In the competitive market customers usually have many options for the same product or service to choose from. In such case where the customer is entitled to make a selective decision, businesses try to maintain their clients by providing comparatively better products and service which is known as relationship marketing. Relationship marketing is the strategy of improving the relation with the existing or key customers than trying to find new customers (direct marketing). Relationship marketing uses various techniques like sales, marketing, customer care, communication etc to study the need of the customer and how it can change under various circumstances. It is all about maintaining and building trust with the customers. Once customers trust on your product or service, their chances on switching to other company is relatively less. According to a research the cost of retaining an old customer is much less than the cost of getting a new customer which is the key focus of relationship marketing.
Relationship marketing should be:
- Personalized: The messages you send to your customers via direct mail, phone call or email should be meaningful and connect in order to maintain a good relationship.
- Targeted and Relevant: You should market according to the target like whether they are prospects or clients.
- Interactive: Interaction with your customers is important. You hear their feedback, analyze and work accordingly. If your customers or prospects respond to a request, you offer them discounts or other facilities to make them feel valued.
Relationship marketing is one of the best forms of marketing. It benefits you and your prospects. It saves on cost. The cost of maintaining an old customer is 10% of that of marketing for new customers. When you maintain a trust within your customers, there are chances of them recommending it to others also known as Viral Marketing. With relationship marketing there are higher conversion rates (the rate of changing a prospect into client).
There are various stages involved in the process of relationship marketing:
Interaction »» Communication »» Valuation »» Termination
Awareness »» Comparison »» Transaction »» Reinforcement »» Advocacy
You can use relationship marketing approach to customize programs for individual customers. For an example: You have a regular visitor/customer on your site, at some point she stops. There’s a point to ponder why this certain customer has stopped visiting your website, is it your content or has she found an alternative source or is she just not interested anymore. You should check on this or may be interact with the customer and get her feedback. If making some changes or improving some aspects of your site will bring this customer back then your goal’s been achieved, if not you continue working towards it. When this customer actually purchases something, then you can take this as a very significant change in behavior. You have achieved a better relationship now. When this happens you can thank the customer for the trust she has displayed and perhaps provide a second purchase discount or other benefits so that this customer sticks on. If you can track customer behavior or predict them you can start a better marketing campaign accordingly. The cost of this process is less compared to other marketing methods and the money you spend is more effective as well. You can divide the type of customers into different groups like prospects, customer, client, supporter, advocate and partner which is known as “The relationship ladder of customer loyalty”.
There are various software developed to facilitate customer relationship management (CRM). You can make use of CRM software to track their tastes, activities, preferences, complaints etc.
Relationship marketing is all about building and maintaining relationship with the committed customers and clients. Once you have turned a prospect into a customer, you should be able to make the relation better. The benefit of this is it is much cheaper than to seek new customers. You can build better relation with your customers by focusing on their needs with the help of relationship marketing.
MAY 22, 2008 ISSUE #11