5 min read
As the marketing adage goes, it costs more to acquire a new customer than to retain an existing one. To achieve a higher degree of customer loyalty, one of the tactics is relationship marketing, which enables marketers to engage each customer on a personal level, based on that customer’s specific needs and wants.
What Is Relationship Marketing?
Relationship marketing is a type of marketing that involves nurturing deeper, more meaningful connections with customers to build retention and loyalty.
Unlike customer acquisition marketing, which focuses on short-term transactions and sales, relationship marketing is all about ensuring customers don’t just buy, but that they keep coming back. It is a long-term strategy that makes each customer more profitable, less likely to churn – and even willing to advocate for you.
The focus of relationship marketing isn’t the product or service. Instead, it is a strategy that involves improving internal processes to deliver exceptional customer service, build emotional connections, and delight customers at every touchpoint.
Today, big data and digital technologies are increasingly playing a big part in optimizing relationship marketing strategies. This is because they give brands the power to better understand who their customers are and what they want – and to connect in more frequent, seamless, and meaningful ways.
3 Examples of Brands Doing Relationship Marketing Right
IKEA is not just a store; it is an experience. It is also a place for meandering around on a Saturday afternoon and for buying and eating meatballs. This, alongside great prices and the fact customers feel involved in the process, is one of the big reasons this iconic Swedish furniture brand has such a strong, loyal following.
However, it is not just in-store that IKEA works on its customer relationships. From its strong brand identity to its AR experiences and well-thought-out content strategy and social media activity, everything it does is with the goal of building connections with its customers.
It also practices proper responsiveness, quickly addressing any customer inquiries or complaints. Plus, it takes the time to get to know them. For example, its First 59 campaign asked customers about their morning routine – to which IKEA responded with advice and tips.
Beauty brand Sephora was first set up in 1969, but the brand is still going strong in 2020 and has built a loyal following of customers. One of its more recent relationship marketing campaigns was focused on open, honest two-way conversations through the phrase “Let’s beauty together”. This included hosting live social media events where customers could ask the founders questions.
Other things the company is doing right in terms of relationship marketing are teaching beauty, adding humor, and building a community through social platforms, including Instagram, Facebook and Snapchat. It also offers unique experiences such as the Sephora Virtual Artist, which lets customers virtually try on any shade.
Sephora also uses big data to optimize its segmentation and better target customers at the right time throughout their journeys. Plus, the brand has a popular loyalty program, which rewards members for every dollar they spend.
3. Marriott International
The hospitality company, Marriott International, firmly believes that a focus on loyal customers is the way to drive sustainable growth. This means having a brand portfolio and a unified loyalty program that rewards customers in tangible and meaningful ways. It also believes this loyalty mindset should go beyond marketing to permeate the entire organization.
For Marriott, loyalty goes beyond the booking; it is about inspiring people about potential travel, dining and entertainment experiences. By partnering with other companies, Marriott offers customers the chance to earn points when they book tours through its Moments Platform.
The company is also very active on social media, even bringing it to life through M Live. By monitoring its social media channels, it is able to reward customers who post something nice there and then, such as by offering them a free drink. It also lets reward members check-in and check-out via an app, creating stress-free experiences.
How to Create a Sound Relationship Marketing Strategy
Like any marketing strategy, a sound relationship marketing strategy starts with a proper plan with clear, definable objectives.
Step 1: Develop powerful mission and vision statements that resonate with your target audience, and can be used to unify your business. Once you have this clearly defined, it is much easier to attract like-minded customers.
Step 2: Use demographic, historical, and behavioral data to better understand who your customers are, what they want, and how you can woo them. With this insight, you can segment your customers into buyer personas and then develop engaging marketing content for each group.
Step 3: Work on building those emotional connections – the ones that drive loyalty. The more emotionally connected people are to your brand, the longer they will stay with you. Here are some ways you can do it:
Show your brand personality – Show photos of your employees, add humor, and support causes that resonate with your mission and audience.
Inspire confidence – Make sure all of your communications and brand experiences are consistent.
Deliver exceptional experiences – Engage people with highly-personalized content and campaigns.
Ask for feedback – Relationships are a two–way street. To foster them, make sure you are engaging customers in two-way conversations. In addition, ask for feedback and take action based on it.
Be purpose-driven – Support good causes, use environmentally-friendly practices, give back, and show social responsibility.
Leverage your communities – Build communities across multiple platforms and encourage people to connect and share stories and content.
Step 4: Evaluate your strategy to determine its success. While metrics to track could include sales, also look at:
If people are interacting with your brand more
If more emails are being opened
If you are attracting more social followers
If you are getting more referrals
Building customer relationships is not just about connection, it takes commitment. To build the emotional bonds that drive loyalty, you need to invest both time and money, get your entire organization on board, and be willing to play the long game. If you do this, you can reap the rewards of relationship marketing.
* Want to know more about how to take your customer engagement to the next level with AI-driven technologies? Get in touch with our team today for an exclusive consultation.