The relationships businesses formulate with customers is critical to their success. Customer relationships impact a business’ ability to increase profits and thrive because customers generate sales in their purchase of products and services.
Relationship marketing is a customer-focused approach and strategy to cultivate customer interactions into long-term relationships that promote brand loyalty, develop brand awareness, and increases sales, growth, and customer lifetime value. Theodore Levitt, an editor of the Harvard Business Review, said, “The purpose of a business is to create and keep customers.” Businesses must utilize relationship marketing to build trust and improve their customer relationships and interactions and engage customers in a manner that builds brand loyalty and repeated purchases.
Relationship Marketing Benefits:
Cost-Effective and Improves Profitability:
Relationship marketing is cost-effective. Focusing on maintaining relationships with existing customers saves businesses money and time. It is less expensive to retain existing customers as opposed to acquiring new customers.
Loyal customers are valuable to businesses because they spend more time interacting with the brand and, therefore, encourage long-term relationships with the brand, which increases customer lifetime value and profitability. Customer profit rates are likely to increase over the duration of the customer’s relationship with the brand.
Develops Customer Advocates and Brand Ambassadors:
Relationship marketing builds strong customer relationships and aligns touchpoints throughout the organization, improving customer satisfaction and delivering consistent and excellent customer experiences that meet its needs. Consistent customer satisfaction generates positive reviews and creates brand ambassadors that recommend and motivate family, friends, and others to support the brand or product.
Encourages Customer Feedback:
Relationship marketing develops strong customer relationships that enable open communication between the brand and customers, encouraging customers to share their views and provide feedback about the brand. Businesses can collect and analyze valuable information from their customers through customer feedback to make better-informed business decisions and improve products and services.
Additionally, relationship marketing creates a strong, emotional connection with customers that maximizes brand resonance. Customers support, promote, invest, and make repeated purchases for a brand or product they believe in, find value in, and relatable.
For instance, American Express, a multinational financial services company, utilizes relationship marketing to improve the customer journey. American Express serves its customers by emphasizing a customer-focused approach throughout the customer journey, such as onboarding, engagement, account applications, and cross-selling to provide consistent, exceptional service to meet customer needs and build strong, long-term customer relationships that increase brand loyalty and customer lifetime value. American Express offers new customers travel perks, discounts, bonuses, a simple, fast, customer-friendly account opening process, and a referral program known as “Share the Love” that awards the customer 15,000 bonus points for the referral.
Relationship marketing is an essential strategy that enables businesses to develop strong, long-term, mutually beneficial customer relationships that stimulate positive customer experiences and increases growth, sales, customer satisfaction, and brand loyalty. It is a cost-effective strategy that helps businesses achieve optimal results, success, and long-lasting customer relationships – rewarding and valuable.