Over the years I have learned that the best type of marketing is word-of-mouth (as most of us would know) and the best way to get word-of-mouth marketing is by forming and nourishing relationships. Relationships are what successful businesses are built on and the best way to market yourself and your business.

Whilst researching for this post I came across three articles in particular that resonate with me and therefore I am quoting some of their subject matter in the coming pages; as well as some of my own previous posts in reference to different types of marketing.

What is relationship marketing? It focuses on personalised communication with your customer. It aims to build, develop and maintain the relationship between your customer and the company – development, which benefits each party.

The purpose of relationship marketing is not to land a transaction, but to build long-term customer loyalty and engagement. Client relationship marketing has been shown to drive new leads at a higher rate than traditional efforts. Building relationships typically takes the form of regular two-way, permission-based communication designed to achieve dialog with the client. Here’s how to use relationship marketing & put it to work for your company.

Before we look at how to use relationships as a marketing tool, let’s take a look first at several benefits of developing this type of strategy for your business:

Relationship Marketing:

Helps You Retain Long-Term Customers

Research has shown that the longer a customer stays with a brand, the more valuable they become. In fact, an annual increase of just 1% in customer retention can equate to a 20% increase in revenue annually. When you work on building relationships with your customers, and not just selling to them, you begin to develop loyalty, which means they’re more likely to stick with your brand for the long haul.

Increases the Likelihood of Referrals

Regardless of the dozens of different marketing techniques out there today, word of mouth is still the most powerful, with 84% of consumers citing the recommendation of a friend or family member as their most trusted source when making a purchase decision. The more satisfied and loyal your customers are, the more likely they will be to refer your brand to others. The best way to achieve this is through relationship marketing.

Makes Price Changes Easier

Many businesses hate raising their prices for fear that they’ll lose customers as a result. Yet, with the economy the way it is, price increases are something we all have to consider from time to time. A solid relationship marketing strategy can help make rolling out a price increase much smoother. That’s because when you’ve worked hard on the front end to develop relationships with your customers, the resulting loyalty will make them less likely to leave over a price change. (This link is a little dated however I believe still applies).

Creates an Excellent Oppurtunity for Feedback

When you've got a whole slew of happy, loyal customers in your corner, you've got an instant test market at the ready. Whenever you need to try out a new product or propose a new service, your loyal clientele will be there to offer feedback. Want to know how you're doing? Ask your long-term customers. Their feedback can help you determine what your business' greatest strenghts are as well as identify areas that need improvement.

Will Give You a Competitive Advantage

The good news for you is that not everyone has jumped on the relationship marketing bandwagon. That means that there’s a pretty good chance at least some of your competitors are not yet leveraging this powerful tool for their own benefit. When you offer a more personal touch with your products or services, you’ll easily achieve a leg up on those that are still stuck in the sales-driven marketing era. That alone is worth its weight in gold.

Some simple tips to help you get started on the right path toward a more relational approach to marketing:

Building Credibility

Before you can expect prospective customers to be at all interested in establishing a relationship with your company, you’ll need to build up credibility and trust. Become a “center of influence” for your industry by developing your personal profile as a business and thought leader. Some of the ways you can do this are:

• Maintain visibility through public commentary, press releases, and statements.
• Develop a social media presence that shines a light on others, engages followers in real conversations and works to make a difference to your audience.
• Host industry events and be present, engaging and visible at these events.

Your reputation also depends on your consistency, quality product and customer service, so make sure these aspects of your business are sound.

Using Data to “Be There” for Customers

It’s vital for you to be available to your customer when he or she needs you. By using data to segment your target audience, you’re able to identify your prospects at each stage in the buying cycle. There’s little point, for example, in sending out a communication exhorting your prospect to “buy now” if he’s only at the information-gathering point in his cycle.

To develop a strong, emotional connection with your client you need to know what he wants, when he wants it and how he wants it. The use of big data for CRM makes this possible, and by analyzing the way prospects use your website and content you can gather a significant amount of information about them.

Focusing on Engagement

One-way communications no longer cut it. That’s why inbound marketing has become such a dynamic practice in today’s business environment. Engage your clients through regular contact, communications, automated lead nurturing and feedback opportunities. Some ways to do this include:

Engaging through social media: Set up hash-tags to identify what your followers are talking about.

Automating your communications: It’s really difficult to find time to build and manage client relationships personally. The good news is that you can get sophisticated CRM software that does much of it on your behalf. It enables you to:

• store all the information you have about prospects
• segment them into target groups based on their previous interactions with your company or their interests and preferences
• trigger automatic communications based on certain actions they take, such as visiting a particular page on your website
• send regular “drip” emails to help them keep your company top of mind

Using feedback to your advantage: It’s essential to take notice of what your customers want.. Relationship marketing provides multiple opportunities to gather feedback. When this is added to your customer database, it accumulates over time to provide knowledge you can use to identify patterns and inform protocols.

Educating the Audience

Nothing builds relationships as much as providing information of value does. Education is a powerful marketing strategy.  Educate your audience by creating an online repository of content that they can access for anything pertaining to your industry, product or service.

If you can become the “go-to” source for all things related to your offering, your customer will begin to view you as an expert in your field, a reliable avenue for information and a helpful resource. Once that relationship is established, you’ll not only have data identifying the prospect but Intel that shows his needs and wants, his stage in the buying cycle and his preferred channels of communication.

Improving Customer Retention

Once you have succeeded in establishing a relationship with the client, it’s important to find ways to keep him satisfied. Apart from the obvious need to deliver quality customer service, you can use CRM tactics to reward and recognize longevity. Some ways to do this include loyalty programs, special promotions, referral incentives, and rewards. These create a sense of a two-way, reciprocal relationship, which builds customer allegiance and makes you the client’s first choice provider in all circumstances. That’s the very best way to drive new leads.

I wrote another article mid last year 

as well focusing on Partnerships & Collaborations which is relevant here also. In that article I talk mainly about forming business partnerships for win-win results and how these can be profitable for all parties at a minimum cost. You can read more about that here: http://linkd.in/1FSPpvn

Refrences:

http://www.riverbedmarketing.com/how-to-use-relationship-marketing-to-drive-leads/

http://freshmail.com/blog/knowledge-and-reports/relationship-marketing-can-use/

http://blog.getambassador.com/what-is-relationship-marketing/