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How Relationship Marketing Works, its Pros, Cons, and Examples

August 26, 2022
  • 257
  • 10 min

Starting a business requires dedication, commitment, and working smart. You need to align your specific goals, target customers, pricing, sales, and effective marketing strategies. Regardless of the type of business, you have your customer relation and engagement matter. 

You need to use strategies that will retain customers, increase customer loyalty, increase sales, promote your brand, increase referrals, and convert potential customers to customers. Relationship marketing focuses on end-users retention rather than just making sales.  

You might be familiar with digital marketing, social media marketing, influencer marketing, affiliate marketing, and content marketing. However, how familiar are you with relationship marketing? 

With the digital world evolution, you can get assistance from a reputable startup marketing company to build your relationship with your customers. This will make your business stand out from your competition. 

Let’s dive into what is relationship marketing, its benefits, disadvantages, and valuable use cases. 

What is relationship marketing – how does it work?

Relationship marketing focuses on the overall brand experience, not just sales. It requires making meaningful connections with potential and current customers. The strategy is focused on retaining customers, customer engagement, and preserving customer loyalty. 

The integrated strategies should make a customer choose you over and over again, even in the face of other valuable competitors in the market. In addition, acquiring customers requires a lot of exposure and effort. You can consider consulting a marketing agency for startups to ensure your business grows. 

Relationship marketing’s main aim is to form long-term relationships with customers. Thereby, consider people’s view on your brand – continuous brand improvement boosts the marketing campaign. That’s why you find some companies invest in their social media presence and often answer customer queries without hesitation. This strategy gears toward forming a good customer relationship. A mix of tactics is used to build a great rapport with customers. 

Therefore, build a remarkable brand, capture the customer’s attention, showcase reputable products, treat the customers well, and then try to have a long-term relationship with them. Let’s say, you had a sign-up email box, you can be sending them offers of new deals, discounts offers, and much more. In the end, make it not look like a mailing list. Try to compose unique emails to increase potential customer loyalty and trust.

3 reasons why relationship marketing is important.

Relationship marketing is important for a couple of reasons. Let’s discuss each of them!

  • Creates customer loyalty

Surely you are loyal to a certain grocery store, supermarket, shoe store or online store? Chances are it’s not just about fair prices, but also about how comfortable you feel while shopping at that store. Well, that’s the same thing with relationship marketing, you need to provide reputable products, offer room for feedback, be approachable, and be transparent. 

People stick to where they feel comfortable. Your business staff also needs to be welcoming. As the saying goes, “one bad apple can spoil the bunch”. As a business owner, be as good to your staff as the customers to ensure they pour the same energy into the business.

Many customers will drive miles to come to your store or bypass all online businesses to acquire products or services from you. Relationship marketing = loyalty. 

  • Increase your customers’ loyalty to your business

When customers come to your business, they want to get the best experience. Therefore, with relationship marketing, you will make them have a unique experience that will let them come back for more. They shouldn’t leave feeling disappointed at all, rather they should feel satisfied. 

Even if a customer is just inquiring about something, give them a reason to want to purchase. This can lead to businesses recommending you to their family and friends. Not only does relationship marketing drive sales, but helps to provide insights into the business. 

Source: https://www.customerservicemanager.com/six-ways-to-improve-customer-loyalty/ 

  • Gives more flexible pricing options

With a great relationship marketing strategy, it gives room for flexible pricing options. You can evaluate what worked and what didn’t. You will also know the customer needs and this will build on your business needs. 

Furthermore, you can see what they use and what they wish they got in your business too. Therefore, you can add more services or products. You can also check how the customers purchase certain items and see how to fluctuate the price based on the demand. 

The benefits of relationship marketing

Relationship marketing has some benefits: 

Source: https://www.grazitti.com/blog/tag/relationship-marketing/ 

  • High customer retention rates

If you decide to indulge in relationship marketing, it will increase the chances of customer retention. When customers feel heard and are treated well, they tend to keep coming back for more. Their preference will always be your business. 

They won’t mind traveling miles to seek services from your business. They will even refer others to your business. More referrals = More sales. So, what are you waiting for? 

