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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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