Every company should know that people are at the centre of its strategies. The most effective way to conquer them is by creating a close, effective and long-term relationship. All the characteristics mentioned above belong to a strategy called Relationship Marketing.
Nowadays, Relationship Marketing is considered a very effective planning for customer retention. It seeks to know the audience and achieve stable and mature relationships. But how can I achieve this with my audience and understand what my users are looking for? You are just one step away from finding out through our guide.
Summary
- Relationship marketing is a type of strategy that has become very popular. Every company that wants to increase its sales and obtain a better brand image should apply it.
- Its main goal is to create close, long-term relationships with customers. In this way, they create great brand loyalty and purchase satisfaction. It is about maintaining personalized attention with the company’s current consumers.
- There are many ways to apply relationship marketing. The most common within the online world are email marketing, automated marketing and social networks. Each of these actions has very different characteristics.
What you should know about Relationship Marketing
When entering the marketing world, it is very important to have a well-defined concept of relationship marketing. It will help us to have a better brand image and customer satisfaction. Below, you will find a guide with the most frequently asked questions about this approach and their respective answers, to know which concepts should not be missing in a strategy of this type.
What is Relationship Marketing?
Relationship marketing is a strategy that seeks to achieve stable and meaningful relationships with customers, creating purchase satisfaction and brand loyalty. In this type of promotion, they do not look for short-term links, but rather they seek to please customers in the long term.
It is essential not only to capture new customers, but also to stay in the minds of past customers. In today’s highly competitive business environment, it has often been found that identifying and attracting new customers can be up to five times more costly than keeping existing customers satisfied and loyal (1).
The priority is the customer, not the product.
How does a transactional model different from a relational model?
As time went on, marketing was forced to change approaches. They went from one that sought to obtain new sales, called transactional, to one that sought to maintain a lasting relationship with customers. The transactional approach was progressively unable to provide fully satisfactory answers to contemporary business problems (5).
The two orientations mentioned above have very marked differences between them. Below is a table explaining the most important characteristics of each:
| Transactional Model | Relational Model | |
|---|---|---|
| Customer Relationship | Short-term | Long-term |
| Main objective | Constantly get new customers that generate one-time purchases | Maintain a relationship with current customers to keep them loyal to the brand |
| Type of communication they use | Massive. All consumers are communicated to in the same way | Personalized. Each user has individual messages and sales |
| Orientation | Product-oriented model | Model oriented to the market and its customers |
| Development | It is done within the marketing department | It is done in conjunction with the whole company. |
What is Relationship Marketing for?
Relationship marketing is used to bring the customer closer to the company. In this way, first of all, the customer benefits from personalized and quick answers from his salespeople. And, secondly, the company constantly learns about the tastes and preferences of its buyers.
It also generates frequent revenue for the organization. A person with a good brand image rating has a high percentage of buying. Also, a good buying experience produces word-of-mouth recommendations with a multiplying effect on customers.
What are the goals of Relationship Marketing?
One goal of relationship marketing is to put an end to the transactional model that seeks only the purchase of products. Now we are looking for long-term relationships with customers. Relationships are no longer confrontational but cooperative, and the goals shift from market share to customer share (2).
There are other important objectives in these types of strategies. One of them is to win and retain customers and turn them into brand advocates. Another is to compete and stand out in the market based on people’s references. And finally, to maintain a close conversation with them.
Advantages and disadvantages of Relationship Marketing
There are many virtues that arise when a company applies a relationship marketing strategy. However, there can also be disadvantages related to the lack of planning and information about it. Here are the main advantages and disadvantages of applying it:
Advantages:
- Increased additional sales to the audience
- Increased customer loyalty
- Generate greater brand awareness
- Profitable relationship for both the customer and the company
- Excellent brand valuation
Disadvantages:
- It means a constant investment
- In many cases, they focus only on current customers, losing sight of potential customers
Phases of Relationship Marketing
Relationship marketing can be divided into 4 distinct phases. They must be respected in order to carry out a successful strategy. Each of the steps will be explained below:
- Identify what the customer likes and what motivates them. It is about finding relevant content to get the customer’s attention.
- Differentiate yourself through good communication. This is achieved with a segmented and updated database. It is a fundamental tool in all types of organizations, its strategic use will allow obtaining and analysing relevant information from all consumers (3).
- Interact: Recurrent communication is extremely important. Communication with the consumer or customer allows companies to build customer loyalty in a more effective way when lasting and profitable relationships are created and maintained (4).
- Personalize: All consumers have different needs. Communication must be tailored to each type of consumer.
How to implement Relationship Marketing in your business?
Businesses can implement relationship marketing through different types of strategies. As we have seen, these are actions focused solely on the customer, so it is important to generate an exchange of value-based mainly on communication, without losing sight of the product.
There are many and varied tools for implementing these strategies. It is necessary, first of all, to know our audience in order to develop them. Below is a list of the main actions to apply in a company.
- Email Marketing: One of the most powerful tools in Relationship Marketing is Email Marketing. This is because it is highly customizable, and you can use it for different actions (6). Offering valuable content, congratulating them on important dates, and offering unique promotions for each user are some examples.
- Social networks: This is a great opportunity for companies to visualize themselves and spread their messages. But it is essential that the content be of quality and personalized. Below is a graph showing the number of users on social networks in the world:
It shows the number of users who use social networks by region. The two main continents that use them are Asia and America. In contrast, Africa has a relatively low percentage related to digital platforms.
- Marketing automation: This is the automatic sending of personalized content to each customer. Working with automation means that you will talk to the right person, at the right time and on the best communication channel for them (7).
Principles of Relationship Marketing
This type of marketing has three fundamental principles that allow the success of its strategies. These can be seen in customer calls, after-sales services, and personalized attention, among others.
Here you can see the principles with their main characteristics. In this way, you will be able to know the essential terms to achieve a good survival when applying actions related to this marketing.
CRM as a key tool for Relationship Marketing
A CRM is a sales software that stores and organizes millions of key data about each customer owned by the company. A CRM business strategy improves sales and marketing efforts and enables organizations to provide better service to customers (8).
As we have seen in previous paragraphs, these strategies are based on personal attention. Thanks to the mentioned tool, it is possible to track our consumers and understand their demographic and psychological characteristics, and then use e-commerce. Below is a graph showing the top 10 leading countries in e-commerce retailing:
As you can see from the chart, retail sales are very popular in most countries. However, the ranking is led by the Philippines and India, both belonging to the Asian continent. The ranking is closed by Mexico and the United States, both of which are located in America.
Conclusion
In conclusion, relationship marketing is a method that focuses primarily on the customer. Unlike transactional marketing, this type of action seeks personalized attention and high-quality after-sales service. For a strategy of this type to be successful and profitable, it is necessary to study both the competition and our customers and potential customers.
An infinite number of tools can be applied to relationship marketing. Choosing the one that best suits the characteristics and needs of users is recommended. It is important never to lose sight of the fact that, while focusing on current customers, new consumers should not be neglected.