  • Increased Brand Awareness

Relationship marketing also plays a role in building the brand. When you work on your business, it will be more visible to the public. If you also have active social media pages that you engage actively with your customers, it can lead to more sales.

Also, you can seek feedback and work on it. Therefore, ensure your brand outlook resonates on the different social media platforms. You can also create interactive videos for your customers.  

  • Improved sales figures

The more customers you get, the more sales you make per day, week, and month. You will be able to meet your target and even work towards bringing more products on board. 

However, ensure to be doing business evaluation to see what is currently working and what is not. Strive towards elevating your business from one point to the other.

  • Cost savings for business

Once relationship marketing starts working in your business, it will save on any marketing operational costs that you were using. It will also reduce losses since more people will come back to make new purchases. 

Also, if you have an online store, you can consider having voucher codes or discounts for active customers on your platform. This will motivate them to make purchases. 

Source: https://www.primebpm.com/cost-reduction/ 

  • Market Insight

When you form great relationships with the customers, you can seek feedback and evaluate what is working and what is not. You will even figure out what they require more and what you can change. 

Customers can provide gaps that you can fill using some new business ideas. Also, any new marketing strategies that you enforce will bore fruits. 

Disadvantages of relationship marketing

Certain drawbacks come with relationship marketing: 

  • Involvement of high training and software costs

There are certain tools that you can use to achieve an amazing customer experience. You can use some customer relationship management software (CRM) to manage the customers. In addition, you will need to send personalized messages & emails, respond to feedback, respond to queries, and ensure consistent communication. 

You will also need the Enterprise Resource Management platforms to streamline the operations. This can be a bit expensive on your side. 

  • The importance of recognizing cultural differences

There are different kinds of people on the market. Therefore, you need to recognize the different cultural differences. The approach you use on a certain person in region A may not necessarily work for someone in region B. 

You need to do thorough research and respect your different customers. Cultural diversity can play a major role in your business. 

Source: https://www.muditaconsultancy.com/en/search/?q=%20culture 

  • The negligence of existing customers

You can’t always assume that all your customers will come back to make more purchases. Therefore, even relationship marketing might not work for all your clients. 

Therefore, you need to enforce other marketing strategies like content marketing to see whether it will drive more sales. The world is full of many marketing opportunities. 

  • New customers are no longer a priority

It mainly targets the existing customers to ensure they come back for more. Therefore, in the process, you might end up not acquiring too many new customers. 

However, you can get referrals from your current customers. Even though the strategy is meant for retention and growth, the business should not forget strategies to acquire new relationships. 

  • It takes time

Building customer relationship is not a walk in the park. You need to give the customers room to make a purchase decision. They will need to take their time before they become loyal to your business. 

Unfortunately, it may take a few interactions before you finally get the customer’s trust and loyalty. Therefore, don’t give up!

Examples of relationship marketing

Here are some examples of relationship marketing use cases:

1. Customer satisfaction surveys

By sending surveys to customers, companies can collect valuable feedback about their products or services. Also, after purchase, you can request product reviews from the customers to rate their satisfaction and how best to improve. 

Source: https://landing.infocorpgroup.com/contacto 

2. Providing services related to the product

A software company may offer training and support services to its customers, while a clothing retailer may offer sportswear in addition to its core product line. 

Just ensure you provide complimentary items that will make the customers happy with their purchases. It’s the little things that matter.

3. Providing Additional Products

A retailer who sells kitchen appliances may also sell cookware sets, food processors, and other related products to encourage customers to buy multiple items from them. 

You can also have a section on “what other customers purchase with this”. This can help make the customer make a purchase decision. 

Increase your sales through relationship marketing

These strategies can help create a great relationship between the customers and the business. If you are not sure of how to go about it, consider consulting a startup marketing company to make the process easier. 

You will retain customers, improve customer loyalty, get more referrals, promote your brand, have flexible pricing options, improve sales, get more business insights and save on some marketing costs. 

What are you waiting for? Get on board and increase your conversion and retention rates with relationship marketing. 

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