Relationship marketing is a hot topic online, driven by the explosion of social media.
It emphasizes customer retention and satisfaction, rather than sales.
As a small business owner, what does this mean to you?
Did you know that 60% of customers who leave do so because they feel the business is indifferent to their needs? That statistic was from a year ago. The actual number may be higher now that customers actually expect you to want to maintain and grow the relationship. Customers can detect insincerity and indifference, and they will leave you to the competition if they detect that in you.
In markets with increasing competition, experts say it costs 5 times more to attract new customers than it would to retain current customers. So, customer relationships are key to your marketing strategy.
Relationship marketing differs from other forms of marketing in that it recognizes the long-term value of keeping customers.
Everyone wants long-term customers, but there are common mistakes that marketers make in trying to retain their customers. These include:
1. They lack a marketing strategy directed at retention – Usually marketing strategies are designed to promote the sale of products or services.
2. They don’t understand that relationship marketing is about marketing means that your goal is to get the customer to continue shopping and to come back often.
3. They don’t recognize the power of what marketers call the “relationship ladder”. As a relationship marketer, you want to move the customer up the rungs of this ladder. This ladder groups customers according to their level of loyalty, going from:
Prospect > Customer > Supporter > Advocate > Partner
4. They don’t treat relationship marketing as a process over time. Relationship marketing involves a series of stages in the relationship ladder. This involves customizing programs for different customer groups, instead of sending everyone the same promotion.
5. They don’t take specific steps to retain customers. Here are some actions you can take to retain customers:
- contact your top customers or clients regularly.
- keep your name in front of all your customers by advertising, networking and sending email regularly.
- Give current customers good deals.
- Do something special and unexpected for some of your best customers.
- Get a contact manager to stay in touch of all your clients.
- Don’t take customers for granted.
- Segment your lists according to specific customer needs.
Here are some aspects of relationship marketing, it:
–treats marketing as a continuous process rather than a single, sales event.
–achieves high customer satisfaction.
–is highly profitable.
–involves a series of stages.
–means bonding and connecting with your audience.
Relationship marketing begins with good communication. Listening to customers helps you identify their needs and allows you to tailor your products accordingly.
The essence of basic relationship marketing is the fact that people do business with you when they know, like and trust you…as we’ve all heard before.
From an article entitled, “Customer Relationships Are Key to Your Marketing Strategy” by Laura Lake, here are some interesting statistics about repeat customers:
1. They spend 33% more than a new customer
2. They give you 107% more referrals
3. They are 1/6 less expensive to sell something to
As a small business entrepreneur, your marketing dollars will go farther when you nurture customer relationships. It means getting to know your customers so that you can offer them the right products at the right time at the right price.
Here are some tips for incorporating the human element in your relationship marketing strategy:
1. Get from behind your computer (or out of your office) and start networking.
2. Allow customers to see and get to know your staff.
3. Respond quickly to emails and questions posted on social media.
4. Make it easy for customers to reach you.
5. Encourage their participation on your blog or other social media.
Top Facebook marketer, Mari Smith, actually rewards her top fans by designating them as “Super Fans”. They act as customer advocates and answer questions that other fans may have on her fan page…without getting paid for it.
More and more businesses are understanding the importance of building an online community using social media. Mari says that you can build a following over time if you:
1. Have excellent listening skills to determine what the customer wants and needs.
2. Develop a community by creating great and consistent content, having a strategy to encourage engagement, and respond quickly.
3. Show empathy and compassion
By incorporating all the above comments, statistics and tips into your online marketing strategy, you should be able to increase your sales. Remember that showing your customers and clients that you truly care, while capturing new customers, is the key to your online relationship marketing success.
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