My personal obsession: Relationship Marketing: The Ultimate Guide

Want to know a secret? Customer retention is much more critical to your company’s success than customer acquisition.

In fact, Frederick Reichheld of Bain & Company found that as little as a 5% increase in customer retention can increase company revenue by as much as 25–95%.

Whether you’re a team of one or more, strategic relationship marketing can help you connect with your customers and engage them long-term.

As a result, you can boost customer retention, increase revenue, and run a successful business without all the costs associated with getting new customers.

Let’s dive into the benefits of relationship marketing, examples of excellent companies that build lasting relationships with customers, and relationship marketing strategies you can employ.

Importance of Relationship Marketing

If customers feel satisfied with their interaction with you, they’re more likely to become a repeat customer and return to your business repeatedly.

After all, existing customers are 50% more likely to try a new product and spend 31% more than new customers.

That’s why relationship marketing is essential for every business that wants to increase revenue long-term without spending more.

Starting at the right time is also crucial. The perfect time to start a relationship marketing strategy is when a customer has made a purchase (or several).

And your goal with relationship marketing is to convert customers to brand-loyal patrons of your business.

To do that successfully, take a personalized approach to client retention and integrate into their lives in a natural and genuine way.

What are the benefits of relationship marketing?

There are various benefits attached to using relationship marketing strategies for your brand. Done right, the most impactful ways to improve your business through relational advertising include:

Strengthening customer loyalty and increasing your customer retention rates.
Generating greater brand awareness and equity through customer referrals.
Scaling up cross-selling and upselling opportunities to an audience who already values you.

Let’s look at a few firms that have adopted a relationship marketing strategy to retain customers. Afterward, we’ll explore how you can implement a strong relationship marketing strategy today.

1. Capital One

Capital One understands its customers deeply — down to the minor inconveniences that plague them most. And one of those is the long TSA line at the airport.

Capital One reimburses all venture cardholders up to $100 when they pay the TSA PreCheck fee. All they have to do is pay for it with their Capital One credit card.

TSA PreCheck expires after five years, and this benefit applies every time the cardholder wants to renew their PreCheck status.

Here, Capital One is demonstrating its brand value to its current audience through:

Offering a perk that’s universally appealing to their base — free money.
Mitigating a prevalent issue, customers face a long-term resolution.

This benefit speaks to a relevant pain point for Capital One customers and makes keeping an account open with Capital One well worth it in the long run.

2. Delta

Speaking of TSA lines, as the oldest operating airline in the United States, Delta is no stranger to relationship marketing strategies that preserve the brand loyalty of its customers.

One of their most effective methods remains their customer loyalty program, the SkyMiles program.

Customers who sign up for this program earn “miles” based on the money they spend with Delta, which can be redeemed for future travel purchases like airfare, seat upgrades, and more.

They’ve also partnered with credit card companies like American Express to expand their miles offering. They offer bonus miles and accruement when customers use their SkyMiles credit cards to purchase.

In fact, if you qualify for the Amex Reserve card, you will also receive complimentary access to the Delta Sky Club.

By employing these relationship marketing strategies, Delta has been able to:

Build a loyal customer base that continues to choose them over competitors.
Seamlessly integrate their business into the lives of their customers through platforms they use daily.

3. Fairway Independent Mortgage Corporation

Buying a home is one of the most important decisions a person can make. During the purchasing process, buyers typically shop around for the lowest rate. But they’re also shopping for a reliable team to smooth the process.

Fairway Independent Mortgage Corporation is an excellent example of a business that takes the relationship marketing approach. For instance, I received a birthday email from Fairway when I needed to make a lending decision.

In addition, the loan consultant sent over some marketing documents with their value proposition and benefits for me as a buyer. Their relationship marketing strategies improved my experience as a consumer by:

Retargeting their audience via email on a major life event like a birthday.
Enforcing their service offering with valuable supporting documents.

Their retention strategies show they are committed to being responsive, respectful, helpful, and, most importantly — closing on time.

This is a recipe for success in the mortgage industry, as referrals are the “bread and butter of any successful loan officer’s business.”

