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4 Things to know about customer relationship marketing

Posted by ConsumerAffairs
ConsumerAffairs

You have probably heard that word-of-mouth is the gold standard for getting your brand name out there. After all, the numbers and the logic prove time and time again that when people get recommendations from their friends, they become more likely to buy. This idea has evolved into something perhaps more powerful than customer relationship marketing.


With this method, you actively cultivate meaningful relationships with your clients. You use the data and feedback that your customers provide to create emotional connections with your brand. Not only do the brand loyalists stick around, but they also talk about your company more often than they might have without the relationship. It gives your team the best of both worlds.


The idea is to put current customers first, which can be a difficult shift for some brands to make. Don’t let that stop you. Below are the top four things you need to know to start using this powerful tool in your company:

 

1. It Costs Less to Retain Existing Customers


At the heart of customer relationship marketing is the idea that businesses should prioritize making their existing customers happy over finding new clients. Not only does this create meaningful relationships with your customers, but it’s cheaper than finding new ones.


To keep a previous customer coming back, you need to spend about 11 percent of what you would shell out to gain a new consumer. That’s an 89 percent savings, which is hard to pass up. Even with this much smaller investment, you can get incredible returns.


2. Retention Makes Your Business More Profitable


The idea behind relationship marketing is that you keep your customers engaged with your company. Not only do they feel an emotional connection to your brand, but they come to you every time they need something that you sell. They do not even consider competitors because they know they can trust you.


This powerful connection makes the ROI for customer retention truly incredible. Some experts report that if you can increase your customer retention by just five percent, your business will be 75 percent more profitable than before.


3. You Probably Can’t Afford Not to Do It


As you now know, retaining customers can net you plenty of money. The other side of this coin is just as important to explore. If you start losing customers due to poor service and diminished relationships, your bottom line could suffer greatly. Not only will you need to replace the customers you lost, but it will be more expensive to find them.


It doesn’t take much to lose a once-loyal customer. In fact, if you’re not actively engaging in relationship marketing and providing excellent customer service, you run the risk of clients walking away. Sixty percent of consumers say that they have left a brand after having a negative interaction with a customer service representative.


When customers go, they are gone for a while. Nearly 80 percent of high-income households leave brands for at least two years after a bad experience.


4. Relationship Marketing is Not One-Size Fits All


Perhaps the most important part of implementing relationship marketing in your customer service is to make it your own. It should fit within your larger brand messaging and work for your unique clients. Think about the things that are most important to your customers and then design relationship marketing techniques around these ideas. Some things that can work include:


  • Loyalty programs

  • Free, helpful content

  • Frequent communication

  • Responding to online feedback--good and bad

  • Surprising them with extra benefits


As you take on relationship marketing, be sure to make it valuable for both you and your customers. After all, the word “relationship” is in there for a reason. With excellent customer service and thoughtful interactions, you can retain existing customers and make them into your own brand advocates.

Tags: Reputation Marketing, Marketing