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The purpose of all businesses, regardless of what it offers, is to create and retain customers. Using marketing strategies that build loyalty to your product and brand can help you win customers for the long term. Relationship marketing is more than just sending a list of prospects the same email newsletter in the hope that they may become a customer.
Relationship Marketing - What is it?
Relationship marketing is not about having a personal relationship with your customers – it is about using a well-planned process of communication over time that makes customers feel comfortable and connected to you. It is different from a set of database marketing programs that target everyone, regardless of what stage of business they are in with your company, with the same set of promotions. If a customer has already bought services from you, sending them a communications piece that tries to sell them as if they are a prospect does not work.
For example, one company wasting their marketing dollars in direct marketing is American Express Small Business Services. I just recently received their platinum card for my business. They had a great offer, online services, and no annual fee. Unfortunately, I have since received direct mail offers for several other AMEX cards with virtually the same benefits. Why are they wasting money on mailing me these offers when I already have one of their cards?
This is a case where they need to consolidate their database, segment it based on what the business has or has not purchased, and define a different set of programs with relevant messages that will appeal to these segments. Marketing that is relevant to each specific customer dramatically increases its return on investment because the content and offer in each message is personalized and targeted to each individual. By molding the marketing message and tactics to the customer, relationship marketing achieves very high customer satisfaction, which in turn helps you to rapidly achieve your revenue goals.
Stages of Building Customer Relationships
Relationship marketing is a strategy that builds customer commitment and loyalty through many types of marketing programs. The process is usually defined in stages, working from the relationship beginning to the end. Each marketing effort needs to move the prospect through these stages, helping them build a rapport with you. Even if they become a former customer because of the nature of your business, they should retain their loyalty and trust such that they provide referrals to your business.
Suspect > Prospect > Customer > Partner > Advocate > Former Customer
In the initial stages, you need to supply information so that a suspect gets to know you. You might want to make an offer that encourages them to take some action. If they do, most likely they become a prospect. At this stage, you need to continue to develop the relationship by supplying them useful and practical information for their business as it relates to yours. Eventually you will turn some of them into customers, at which time you need to build trust and loyalty.
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Once you have turned the prospect into a customer, you need to continue to build the relationship. Understanding their needs, providing them superior customer service, and working with them to help them succeed turns a customer into a partner. You become more than another vendor to them, and in fact, you become an extension of their company. Once you have reached this type of a relationship with your customer, you have nurtured an advocate – a resource that speaks highly about your company to prospects, media, and analysts, and works with you to promote your products and services through testimonials and success stories.
Relationship marketing has to be:
Personalized. Personalization can be a highly targeted direct mail piece, a phone call or email. The messages must be meaningful and connect emotionally in order to establish a lasting relationship.
Targeted and relevant. If you are targeting prospects, your marketing has to instill confidence, trust, and success. If you are targeting current customers, your marketing has to establish and reward loyalty.
Interactive. By making your interactions with customers interactive, you hear feedback, determine what is working and what is not. If your customers or prospects respond to a request, offer them something that makes them feel valued.
How to Build Loyalty
The best way to build loyalty with your customers and prospects is to listen to what they need from you and make them feel comfortable working with you. If you focus on solving their problems or meeting a particular need rather than selling them a product, you gain their trust. Always act in your customer or prospect’s best interest and never try to sell them something they do not need. Several times when we’ve been in an initial meeting with a prospect, we have suggested that what they needed was not our services. We then point them to someone who can deliver what they need more cost-effectively. This helpfulness will be long remembered and those customers and prospects are more likely to come back to you when they need your type of product or service. Building goodwill with people goes a long way to getting referrals and additional business.
Brand and the Customer Relationship
Why do companies spend money on brand? Remember that a brand is more than an image; it is the essence of your business, a promise waiting to be fulfilled. The success of a brand lies in its ability to create and cultivate a strong and lasting relationship with its customers, a relationship that is loyal and profitable.
Each customer-brand relationship contains perceived values and real benefits that are unique to each customer, in both tangible and intangible forms. People choose a brand for their own reasons. They may be influenced by external means, such as advertising, success stories, research studies or even personal acquaintances, but the decision to use a particular brand is the sole decision of that customer. The brand creates a direct relationship with the customer
Direct Marketing Programs and Building Relationships
Since relationships are personal and direct, what better way to reach and influence your prospects and customers in a one to one fashion but through a direct marketing program? Direct marketing is an information-driven, relational marketing process that connects with your customers on a regular basis.
Direct marketing programs that “touch” your customers and prospects builds loyalty and repeat business. They can encompass many forms such as mail, online, or email correspondence of some type. Get in front of your customers and prospects with some of these tactics to garner trust and build a meaningful relationship.
Plan events that mix knowledge with fun. Educate while offering entertainment and social interaction.
Send out a monthly eNewsletter with useful content relevant to your clients and prospects’ needs. Show them that you care about their business and value their time by providing them useful information. Do not sell. Instead, provide industry and product news with some entertainment value.
Send customers thank you cards or gifts after making a purchase or sending you a referral. You can also send a thank you gift to show appreciation for their business on the account anniversary date.
Look for ways to help your clients and prospects beyond your own capabilities. Refer them to other quality vendors, share an article related to their business or about their competition, or put them in touch with someone who can help. This will go a long way in building a relationship.
Make phone calls. Email is easy but picking up the phone and thanking someone for using your company can go a long way. Don't forget the value of real conversations and face-to-face meetings.
Once you have turned a prospect into a customer, your relationship with that customer should continue to grow. It is far less expensive to cultivate your existing customer base and sell more services to them than it is to seek new customers. To build loyalty in your customer base, focus on their needs through relationship marketing.
--By Debra Murphy, Vista Consulting
Ms. Murphy is a marketing consultant with a background in computer science, management, and marketing. With more than 20 years experience in marketing, her specialty is strategic consulting and management of focused marketing programs, ensuring businesses reach their ideal target market. Debra is a contributing author of "Create The Business Breakthrough You Want: Secrets and Strategies from the World's Greatest Mentors" featuring business giants Brian Tracy, Robert G. Allen, Bob Proctor and Mark Victor Hansen (Chicken Soup for The Soul) and endorsed by Dr. Stephen Covey and Ken Blanchard. Debra is based in Massachusetts and can be reached at 508.303.0766 or via email at dmurphy@vista-consulting.com. For more information or to subscribe to her monthly newsletter for businesses that want more clients, visit her Web site at www.vista-consulting.com.
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