4. Fenty

When pop star Rihanna made her professional pivot to a businessperson in the fashion and beauty industry, the “Talk That Talk” vocalist also kept people talking about what would come of her brand, Fenty, once it made its debut.

Well, Fenty distinguished itself to the point of changing the industry landscape through inclusivity.

For instance, the popular Fenty Beauty foundation includes shades such as “Vanilla” capturing some of the palest tones, and “Espresso” embracing some of the deepest.

Also, her Savage X Fenty lingerie sends messages of size inclusivity and body positivity to their customers through the wide range of sizes (from XS to 4XL) they offer.

Models and celebrities of all shapes and sizes model the clothing during the Savage X Fenty Show streamed on Amazon.

Customers can also sign up with a membership program that offers first dibs on product launches, exclusive content, and access to VIP-only sales. By applying these strategies for customer retention, Fenty has been able to:

Present the brand as a solution and product for all through inclusivity.
Showcase their messaging globally and connect with consumers across borders.

By sending an impactful brand message to its audience, backed up with product offerings, Fenty can stand out from the crowd.

5. GE

Relational advertising offers valuable content to potential and existing customers, regardless of where they are in the buyer’s journey.

GE does a great job of diversifying its content and the platforms on which they’re promoted to ensure its relationship marketing strategy satisfies as many people as possible.

For instance, GE created two sponsored podcasts in the sci-fi genre. It seems strange, but GE positions itself as an “inventor of the future of the industry,” so it makes sense that it dabbles in the world of what-ifs in the sci-fi genre.

Also, the company has a popular YouTube channel that features historic, innovative stories from the perspective of GE employees.

This is because good relationship marketing should appeal to first-time viewers as powerfully as it appeals to long-term customers to ensure your customers grow with you over time.

By consistently offering a diverse range of quality content, GE shows its desire to satisfy its long-term customers even at the expense of short-term wins.

6. Domino’s

In the past couple of years, Domino’s has taken certain risks with its relationship marketing strategy. All for the sake of innovation and improvement.

This includes a series of ads called Pizza Turnaround, where they showcased a series of negative customer reviews before promising a new and improved recipe.

These self-deprecating ads appeal genuinely to viewers but go against any traditional sales playbook, which is why they work. By admitting an area of opportunity, Domino’s re-invented its brand as transparent and honest.

Who wouldn’t want to buy from a company like that?

Domino’s has also done a fantastic job tapping into its digital audience. In fact, 70% of Domino’s sales are now through digital channels. Ultimately, Domino’s has taken innovative steps to cultivate a loyal, long-term customer base through:

Slowly and strategically re-inventing their product and their brand.
Engaging with their customers on their favorite digital platforms.

7. Panera

Panera’s commitment to health and convenience has resulted in 40 million loyal Panera members.

In 2014, Panera issued a statement promising its customers it would remove all artificial flavors, sweeteners, and preservatives from all Panera products by the end of 2016.

The company remained transparent throughout the process, publishing progress reports to demonstrate its level of accountability and transparency to customers.

Though it was a risky decision, their promise paid off big-time in 2016 when the brand could officially say, “100% of our food is 100% clean.”

Also, the brand focused on building customer relationships through personalization. For instance, Panera alerts loyalty members about new food offerings that meet their “flavor profile” based on past purchases.

Panera thus builds lasting customer relationships by:

Making a brand promise and fulfilling this pledge to their customers.
Improving the quality of their products for customer satisfaction.

The company also meets its customers where they are — starting an online grocery business due to the COVID-19 pandemic. Panera even offers home and business delivery, rapid pickup, and catering to improve customer service.

8. Marriott

Undoubtedly, a 35-minute film is not the most traditional avenue a hotel can take to increase sales. And yet, that’s what Marriott chose to do with their film, “Two Bellmen Three.”

This film enables Marriott to appeal to a younger demographic and build brand awareness on dominant platforms like Snapchat. Best of all, their retention marketing content rarely resembles an advertisement.

Instead, it’s typically focused on providing their audience with fun or helpful information on various travel destinations.

9. ArmorSuit

ArmorSuit’s warranty policy begins like this — “Most warranties are limited to 30 days or one year, but with our Lifetime Replacement Warranty, our customers can request a replacement screen protector for a lifetime.

