A Practical Guide to Relationship Marketing
There is only one valid definition of business: to create customers. It is the customer who determines what the business is. Because its purpose is to create customers, any business has two basic functions:
- marketing (customer orientation)
This far-sighted quotation came from Peter Drucker (1973) and it was originally said in 1954. Relationship marketing is critically important for every business. After a client is won, they have to be kept and what keeps them is the relationship between the company and the clients.
Businesses must maintain their clients because clients keep the business running. Getting customers is one thing, but keeping them is a whole different story.
Customer loyalty can ensure a strong long-term relationship with your business. But customers do not just become loyal, their loyalty is tied to the relationship between them and the business and this is a fuction of how they are managed. Having the right tools to manage customers can help you deliver what they need and rightly guide you in the right direction to winning their loyalty.
This post details a practical guide to effective relationship marketing that kkeeps your customers, build a longterm relationship and bring success to the business.
- Know Your Customers
- Build a Customer Service Team
- Create Q&A Templates
- Implement the A.C.A.F. Customer Feedback Loop
- Build an Automated Customer Support Process
- Work Towards a Better Customer Experience
- Setup Specific Customer Retention Actions
- Reward Loyal Customers
- Set up a Referral Program
- Follow Up With Sales Number and Customer Feedback Metrics
- Invest in CRM and Other Technology
- Create Valuable Content Based on Customers’ Questions
1. Know Your Customers
You can only be able to build a relationship only after you know the person. So, before you start building a relationship marketing strategy, you need to know your audience to connect with them. Here is a guideline which can help you figure out your niche.
- Identify your interests, what you’re good at and what you sell. It is important to know your skills very well, as well as your products or services.
- Identify what problem you can solve, whether there’s a market for your niche and if your services can help the user.
- Research your competition and see what they’re doing, what they are promoting and what their asset is.
- Test your niche.
Your clients are an important asset to your business; they make your business work. Your business will exist as long as you have clients. More benefits come from your loyal customers because they continue to bring monetary value to the company. You need to maintain your customers engagement to keep them loyal.
According to a report by Gallup’s customer database, half of all customers are satisfied and only 38% of them say they are engaged.
Customer engagement doesn’t automatically follow satisfaction.
Focus on your customers and pay attention to them to keep their engagement rate high. A study by Experience Matters, say loyal customers are 5times as likely to repurchase, 5times as likely to forgive, 4times as likely to refer, and 7times as likely to try a new offering, That puts a premium on loyal customers and underscores the need for adequate investment to build loyal customers. Loyal customers are the livewire of any marketing organisation. Loyal customers are more likely to create customer lifetime value (CLV).
2. Build Customer Service Team
Success is a product of team work. It starts with building a team to execute quality experience. Every member of your team must be committed to building customer loyalty and helping your customers understand the value of your services. Your team need to help customers learn your services by making it easier to access and use. For online service providers, user experience is extremely important and can determine the success rate for your business because Google ranks your website based on how users relate with it and how much it satisfy their needs.
The last sentence above will tell you that UX is very important for SEO as well. Many experts have actually suggested that that UX will be very crucial in the future of SEO, especially with all the evolution of machine learning technology. And UX goes beyond SEO, your team must see what the user wants, what they need, how your services benefit them and achieve their goal.
Helping customers understand and value your product over your competitors’ is not a sales tactic.
Your customers' first contact with your business is likely to with a team member, particularly a customer support staff. Building a great customer service team should be a riority and your investment into building the capacity of your support staff can equally be worthwhile as it will be prominent in your relationship marketing strategy.. Your business needs to promote a customer-centric policy to your team and try to engage them in providing high customer support services. Your team should know how to deal with both negative and positive situations and offer help satisfactorily.
3. Create Q&A Templates
To be able to address both negative and positive situations you’ll need a Q&A template that can be modified depending on the user’s needs. A template can offer great help to customer support personnel in handling the many different questions posed especially by new customers.
There might be cases when the conversations can be nuanced and get a little tricky. Having a plan can be very helpful in such cases as you can get some ideas that will guide you in handling the customer, keep you out of trouble and achieve a winning conversation at the same time.
HelpScout has created helpful customer service questions and answer template picturing all sorts of situations.
For small businesses, it is easier to talk with customers and you don’t require an elaborated Q&A template. In case you have a business that is more complex, it would be awesome if you had some documentation. It could benefit both your team and your customers for future reference.
There are lots of situations when you don’t need to play by the book, and let the master team do the job.
4. Implement the A.C.A.F. Customer Feedback Loop
ACAF simply is short for Ask, Categorize, Act, and Follow-up, the ACAF Customer Feedback Loop is a business strategy that centers itself on the customer. It has 4 steps:
- Ask for customer feedback to see what they need and if their needs are satisfied by your product.
- Categorize the feedback. It can be positive or negative, but usually there are 3 main categories: feedback regarding the product, customer service and marketing & sales. You need to see the reasons behind the words.
- Act on the feedback: share the feedback with the people in charge.
