Relationship Marketing: The Key to Customer Loyalty and Long-Term Brand Success.
June 29, 2023

Relationship Marketing: The Key to Customer Loyalty and Long-Term Brand Success.

If you’ve been in the eCommerce marketing space for any length of time, you know that retaining customers and building long-term relationships is incredibly difficult.

In fact, it’s one of the biggest challenges you’ll face. 

Getting and keeping great customers in today’s high-paced world is like trying to catch cottonwood seeds as they float by.

What makes it even more of a challenge is today's highly competitive business environment (if you’re in the US, competing with more than 2.5 million other stores for a prospect’s attention).

But if you’re up for the challenge, relationship marketing is a great place to begin.

Relationship marketing, a crucial facet of customer relationship management (CRM), focuses on fostering customer loyalty and long-term customer engagement, rather than short-term goals like customer acquisition and individual or transactional sales. 

In this article, let’s explore the concepts of relationship marketing, its importance to eCommerce brands, the benefits of the strategy. We’ll then move onto how to implement a successful relationship marketing strategy.

We'll even show you a solution to drive 1:1 human connection by using the principles of relationship marketing to help your customers make better buying decisions... but more on that later.

What is Relationship Marketing?

Relationship marketing is a marketing strategy designed to create strong, emotional connections with customers that lead to customer loyalty, ongoing business relationships, free word-of-mouth promotion, and the customer's agreement to willingly provide your brand with valuable information to help you guide their shopping experiences. This approach stands in contrast to the more traditional transactional marketing approach, which focuses solely on increasing the number of individual sales and using pain to acquire new customers.

The primary benefit of relationship marketing is that it helps companies build loyalty among their customers, who in turn, become advocates for the brand.

Through building relationships with customers, marketers are able to gain valuable insights into customer preferences, behaviors, and buying patterns. 

For example, Humankind's conversational commerce software allows eCommerce brands to collect rich customer data that will help them build a 1:1 human connection with the customer to better serve their needs. This data can then be used to customize marketing strategies, and target specific customers with personalized offers, that increase sales, and profit margins, and create insane loyalty to a brand.

Why is Relationship Marketing Important?

Depending on your margins, acquiring new customers today can be incredibly costly and challenging. If you look at the cost of acquiring a customer in 2023, Twilio/ Segment's data estimates average CAC to start at around $127 on the low end, to more than $530 on the high end. This means that it is essential to focus on retaining customers and generating repeat purchases to mitigate the high costs of customer acquisition.

Relationship marketing helps you achieve this goal. Over the long term, emphasizing customer retention, customer satisfaction (CSAT), and maximizing customer lifetime value (LTV) is far more profitable than focusing on closing a single transaction.

Relationship marketing is becoming a core focus of CRM because of its ability to stay in close contact with customers, understand how they use a brand's products and services, and identify additional unmet needs that customers have. By meeting these needs and providing tailored information, brands can create stronger connections and increase customer satisfaction.

If you look at the previous example; Humankind, our software allows a brand to collect data vital to the shopping experience before interacting with the customer - this way the personal shopper, remote concierge, or product expert can provide personalized responses, tailored to the customer’s individual needs.

Reasons to Implement a Relationship Marketing Strategy

We've touched on several of these topics in the previous sections, but there are several reasons why businesses should consider implementing a relationship marketing strategy:

  1. Higher customer lifetime value (CLV): Relationship marketing creates loyal customers, leading to repeat purchases and a higher CLV. Loyal customers are also likely to become brand advocates or ambassadors, recommending products and services to friends, family, and business associates.
  2. Reduction in marketing and advertising spend: Customer acquisition through marketing and advertising can be expensive. Relationship marketing encourages customers to do the marketing for a brand through buzz marketing, where customers tell others about a brand's products and services, driving sales. Brands with exceptional relationship marketing programs spend little to no money on marketing or advertising.
  3. Stronger organizational alignment around the customer: Organizations that emphasize relationship marketing have a stronger organizational alignment around an exceptional customer experience. Teams work together to create satisfied and happy customers over the long term.
  4. Increased brand awareness and equity through customer referrals: Happy customers are more likely to refer your brand to their friends and family, increasing brand awareness and equity.
  5. Scaling up cross-selling and upselling opportunities: Existing customers who value your brand are more likely to be receptive to cross-selling and upselling opportunities.

While each of these metrics has its own individual benefits, they all add up to create an experience where customers feel valued and cared for, which should be our end goal if we want customers to love our products and services.

The Role of CRM Software and Marketing Automation in Relationship Marketing

Not to be confused with the software, customer relationship management CRM is actually a category within marketing. Long before the Mondays and Salesforces’ of the world existed, the practice of customer relationship management was based on 3 key principles, shielding current customers, fostering new ones, and enhancing the asset value of all customers - from an excerpt by MSG.

Today's CRM solutions put these three principles into practice and help brands automate their marketing- allowing automation of the customer relationships.

Marketing automation is a set of tools (back to the software) that enable businesses to increase efficiency by automating marketing tasks like lead generation, email campaigns, and social media.

