Stats say there is only a 5-20% likelihood of making a sale with a new customer. On the other hand, an existing customer is more likely to purchase, with a 60-70% probability. The math is straightforward: improving relationships with existing clients is the key to more sales! So, how do you cultivate good relationships with your existing customers? The answer lies in relationship marketing.
What is Relationship Marketing?
For the uninitiated, relationship marketing is the marketing strategy that emphasizes the importance of the relationship between the customer and the business. It is personalized marketing with the sole purpose of building strong and better connections with clients. Relationship marketing strategies differ from business to business, but the most commonly used ones are:
- Loyalty programs
- Sending personalized corporate gifts
- Requesting customer feedback
- Acknowledging important occasions i.e., birthdays, anniversaries
- Rewarding loyal customers
- Providing impeccable customer service
All these strategies are time-tested tools for customer satisfaction, and therefore brand loyalty and more sales.
Top 10 benefits of Relationship Marketing Programs
If you note carefully, all the above-mentioned relationship management strategies cater to one principle point of marketing – personalized customer relationships. Making individual clients feels valued. And why not, after all, existing clients are 50% more inclined to try a new launch from your business than a new customer. So, here’re the top 10 reasons why you should nail relationship marketing in your company:
1. (Feedback) Increases Customer Loyalty
For businesses to be successful, they need to know how their customers feel about them and their products. However, assuming what your customers want is not the same as hearing it from them. Hence, the critical need for real-time feedback. For instance, over 77% of consumers prefer brands that actively request and accept customer feedback.
When you ask your customers for their feedback and implement helpful changes, you message that you care about them. This message transforms into brand loyalty. An astounding 75% of consumers are more likely to be loyal to a brand if they feel understood at a personal level.
2. Loyal Customers Buy More
Loyalty is about more than retention. Loyalty pays. For instance, a meager 5% retention rate hike leads to a significant 25% increase in company profits! Did you know, customers are more willing to spend their hard-earned money on brands they know and love instead of trying their luck at a new establishment. There is also the matter of upselling and cross-selling. Your customers are more open to trying new stuff from you since they already feel a sense of trust and connection.
3. (Loyalty Programs) Brings More Customers
Customer rewards programs or loyalty programs are a great way of fostering a sense of belonging with your customers. This feeling eventually leads to them becoming unofficial ambassadors of your brand and giving out voluntary referrals. Customers who belong to high-performing loyalty programs are more likely to recommend the brand to their friends.
4. Relationship Marketing Improves Customer Experience
The customer experience is just as necessary as the transaction, and relationship marketing caters to this factor. By prioritizing the customer’s needs and experience, a business makes it easy for them to repurchase.
5. Customer Feedback Leads to New Business Ideas
The next big thing in your business can come from a simple suggestion from your client; you never know! The users of your product are the best form of R&D, and implementing their ideas can leave you with the perfect new launch. Opening a forum for user suggestions and ideas they want to see in future versions, for instance, can provide you with a list of fresh ideas.
6. Reduces Overall Marketing Costs
Relationship marketing leads to your customers becoming vocal advocates of your brand. This dramatically helps with advertising the business and spreading the word of your services, which means the marketing budget can be significantly reduced. In addition, as unofficial representatives of your business, your customers will do the advertising for you.
7. Mistakes are More Likely to be Forgiven
In an age where simple faux pas is enough to bring down companies, customer loyalty can be the shield of protection you need. Loyal customers are more likely to forgive a brand after a misdemeanor, especially if they have previously proven trustworthy.
8. Makes Brands Stand Out
By prioritizing your customer, you give them something most of your competitors don’t: value. When presented with the option of picking between two similar businesses, a customer will always pick the one that makes them feel valued over one that doesn’t. That can be your edge over the competition.
9. Leads to Brand Resilience
Building up a following of loyal customers means ensuring that your business will stand the test of time. Even if a competing company comes up with a better product, your customers will stick with you. No business is eternal. And when a business eventually bows out, the only thing stopping a new company from taking its place is the company’s loyal customer base.
10. Surprising Existing Customers Improve Loyalty
Sending out surprise gifts and offers to clients under a relationship marketing strategy can work wonders. Customers receive promotional discounts and store offers all the time. To make such a mundane and routine task memorable, send your offerings when they least expect it. Everyone likes being surprised, and your customers are no exception.
By showing them you value their presence, you boost your retention rates and increase sales. Special birthday gifts, milestone gifts, rewards for being a loyal customer are all beautiful excuses to send something special down your customer’s way.
Personalized Automated Gifting with Eva
Personalized corporate gifting is the cherry on top, the epitome of what relationship marketing stresses: making your clients feel appreciated. So what better way can there be than sending them custom gifts? You can use Eva to find out what gift your customer will love the most.
Eva is an AI-powered gifting solution that removes the stress of picking out the perfect gift and makes it as simple as one, two, three. It also takes care of logistics, shipping, ROI, and free refunds.
No matter what type of business you own, creating genuine relationships with your customer base can mean everything to its success. Loyal customers as a demographic are five times more likely to purchase from your store again, four times more likely to give out referrals, and seven times more likely to try out new launches (Temkin Group). So invest in relationship marketing today to make sure you reap the rewards tomorrow.
Try out Eva for free and watch your business grow its loyal customer base with the power of appreciation.