A customer may be persuaded to select a brand one time, but without a robust relationship marketing strategy, the customer may not return to that brand in the future. While brands put together elements of both relationship and transactional marketing, customer relationship marketing is starting to play a major role for many brands and businesses.
What is relationship marketing?
Relationship marketing is an aspect of customer relationship management that works toward customer retention and customer loyalty towards the brand, i.e., long term goals. The overall focus of this wing of marketing is on creating strong bonds with the customers and increase brand resonance. This eventually results in long ongoing brand success and word-of-mouth promotion to generate leads. This marketing strategy is an attempt to offer a personalized and more all-inclusive brand experience to the customers to strengthen the relationship with them.
Why is it important?
Gaining new customers can be as expensive as retaining the existing customers over a long period. So, this form of marketing helps to retain the customers which develop more sales and loyalty towards the brand or business. By developing an understanding of customer use of the products and services and knowing about their need and requirements, a brand can develop new features and offers to meet those needs. This strengthens the bond further. Therefore, relationship marketing is very important to stay in contact with the customers.
One aspect that aids in relationship marketing is mass customization. This aspect works on the rising use of the internet and technology. This enables the brands to offer customized products to their customers which are made as per their specifications on a large scale. Being online makes it easy for people to directly reach out to the brand with their preferences and the manufacturer can further use the available technology to produce a product at a cost of other products. This is not just limited to products but also to essential services like banks which are making attempts in developing a more customer-focused experience.
The benefits of mass customization include reduction in inventory, saving warehouse space, the expense of keeping track of the services and cutting down the cost of leftover merchandise. Along with the benefits it has its set of limitations too. One such limitation is the returns on customized products as they may not have a larger appeal.
Overall Benefits of Relationship marketing?
• Increase in customer loyalty and repeat purchases. Loyal customers probably become ambassadors of the brand and recommend its products to other people.
• It helps cut down the marketing and advertising expenses.
• Sturdier organizational alignment around the customer, that is, the teams work with each other to make the customers happy and satisfied.
An example of relationship marketing would be, Starbucks. It upholds communication with the customers through emails to show appreciation and inform them about new offers. It even asks for ideas or suggestions from the customers on their web page. The renowned coffee chain markets its product by sharing short and quick videos and pictures from its customers on Instagram. They repost and regramm user-generated content on their social media accounts which creates additional reactions.
You must have seen the Starbucks Gifs on Instagram. The brand encourages the customers to share through word-of-mouth through their content.