If you want to increase revenue from existing customers, you must build mutually satisfying relationships with strong communication. Going the extra mile to delight customers is a great start in building satisfying relationships but consistently delivering on your promises goes even further in building relationships with existing customers as well as generating relationships with new customers. Today, we’ll discuss tips to develop mutually satisfying relationships to explode your revenue.
Below, you see how relationship marketing is at the center of your marketing efforts, including CRM, multichannel marketing, customer experience management, and lead generation. First, let’s start our discussion by discussing what customer relationships are then move into how to create mutually satisfying relationships.
Evolution of relationship marketing
In the beginnings of marketing, which derived from a marriage of economics and psychology, the focus was squarely on how to promote your brand without regard for customers owing to marketing’s roots in economics. We call this stage the production era and it focused on making products as generating sufficient supply was challenging before the industrial revolution. Manufacturing low-cost products in sufficient numbers, such as Henry Ford’s notion of the Model T, fueled most companies. The focus didn’t include notions of customer satisfaction because businesses assumed that a cheap product would find a market regardless of quality or customer satisfaction.
Next, came the sales era where the notion prevailed that a good salesperson could sell anything regardless of quality or customer satisfaction. It is here that we see plays such as Death of a Salesman, which depict the intense pressure on salespeople to sell vast quantities of product. The first true marketing era came next in the 1950s when economists and business owners first included customers into their profit equations. Instead of making products to sell to customers, businesses shifted to focus on building products customers wanted to buy.
What is relationship marketing?
Finally, in the 1990s, we come to the relationship marketing era where company focus shifts to building mutually satisfying relationships with customers–where customers become the center of the organization rather than an afterthought. Embracing the notion of relationship marketing, firms recognized the ultimate survival of their firms rested squarely on the shoulders of customers who voted with their dollars (Pound, Euros, Yen …). Fueling the spread of relationship marketing, a Harvard study in 1990 showed that by increasing customer retention by as little as 5% firms increased revenue by 20% to 95%. A later study of online relationships found that initial outlay exceeded profits at the beginning of the relationships while profits steadily increased. Thus, relationship marketing is even more critical in online businesses, especially pure-play retailers.
Relationship marketing is defined by Forbes as “a strategy to foster customer loyalty, interaction, and long-term engagement”. The new definition of marketing adopted by the AMA (American Marketing Association) in 2017 implicitly considers the centrality of relationship marketing while broadening the definition to include partners and society as deserving value:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Instead of paying lip service to satisfying customers, relationship marketing focuses on building mutually satisfying relationships between customers and the brand by focusing on providing value, rather than cheap goods, as was the focus in the production era. As you can see below, value is the culmination of efforts to put the customer first through interactions with the team and the company to provide excellent service (and even product companies provide services such as the warranty and customer support), high-quality products relative to cost, and delivering on their promises.
How to generate mutually satisfying relationships
Generating mutually satisfying relationships isn’t as easy as defining them. First, you must build a strategy then implement that strategy to deliver value on a consistent basis, which isn’t easy. Here are just a few tips for creating relationships with your customers.
Communication is critical for building trusting relationships with customers. In today’s increasingly digital world, two-way communication and engagement with customers not only builds trust but acts to spread a company’s message through social spaces and acts as tacit endorsements of the brand’s message. Two-way communication involves conversations with customers (and other stakeholders), which means listening on social platforms for mentions of your company and its brands. That’s especially true for quickly addressing complaints and rewarding brand supporters.
Due to the nature of social media, two-way communication requires a technological solution except for the smallest of companies. Using tools such as chatbots that work 24/7 without taking a sick day or being out of sorts is a great way to address customer support in real-time. Spend the time to “train” your chatbot since they rely on AI (artificial intelligence) to answer queries and most use ML (machine learning) to get better over time. So, the more you do in training, the better your chatbot will perform. You must also develop a seamless process for escalating issues to a human since you can’t rely on chatbots to handle complex or unique issues.
Listening is another element of communication made challenging by the sheer volume of communication across a large number of social media platforms. Luckily, tools exist to scour the Internet listening for desired conversations, although NLP (natural language processing) is still in its infancy.
Make customers feel special
It doesn’t have to cost a lot to make customers feel special. You don’t have to constantly discount products or offer a little surprise with each package. Including a “handwritten” note with a shipment does a great job of letting customers know you value their business. Remembering birthdays and anniversaries by sending an ecard or an email containing a special offer also makes your customer feel like an individual that you value. Most CRM software comes equipped to handle this task with ease once you set up the proper autoresponder to send in recognition of personal events.
Speaking of email, segmenting your list to send targeted offers to individual subscribers not only makes customers feel appreciated, but it also generates much higher returns than mass email broadcasts. In fact, personalized emails achieve a 26% higher open rate and 6X higher transaction rate.
Reliably high quality
Delivering high-quality goods and services is the key to building mutually satisfying relationships. No one likes a product that doesn’t perform as expected, isn’t easy to use, or breaks down too fast. But, a firm that doesn’t deliver every time loses the trust of customers and, by extension the opportunity to sell to new customers as bad news travels fast.
Increasing product quality and ensuring you deliver quality in every product involves an audit of your internal processes and an evaluation of your supply chain to ensure they do their part to ensure continuous quality. Deming was one of the first to introduce the term of continuous improvement relying on 14-points to deliver quality every time.
Corporate social responsibility
Increasingly, consumers want to buy from firms that support their values and beliefs with actions. Among the most prevalent social values consumers expect, according to Harvard Business School are:
- Environmental responsibility, such as carbon neutrality and recycling
- Ethical responsibility, such as fair wages and working conditions, opportunities for all people regardless of color, gender, and lifestyle, and supporting fair trade by paying suppliers (especially those from economically disadvantaged communities) what their products are worth.
- Philanthropic responsibility, including supporting charities with donations and/or allowing employees to devote work time to a charitable endeavor.
- Economic responsibility by balancing profits with equitable treatment of other stakeholders.
I would add to this careful attention to the causes supported by the organization as boycotts for supporting unpopular causes can hurt profits and damage your reputation. For instance, in May 2021, a #StoptheHate campaign successfully torpedoed efforts to form 2 new Fox News stations in Britain. Several universities are rebalancing their investment portfolios away from unpopular brands with poor social performance as well as renaming buildings or schools originally named for divisive historical figures such as slaveholders and segregationists. A few schools have explored settlements with the descendants of the enslaved people who built their campus buildings, including providing free tuition.
These are but a few tips on how to build mutually satisfying relationships with customers and draw in new customers to help your revenue explode. I hope you found these valuable. If so, please leave a comment below. Also, comment if you have ideas for future posts you’d like to see on these pages.
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