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