As a business, you are constantly managing your sales funnel–from the first point of contact with a prospect to their purchase of your service.  But it doesn’t (and shouldn’t) stop there. Perhaps the most important part of your sales funnel is the follow-up post-sale. It’s in this time of follow-up that you build the ongoing relationship that will lead to customer loyalty and, hopefully, customer referrals. Relationship marketing is the key to customer satisfaction and long-term company success. Let’s look at the importance of relationship marketing as well as examples of high level strategies your team can employ to achieve prosperity.  

Relationship Marketing and the Bottom Line

Before we dive into strategies for relationship marketing, you need to understand WHY it’s important.  Gaining a new customer in a crowded market is hard. According to Invesp, “The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%.” It’s also notably more expensive to reel in that new sale. In fact, it costs between 5-25 times more to gain a new customer than to retain an existing one. And while you are focusing on gaining the new client, you are likely not spending the same amount of time nurturing current client relationships. That lack of attention can affect your bottom line. Enter relationship marketing. Relationship marketing centers on fostering strong connections with your customers that can enhance your business overall. By just increasing customer retention rates by 5%, you can increase profits by 25-95%!  Relationship building and relationship marketing must demand your attention or you’ll see lower profits due to higher cost of acquiring that difficult-to-obtain new customer.

Relationship Marketing Strategies

It’s clear that relationship marketing can help you tend to your current relationships, which in turn can ensure customer loyalty in the long term. Check out some effective relationship marketing strategies you can implement to build stronger, lasting connections with satisfied clients. 

• Spend the time and money on building an excellent customer service department. 

When your client has a service issue, they do not want to end up being passed off to the next computerized voice, supervisor, or department just to end the call without a solution. You want to make sure that they feel heard, understood, and have had their problem resolved at the first touch-point. Take the time to cultivate a top-rated customer service department. Building a great customer service team is an excellent relationship marketing technique to ensure your clients know you’re there to support their needs. And after all, one positive customer service interaction can result in a great review and referral to your business.

• Create a customer loyalty and/or referral rewards program.

Another great relationship marketing strategy is the creation of a customer loyalty or rewards program. Loyalty programs aren’t restricted to a product punch card system. You can develop a loyalty program that rewards current customers with a discount on a new service or a reduced service fee for a current offering. The same goes for referral rewards. Encourage referrals from your clients and send a thank you card or gift when they respond.  Lack of customer loyalty affects your bottom line. CallMiner’s Churn Index 2020 states, “US companies lose $136.8 billion per year due to avoidable consumer switching.”  It’s worth the time to focus on this relationship building strategy so they result in devoted, long-term customers.

• Regularly ask for feedback.

Communication is a two-way street. You can spend countless hours sending emails and posting to social media accounts about all the things your company does, but if you never ask your clients what they think about your business, you’ll stagnate. Open up the lines of communication in your client relationships, and ask for customer feedback. This is a great relationship marketing tool because it offers you a chance to fix a problem — and makes a customer feel heard. When you get positive feedback, publish it. It’s one thing to hear about why a company thinks they are the best, it’s another thing to hear why their client thinks they are. 

We hope these examples could help demonstrate the importance of relationship marketing for you, but to review, relationship marketing is simply instrumental in creating a thriving business. It builds customer satisfaction, retention, and elicits ideas for improvement while also producing opportunities for you to shout the praises from long-term customers. Take the time to cultivate these relationships and you’ll see your business is better for it.