In this installment of the Definition of Marketing Series we learn about relationship marketing. This is one of the most visited presentation on slideshare with thousands of views and hundreds of downloads.
Relationship marketing is important because if focuses on strengthening those elements of your marketing strategy that contribute to retaining existing customers. Research suggests it’s 5X more expensive to replace an existing customer/ client because acquisition costs are so high.
The popular notion of CRM (Customer Relationship Management) makes you believe customer retention relies on monitoring customers and managing your interactions with them. This is very much a sales oriented way of looking at customer retention.
From a marketing perspective, customer retention is much more complex and relies on a variety of strategies, not just communication.
So, what are some strategies to retain existing customers:
Treating customers like people
When I did a faculty internship at Grey Advertising in NY, the VP started a program he called “Customers First”. Many folks working in the agency were confused about what this slogan meant.
Customers are people first. So treat them that way.
Not only do they buy your brand, they recommend your brand, advocate for it, and help other customers when they have problems buying or using your brand.
They’re very valuable.
86% of customers quit doing business with a company due to poor customer service in 2010
How’s that for value. Replacing 86% of your customers is expensive and wasteful.
That’s why firms go to great lengths to provide good customer services. And, providing a little extra goes a long way to smoothing over any service failures. Walk into some hotels now and you’ll find a little treat (a cookie or some other treat) designed to compensate for any little problems your might encounter during your stay.
Relationship marketing is also critical as it underpins successful social media marketing strategy.
Also presented are changes necessary to implement a relationship marketing strategy.