They’re just my contacts, aren’t they? What is Relationship Marketing?
Sometimes the tools for leveraging sales and building strategically important relationships are sat right in front of you, but you just don’t see them. Often ‘contacts’ held across organisations and teams, whether in various databases, peoples’ inboxes or on historical sales orders, are completely undervalued and under-utilised.
And yet when we talk to businesses about business development and referral networks, we’re often met with questions like ‘they’re just my contacts aren’t they’? In this blog we counter this view and suggest that relationships are one of the richest sources of marketing data any organisation has, and failing to maximise contacts means many sales and marketing teams are missing a trick.
What do we mean by Relationship Marketing?
The simple fact is ‘yes’, these people are your contacts but it’s what you do with them that counts. Creating loyalty and connections to your brand through Relationship Marketing can lead to ongoing business and increased word-of-mouth recommendations. For example, there might be professional contacts, whether friends, peers or people you’ve done business with before, who can refer clients to you, and vice versa. Building reciprocal referral relationships can be extremely lucrative.
When it comes to relationships with past and existing customers, they present an enormous opportunity. According to Marketing Metrics, “the probability of selling to a new prospective customer is 5%-20% whereas the probability of selling to an existing customer is 60%–70%.”
It’s important to have an understanding of your Customer Lifetime Value which is the “total worth of a customer to a business over the entirety of their relationship”. Having an understanding of this can help to identify what opportunities there are for a relationship-based model with your customers.
We often find that Relationship Marketing is left out of small to medium sized businesses’ Marketing mix, so it’s worth looking at the right approach and what may help small teams and business owners implement a Relationship Marketing strategy.
The right approach
The key to Relationship Marketing, which essentially means building long-term engagement with external parties that drives business value, is understanding that it is a long-term approach and shouldn’t be looked at as a quick fix to improve sales.
Your brand is key to Relationship Marketing, if a customer feels an affiliation with your organisation and alignment with their own values and beliefs this can build loyalty and create competitive advantage. It reduces the desire for customers to switch between brands and develops that all-important relationship between buyer and seller.
An important part of developing that relationship involves processes within your business, ensuring your customer experience is streamlined with touch points (interaction between buyer and seller) at the right time can ensure that your customer experiences is a good one! This process should also include how complaints are dealt with and how customer loyalty can be rewarded throughout the customer’s lifetime.
Technology can play an important role in Relationship Marketing, helping to foster relationships, ensure access and accuracy of data and to ease the administration involved with offering that all important ‘personalised experience’ with your brand.
Finding the right technology to embed within your business is key and should be determined by your own unique requirements and integration opportunities with current systems.
There’s an endless number of systems and providers, but some of the popular CRM (Customer Relationship Management) Systems available for small to medium sized businesses include:
- HubSpot CRM
Then there are tools which aren’t designed solely for CRM, but which many organisations are using to create powerful databases of contacts which slickly and very smartly integrate with other tools within the business. For example, Airtable and Google Contacts.
Social media can also play a part in your approach to developing customer relationships, with the fast-paced interactions across social channels supporting real-time responses to customer queries. Social media has evolved beyond a ‘broadcast only’ approach and is now a powerful listening tool, assisting in developing a personal approach to customer interactions by understanding things like sentiment, tone and what matters to them.
Finally, other marketing tools such as email marketing software (think Mailchimp, Pure360 etc.) all play their part in the relationship mix too. Personalised email communications that use dynamic content to serve up the most tailored messaging and content to the recipient, really help strengthen an audience’s perception of your brand. Tools that enable large-scale campaigns to be automated, allow sales, marketing and all customer-facing teams to communicate regularly with key contacts.
We have developed Relationship Marketing strategies for a variety of different businesses, please get in touch if this is something you would like to explore further.