is on maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer.
The 6 steps of relationship marketing
Transactional market focuses only on this sale, while relationship marketing aims to create a long-term relationship that will likely yield many sales over time.
- Train staff on how to build effective relationships.
- Communicate more often.
- Invest in right technologies.
- Focus on rewards and referrals.
- Use online channels smartly.
- Cherish face-to-face time.
While you may already be using some of these techniques, scan our list for a few new ones to try this year.
#1. Train staff on how to build effective relationships
For companies to succeed in relationship marketing, the first step is to invest in internal training of staff to promote effective sales, marketing and support functions.
Training programs should focus on finding solutions to customer problems and effectively fulfilling them. It’s important to instruct staff on when to escalate calls or offer benefits such as:
All can be useful tools in retaining clients who might otherwise leave.
#2. Communicate more often
Relationships are based on communication, so be sure to communicate with your customers often.
Rather than just telling customers about your business, have conversations with them. In the process, you’ll create personal connections that make clients more engaged.
There are many tools available now to automate such messages, so the customer receives the right touch at the right moment. Be sure to follow up quickly on any responses from clients, whether on Facebook or via text or email.
#3. Invest in right technologies
In today’s age of automation, even small businesses are investing in technology to boost speed and efficiency.
To improve customer service and client retention, you should consider software such as:
- Customer relationship management (CRM) software, used to collect, organize and manage customer data in one place
- Enterprise resource planning (ERP) programs, which connect inventory and order management, accounting, human resources and CRM into one integrated system
You need to select your software carefully, as there are many cloud-based as well as on-premise software solutions available in the market.
#4. Focus on rewards and referrals
According to a study, eight out of 10 customers look for loyalty and reward deals before they make a purchase.
Reward programs — discounts, points towards merchandise and other free rewards — assure customers that you care about them and appreciate their support. Referral programs use similar rewards to encourage happy customers to recommend your business to others.
Be sure to constantly promote your reward and loyalty programs through your social media and on your website.
#5. Use online channels smartly
There are various online channels that small businesses can leverage to craft and deliver their messages on a regular basis.
Email marketing is one of the least expensive ways to communicate on a variety of topics such as:
- New product launches
- Exclusive offers
- Clarifications regarding service issues or product failures
- Exchange offers and so on
Make sure to personalize the messages whenever possible.
Website, online chats, toll-free numbers
Today every company should have a website and listing in directories. Websites have to be:
- Mobile friendly
Online chatting feature is a plus as is a toll-free number, since both enable customers to quickly resolve complaints. Learn more about how to get a website here.
Text (SMS) marketing
You can communicate new offers, product launches, showroom openings, discounts/reward points or any other timely offer through SMS to strengthen your relationship with customers and stay connected.
Social media marketing
Social media has emerged as a viable digital platform to communicate with existing consumers and help in generating new leads. Facebook, Twitter, LinkedIn, Pinterest, YouTube and other media can be effectively used for promoting the company.
Be sure to send Greetings on festivals and on New Year to consumers through email and social media pages. This will convey the message that your company cares for its consumers.
The other effective way to take the pulse of the market is to conduct regular polls and surveys and act on the feedback to improve long-term relationships with customers.
#6. Cherish face-to-face time
The power of face-to-face meetings cannot be ignored in relationship marketing. Whether planned or unscheduled, these meetings can help the customer feel known and valued.
You might consider stopping by your customer’s place of work or organize special events for a meet up in regions where your clients work. These interactions bring a level of personalization to your relationship marketing strategy.
Transactional vs. relationship marketing
While all marketing focuses on gaining clients and increasing profits, relationship marketing and transactional marketing take different views in dealing with the client.
- The transactional approach views the client solely as a means for sales
- The relationship marketing strategy seeks to establish a relationship with the person going a few notches above mere sales and profit
Transactional marketing proponents argue that as the clock is ticking, there has to be an emphasis on maximizing the volume of individual sales rather than developing a relationship with the buyer.
An alternative to the transactional model, relationship marketing emphasizes customer retention and future interaction with the company. This strategy stresses on the fact that nurturing relationships is a way to increase lifetime value.
Long-term benefits of relationship marketing
While some believe that relationship-based model can lead to greater expense and time, ongoing interaction with buyers typically improves return on investment (RoI) in the long-run.
Research by Deloitte and Touche found that customer-centric companies were 60% more profitable compared to those that were not.
One example is that of Dell computers creating a special online store for high-volume corporate customers. By personalizing the ordering process for a high-value segment of clients, Dell was able to solve critical points their corporate buyers were reporting.
Another example is American Airlines. The airline maintains a comprehensive frequent flyer program that rewards return customers with free flights, upgrades and discounts.
In each of these examples, the brands provided a higher level of service to keep customers coming back again and again.
Here’s to years of business success
If you want your business to be around for years to come, make customer relationship building part of your culture, from the top management to the line staff. Use the latest tools and practices to collect, analyze and act on customer feedback in a timely manner. Listen more than you talk and always thank them for their business.
Take your customer relationships to new heights by following these simple guidelines, then watch as the number of lifelong customers grows.