What is Relationship Marketing? Don’t worry, it doesn’t have anything to do with soap operas or reality television shows about singles looking for love. Relationship marketing is a new concept in marketing born of the digital age we are immersed in. It is the trend that companies no longer sell to people; people seek out information from companies they are interested in, but pretty much ignore advertising. Therefore building a relationship with customers is imperative for businesses to succeed.
In August of 2012, The Harvard Business Review announced “Marketing is Dead” on their blog. What might seem like a bold and harsh statement, especially coming from a business and marketing publication actually has a growing amount of validity in today’s business climate. In fact, if anything in the seven months since that article was posted, the statement has been proven time and again. They cited reasons behind their declaration, “buyers are no longer paying much attention.” HBR also showed how several studies on the “buyer’s decision journey,” have made traditional marketing communications irrelevant. Buyers are seeking out information products and services that interest them in their own way. That usually means researching on the Internet, and not necessarily from the company itself, but other sources such as word-of-mouth and customer reviews.
The switch from push marketing to pull marketing is not the only factor contributing to the need for relationship marketing. One of the main factors bolstering this movement is social media. As businesses and individuals are embracing social media at increasing levels, consumers are learning that they can connect with the companies they are interested in doing business with. It is in social media that they can find the latest sales, hottest products, and newest trends. When you think about it in this context, “traditional marketing and sales not only doesn’t work so well”, as the Harvard Business Review puts it “doesn’t make sense.”
What does this mean for your business?
Beyond the obvious need for a social media presence, also take into account these important factors with the goal of building a relationship with your customer:
- Learn About Your Customers. Voice of Customer research is so important and has shown to be effective in increasing revenues when your business caters to their wants and needs. Engaging and forming strong relationships with customers has 12 times more influence on retention and repeat purchases than customer satisfaction alone, according to studies by ERDM.
- Strive to Understand Your Customers’ Motivations. Why do customers buy from you and why do they purchase the products they do. Uncover the core motivations. Companies that are able to decipher the reason behind purchasing can learn how they can better serve their customers and also predict future trends. The companies, like Apple, that realized the customers core motivations when buying music was not to own a shiny disc, but to listen to music were able to stay in business ahead of the curve, where many companies fell by the way side.
- Customer Service is an Investment. So often customer service is thought of as an expense. When you switch the focus to holding customer service in the high regard it deserves and handle it as a marketing investment, the return on that investment will prove to be one of the most profitable. To illustrate this point, consider these two important facts:
- 70% of consumers surveyed cited “Bad Customer Service” as the reason for not doing business with a company again.
- Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer.
- Engage with Your Customers in the Arenas They Choose. With so many ways to stay in touch and connect with customers, let them choose how they want to receive your communications.
- Provide Value. Put out information about your products or services, your industry, and news that is relevant to your customers. Be sure to do this in an honest and transparent way.
Find Your Influencers. Empower your influencers and your social media followers to share your information beyond your social circle. This will grow followers and increase your credibility.