In the not-too-distant past, brand equity and name recognition were the most important assets a company could cultivate. Today, that honor has shifted to a company’s relationship with its customers. In fact, mastering customer relationship management (CRM) can help differentiate brands in even the most competitive industries. According to IDC, “Customers’ expectations continue to rise. Once a few of their commercial relationships become authentic, sensible, consistent and valuable, they expect every relationship to meet that standard.”
For companies committed to investing in building meaningful long-term customer relationships, there’s a significant potential payoff. How can brands use relationship marketing as part of their overall marketing mix?
Understanding Relationship Marketing
Marketing is traditionally associated with acquiring new customers, as they are often the lifeblood of a company’s revenue, yet customer retention has a significant payoff as well: just a 5 percent increase in retention can yield a 95 percent increase in profits. Brands are turning to relationship marketing, which focuses on building long-term connections with customers, to help bridge that gap and reinforce loyalty. Relationship marketing looks at the full lifecycle of the customer experience, from pre-purchase to ownership. With more sophisticated CRM technology, this type of marketing also integrates insights and opportunities from across channels to gather consumer data and create a beneficial customer experience.
How to Master Relationship Marketing
Understand consumers’ expectations. Today’s customers have relationships with brands, rather than make single purchases. Yet brands must first understand what consumers expect those relationships to look like in order to deliver them. The Harvard Business Review notes that brands have to move beyond simply recording demographics and, instead, use relational intelligence to connect customer profiles, behavior across channels and other data to understand specific details of how they would like the customer relationship to play out. Consumers who are looking for quick transactions will be annoyed by too much relationship building, but buyers who want to feel like friends need that additional personalized touch.
Use analytics to develop a clear understanding of current relationship dynamics. How do customers currently view their relationship with you? Where are the opportunities for improvement? An integrated analytics platform with relational intelligence capabilities connects data points and insights from across channels and can help brands understand what is currently happening with their existing relationships. Marketers can also pinpoint opportunities to take the customer experience to the next level. Many companies end their social listening with an understanding of brand sentiment; however, using it to discern customer satisfaction throughout the relationship cycle can help marketers strike the right tone in relationship marketing.
Focus marketing on building “brand love.” Gartner notes that love is a bold word to describe consumers’ relationships with companies, yet for brands that get the customer experience right, it’s an apt term: “A consumer who loves a brand will deepen the relationship and buy more, all without returning to the buy stage to consider alternatives.” To fully embrace relationship marketing, it’s important to focus campaigns on building relationships as a key performance indicator (KPI). Blend your understanding of where things currently are with customer relationships — and what your customers ideally want — to build a roadmap for future interactions.
Create resources and positions to support relationship growth. For relationship-focused companies, invest in specific initiatives that support this area of customer relations. For example, many companies hire Customer Success teams that are dedicated to helping their customers succeed. They focus on following up with customers as needed to help them get the most out of the relationship. Companies also create knowledge centers and other exclusive content and events to help build their one-on-one relationships with customers, as well as creating a community around their brands.
Relationship marketing is the missing link for many companies trying to determine the best strategy for retaining customers and turning current ones into brand advocates. Successfully using this tactic requires re-imagining marketing. Rather than something you do just to make a sale, turn your marketing efforts into an opportunity to build deeper long-term connections with your customers. By incorporating insights from today’s integrated technology systems across the omni-channel business environment, brands such as yours are quickly understanding what their customers want and are forging sustainable paths to deliver it.
Liz Alton writes about digital marketing and her work has been featured in USA Today, Forbes, Inc, Harvard Business Review and Entrepreneur. Her specialties include all things marketing, technology, B2B, big data/analytics, cloud and mobility. She holds a bachelor’s degree in journalism from University of Massachusetts, Dartmouth and an MBA from Western Governors University. She is currently pursuing a master’s in journalism from Harvard University. Liz is a paid contributor to THINK Marketing.