What is relationship marketing?
Relationship marketing refers to the marketing approach that has a main focus on the creation of an ongoing and long-term relationship with the customers. Relationship marketing was initially defined as a form of marketing developed from direct response marketing campaigns that emphasize customer retention and fulfillment rather than focusing on sales transactions.
Relationship marketing differs from traditional marketing in the way that the former heavily relies on customer retention and satisfaction. This further results in long term relationship and recurring sales, whereas, the major emphasis of the latter is on customer procurement and one time sales without giving any importance to building strong relationships.
Thus, the main goal of relationship marketing is to create strong, sensitive links with the consumers to the brand, so that it can lead to an enduring business, free word-of-mouth promotion and information from the customers that can produce leads.
Brief Note on Relationship Marketing
Relationship marketing is all about framing long-term relationships with the consumers rather than aiming at one-time sale, relationship marketing shots to nurture customer loyalty by providing standard products and services. This is somewhat different from the normal advertising practices that have the main focus on a single transaction.
Relationship marketing mainly involves the improvement of internal operations. There are customers who drop the choice of a company. This is not because they didn’t like the product, but, because they were frustrated and tired with the customer service. If a business organization rationalizes its internal operations for the contentment of the needs of the customers, the customers tend to be happier even in the face of product problems.
In relationship marketing, even technology plays an important role. With the involvement of the internet, it has become easier for companies to keep a track, store, analyze and then utilize vast amounts of information about customers.
Another component of relationship marketing is branding. A company can form long term relationship with the customers if the customers feel that the brand they are purchasing reflects who they are.
Who employs Relationship Marketing
There are many companies that have something to gain from the development of long term relationships with customers. The small businesses often serve a stable stream of regulars and make little effort to drive in new customers.
Have a look at the following pros and cons of relationship marketing.
What are the Pros of Relationship Marketing?
- Sales multiply with the least investment
The customers that enjoy a strong relationship with the brand tend to purchase the upcoming products because of the earlier values experienced in the past purchases. This means that there is only a need of the marketing effort to make the current customer base become acquainted with a new product or service that is offered.
- Returning customers often purchase more than first time customers
With customer retention, you are able to develop an atmosphere where a higher per-purchase average can occur. This will be helpful for the brand and business to create more proceeds out of their existing customer base.
- Positive experiences help to create vital positive one-on-one marketing
People leave reviews about brands and businesses when an experience goes beyond their expectations. This is the reason for so many negative reviews: a customer expects to receive a positive experience.
- It creates personal connections
Although the marketing efforts may connect a customer with the brand, at the end the result is that the customers make personal connections with the employees also. If a customer interacts with that person, they are also interacting with that brand, which further increases the chances of a future purchase.
- It creates opportunities to solve problems immediately
There is no brand and business that is 100% perfect. There are chances for the products or businesses to fail sometimes, due to some or the other reason. With the existence of efforts of relationship marketing, the organization gets an out to be able to keep that customer. This is because the contacts of the customers are at the forefront of this marketing effort.
What are the Cons of Relationship Marketing?
- New consumers are treated as secondary entity
- Negative information may ruin relationship marketing campaign
- It takes time for relationship marketing to be effective
- It requires change in the culture