It doesn’t matter what business you are in. If you sell a product or service to real people, i.e. humans with thoughts, opinions and feelings, you are a relationship marketer.
If the term “relationship marketing” sounds a little touchy-feely to you, consider the bottom-line benefits:
- A 5% increase in customer retention rates can increase profits by 25% to 95%
- 80% of a business’s future profits will come from 20% of its existing customers
- It costs 6 to 7 times more to acquire a new customer than to retain an existing one
Sources: Gartner Group, Bain & Company
Relationship Marketing Strategies that Pay Off
So what IS relationship marketing? Sometimes called “loyalty marketing” or “retention marketing,” relationship marketing is about creating connections with customers and prospects that lead to loyalty, referrals and repeat sales. It is not about generating an immediate sale or transaction. Relationship marketing lowers the cost of customer acquisition, increases customer retention AND builds valuable word of mouth.
Here are 5 relationship marketing strategies to let customers and prospects know that you value and appreciate them as individuals and increases the likelihood that they’ll refer your business to colleagues and friends:
1. Make connections, not contacts.
Don’t waste time chasing random Facebook “likes” and other social media status markers. It’s better to engage with a dozen people in meaningful ways than to broadcast to an audience of thousands who aren’t listening anyway. Attending a networking event? Don’t be the person passing out business cards like they are a deck of playing cards. Find three to five people of influence and make a concerted effort to introduce yourself and to learn more about them.
2. Prioritize relationships over promotions.
Build genuine connections by being helpful, i.e., give clients the information and tools that will help them succeed. In other words, don’t make it all about you. Only 20% of your time should be spent marketing and promoting your services. Use the remaining 80% to educate, entertain, encourage and support. It’s not all about the latest and greatest social media, either. Personalized cards and heartfelt gifts are still highly effective relationship builders (we use SendOutCards to stay in touch with clients and prospects throughout the year).
3. Treat every relationship like it matters.
You are busy. Sometimes, it’s hard to give customers the attention they deserve. But every interaction is a chance to improve your business and to build stronger relationships with all customers (remember, social media has the power to magnify your interaction with one customer and make it visible to everyone). Treat every relationship like it matters—because it does. People move between jobs and take on different roles in their lives and in their careers. You never know who will be a decision maker in the future.
4. Don’t take rejection personally.
Let’s face it, rejection feels bad. But not everyone wants to have a relationship with you—and that’s okay. People are stretched thin at work, stressed out at home, or otherwise preoccupied. Don’t take a “no thanks” as a sign of personal rejection. Instead, consider it as a “not right now” that may bring you one step closer to “yes.” (To learn how to move from a “no” to a “yes,” we recommend the bestselling book Go For No! by authors Andrea Waltz and Richard Fenton.) At the same time, don’t assume that someone doesn’t want to be contacted by you because you don’t hear back from them—see the next point, below.
5. Be pleasantly persistent.
Relationships take time. More often than not, you have to work for them. Yet combine persistence with pleasant professionalism and it’s hard to go wrong. Amazingly, 48% of sales people never follow up with a prospect after initiating the first point of contact—yet 80% of sales are made on the fifth to the twelfth points of contact. Keep following up and you’ll not only stand out from your competition but you’ll also build the foundations of long lasting relationships that lead to loyalty, referrals and repeat sales.
All Business is Personal
It’s true: All business is personal. Technology has made it easy to distance ourselves from one another, yet people still want to be recognized and appreciated as individuals. Relationship marketing isn’t new, and it isn’t rocket science. But it does require a willingness to put yourself out there—and to be open to the results!