This way, you never need to purchase a whole new kit when a replacement is needed.”

While it might seem ridiculous to offer a lifetime warranty, it makes sense with retention strategies for two reasons:

Maintaining customer satisfaction with their products.
Building strong relationships with their base for the long term.

Now, when their customers need other tech-related products, they’ll most likely check out ArmorSuit’s website first.

Next, let’s explore how to create a strong relationship marketing strategy for your business.

1. Provide personalized, customer-focused service.

Don't focus on your product or service to create a relationship marketing strategy and engage your customers successfully. Instead, make the customer your primary concern. Always ask:

Would the customer want to see this ad?
Would the customer be excited about this Instagram post?
Does our new product delight the customer?

In addition, create channels for direct support when your customers need help. Your retention strategies can include implementing a Facebook Messaging Bot for service-related concerns.

Or maybe you want to answer your customers’ questions via Instagram DM.

By meeting your customers on platforms they currently use, you demonstrate your willingness to help them wherever that takes you. And that’s a tenet of successful customer retention.

2. Engage with the customer where they are.

The reason Marriott’s strategy works is not only because of the content they create but also because of where they post that content. Creating videos specifically for Snapchat is a great marketing strategy example.

It enables Marriott to appeal to a younger demographic on a popular platform with that audience.

So, research which platforms are most popular for your ideal demographic. You're demonstrating helpfulness and understanding by reaching out to them through their preferred channels.

And it’s this sentiment that will encourage users to interact with your brand.

3. Incorporate technology to work more effectively.

Technology might seem counterintuitive to building personalized organic relationships, but it can be the key to solving customer pain points.

As your company grows, it’ll become more difficult to manually connect one-on-one with each customer and satisfy them.

Using an automated marketing system can ensure every customer receives communication from your business and has the opportunity to engage.

Tools like HubSpot’s Marketing Hub can automate workflows and email cadences so you never miss a customer milestone.

4. Offer incentives and rewards for customer loyalty.

To cultivate a long-term relationship with your customers and create lasting brand loyalty, keep engaging with customers after they’ve purchased a product. Consider what you can offer them once they become customers.

For example, a discount on additional products or personalized recommendations based on their preferences, and so on.

By creating a loyalty rewards program, Panera’s customer relationship marketing continues to motivate its customers to purchase additional products.

With information gathered about each customer, they offer unique suggestions based on individual food preferences. And also form a more meaningful relationship in the process.

5. Create valuable content that tells a compelling story.

Customers who have already purchased your product don’t need to see additional product advertisements to become brand loyalists. Instead, make them feel your business offers value, regardless of their purchase intent.

Firms that adopt a relationship marketing strategy attempt to provide quality to their customers continuously.

Marriott’s film isn’t meant to immediately convert viewers into paying customers. The purpose is to increase brand awareness.

And, down the road, when that viewer is ready to book a hotel for an upcoming trip, they’ll remember the compelling film they saw and think of Marriott.

6. Collect feedback regularly.

A relationship works in two ways. To truly develop a meaningful connection with your customers, you must ask for feedback:

What do they want to see from your brand?
What do they like about your product?
What do they wish you wrote about on your blog?

This information improves your relationship marketing strategy so you can meet the needs of your specific audience.

7. Concentrate on building customer relationships for the long term.

There will always be a time for marketing strategies like Pay Per Click ads that generate instant sales gratification. But this moment isn’t one of them.

To foster meaningful relationships that cause customers to connect with your brand, create purposeful content. And also deliver quality service to guide them throughout the relationship.

Doing so will establish brand trust and show your audience you’re not just after a quick buck. This will also demonstrate your commitment to their success, not just your own.

Play the long game with relationship marketing.

Quicker marketing strategy wins have their place and are paramount for hitting goals and KPIs each quarter. However, your marketing, sales, and service teams work better while playing the long game.

Relationship marketing won’t score you consistent, quick wins that you can measure with complex numbers on a dashboard.

But staying the course and nurturing customers through relational advertising will produce happier and more loyal brand advocates for quarters and years.

Editor's note: This post was originally published in February 2019 and has been updated for comprehensiveness.

from Marketing https://blog.hubspot.com/marketing/relationship-marketing