When integrated, CRM and marketing automation software (like some concierge commerce solutions) together support a relationship marketing strategy by making it easier to record, track, and act on customer information. Social CRM tools go one step further by helping to extend relationship marketing into the social media sphere, allowing companies to easily monitor and respond to customer issues across all channels.

Benefits of Relationship Marketing

As marketers, we're busy. Most of us are nearing the point of overwhelm. So why would we refocus their energy and attention on a relationship marketing strategy?

The answer is simple- relationship marketing helps brands to build trust and brand loyalty with their customers. This doesn't make the initial transaction any easier, but it does contribute to the ease of growing the business as a whole. Here are a few benefits you'll see with a well-executed relationship marketing model:

  1. Customer loyalty and retention: By focusing on building strong relationships with customers, businesses can increase customer loyalty and retention rates.
  2. Brand awareness: Relationship marketing helps generate greater brand awareness through customer referrals, social media interactions, and other forms of word-of-mouth advertising.
  3. Increased sales: As existing customers become more loyal and engaged, they are more likely to make additional purchases and recommend the brand to others.
  4. Improved customer feedback: Relationship marketing encourages customers to provide feedback on products and services, which can help businesses improve and better meet customer needs.
  5. Competitive advantage: Businesses that prioritize relationship marketing can differentiate themselves from competitors and establish a stronger position in the market.

One of the reasons our team at Humankind decided to build our conversational commerce software is to capture as many of these benefits for our customers as possible. By focusing on 1:1 human connections, real conversations with customers, and anticipating their needs, we make sure our customers get the maximum value out of their relationship marketing strategy.

We built our platform after studying more than 1,000,000 customer interactions with some of the biggest brands on the planet so we know what customers want - and our platform gets results. One of our customers OLAPLEX just achieved a 4.94 CSAT score - Our case study provides more information about how we helped them reach this goal - you can read more about it, here.

Examples of Relationship Marketing

There are many ways to execute a relationship marketing strategy. Here are a few examples of how other companies have implemented this approach:

  1. Provide exceptional customer service: Customers who are consistently impressed by a brand's customer service are more likely to remain loyal to the brand.
  2. Thank customers through social media or surprise gifts: Showing appreciation for customers can strengthen the connection between the brand and the customer.
  3. Solicit customer feedback: Asking for feedback through surveys, polls, and phone calls can create a positive impression that customer opinions are valued and help improve products and services.
  4. Use Conversational Commerce Software by Humankind. The reason for this is that Humankind is the only platform that offers a 1:1 human connection between your customers and your brand - this is true relationship marketing.
  5. Launch a loyalty program: Rewarding customers for their continued patronage can encourage loyalty and repeat business.
  6. Hold events to connect with customers and build a community: Hosting events that bring customers together can foster a sense of community and strengthen relationships.
  7. Create customer advocacy or brand advocacy programs: Reward customers who provide word-of-mouth advertising on a brand's behalf with special incentives or recognition.
  8. Offer discounts or bonuses to long-time or repeat customers: Recognizing and rewarding loyal customers can lead to increased satisfaction and continued business.

How to Implement a Successful Relationship Marketing Strategy

As an eCommerce brand, you probably have a few of these in place - if you're building your first store, here are a few best practices when implementing your first relationship marketing strategy:

  1. Establish an emotional connection: Building an emotional connection with customers is essential for creating strong, long-term relationships. Focus on understanding and addressing customer needs, concerns, and interests, and ensure communication is open and genuine.
  2. Utilize beneficial technology: CRM and marketing automation tools can help businesses manage and track customer information, interactions, and communications. These tools can support relationship marketing by making it easier to provide tailored information and respond to customer needs.
  3. Regularly ask for feedback: Encourage customers to share their thoughts and opinions by regularly asking for feedback. This shows customers that their input is valued and helps businesses improve products and services based on customer insights.
  4. Focus on long-term relationships: Center the marketing strategy on building long-term customer relationships, rather than short-term sales and customer acquisition. This can be achieved by providing exceptional customer service, engaging with customers through social media, and offering loyalty programs or other incentives.
  5. Measure and evaluate success: Regularly assess the effectiveness of relationship marketing efforts by monitoring things like AOV, Basket size, Repeat purchase rate, CLV, CSAT, and others- use this data to make adjustments and improvements to the strategy as needed.

There's no doubt that people desire more connection in the shopping experience. They want to be more than just a number to the brands they do business with. According to PwC, 82% of the shoppers surveyed said that they wanted more human connection in the buying experience, and they would pay for it. In other words, 8 out of 10 of your customers will pay more if you build a relationship with them that they value.

Imagine for a moment that your customers were so happy to hear from you, that they willingly gave you access to them on the channels where they're easiest to reach like SMS. That's part of the power of Humankind and why relationship marketing is such a powerful strategy for increasing customer loyalty, satisfaction, and sales. By focusing on building an excellent experience for your customers, you can create relationships that last.

To see how we help brands like OLAPLEX, Taylormade Golf, and Saucony create amazing experiences for their customers, book your demo and chat with someone from our team today!

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