- Follow-up with customers who shared feedback.
Feedback is very important control measure in every business. It helps you evolve and correct the mistakes you made in the past. Ask for valuable and personal customer feedback from your customers to see what you’re doing right and what’s wrong.
Always thank the customer for the feedback and make them feel appreciated. Not to mention feedback creates innovative opportunities, by hearing what your users need and you could develop in your product.
5. Build a Customer Support Process
Having an effective customer support plan in place can help you grow your business through relationships. This does not always require advanced technologies. In any case, you need to set up a process that allows smooth conversations between your team and your clients. You must figure out and design an appropriate mode to engage with the users as well as how to do the follow-up and win client loyalty. After that, think about how to constantly keep in touch with them using tools like newsletters or sending them special offers via a mailing list.
If your industry compels you to design a complex customer support process, you’ll need the following:
- the right team, that knows their responsibilities;
- a solid plan for dealing with issues;
- relevant metrics that need tracking and performance analysis;
- the right tools for dealing with customer queries and issues.
Having an automated customer support process can ease your work a lot. Practically, it can be a service such a help center or chatbot or any artificial intelligence system.
6. Work Towards a Better Customer Experience
Happy customers that had a good experience will return, unhappy clients that had unsatisfactory experience won’t return and can spread the bad word about the company. Studies show that almost 13% of unhappy clients tell to over 20 people about their bad experience. According to marketing guru, Philip Kotler, dissatisfied customers tell at least 5 persons of their bad experiences.
Dealing with customers will therefore require skills and should be takken very seriously. Knowing what to say to your customers can be a daunting task. However, you can always improve your customer experience by providing excellent customer service, quickly offering answers, solutions and trying to maintain a strong relationship with your customers.
It doesn’t really matter if your product or services are impeccable if user experience is not impressive. You will improve on this by trying to resolve issues when they appear and provide a clean experience on site without any problems and errors.
In this regard, the social media had been very helpful in building relationships with customers. Social media engagements will strengthen the customer relationship and they can promote your business afterward.
7. Set up Specific Customer Retention Actions
Customer retention shows the companies’ ability to keep their customers for a period of time. A high retention rate means people (users, customers) that continue to bring revenue to the company and buy products.
Studies show that acquiring a new customer, however, is anywhere from 5 to 25 times more expensive than retaining existing ones. That simply underscores the critical importance of customer retention. Retaining customers is a very important aspect of every relationship marketing strategy. Getting a customer is not an easy process as it takes visiyors to your site some mental processes to take the decision which eventually turns them into customers. Every single person thinks about the benefits they have when choosing a brand, a product or certain services. And the brand must think about how to keep those customers.
There are lots of customer retention strategies you can personalize for your clients to keep and bring ROI, but some of the most profitable are:
- personalized messages;
- social media interaction;
- persuade them through newsletters;
- keep the highest standard for customer support services;
- appreciate your clients;
- collect feedback;
- build loyalty programs.
These actions can be developed into campaigns and create something really interesting depending on your niche and business. These may come in addition to the strategies we’ve elaborated in the whole article to lead you into setting up a more specific customer retention plan.
8. Reward Loyal Customers
Rewards are a good way to appreciate customers and keep in the longrun. Rewards for brand loyalty is is a good strategy for relationship marketing. Customer loyalty rewards works very well and can strengthen the relationship you have with your clients. Basically, a loyalty program shows you care about your customers first. Loyal customers are hard to acquire, but once you got them, it costs the business about 5-25times less to sell to an existing client than to acquire a new customer.
So, maintaining a loyal customer can be much cheaper than winning a new one. Businesses must work out a functional reward system that impresses customers and mae them happy, turning them into an integral part of your business and making them like one of your team members who see your success as theirs.
Every business should aspire to customer loyalty. It is a virtue of their existence. There are lots of ideas you could generate by building a loyalty program. You can send the message by email, using an App (if your business has something like that), to the user’s account and so on. It can be a discount, a gift, or something else depending on your creativity. You can also find lots of ways to reward loyal customers in the digital marketing space.
Uber, for example, rewarded Gold members with some interesting perks, not available for all members. The membership levels are Blue (0 points to qualify), Gold (500 points to qualify), Platinum (2500 points to qualify), and Diamond (7500 points to qualify). So, all the member that hit 500 points and join Uber Gold get flexible cancellations that refund your $5 cancellation fee if you rebook within 15 minutes. In addition, members get priority support.
The Platinum and Diamond get a lot more services that make the ride more pleasant, such as:
- price protection on a route between two of your favorite places regardless of traffic or surge;
- priority pickups at airports;
- premium support with a dedicated phone line and fast 24/7 responses;
- complimentary upgrade surprises in high-end cars;
- no delivery fee for orders and many more.
Loyalty programs can boost your ROI and keep the customers that really matter.
9. Set up a Referral Program
Like we mentioned earlier, getting a new customer is not an easy task.One of the best ways to win new customers is to take advantage of current customers who are will to romote your business through a referral program. A referral program is in itself can be turned into a reward system where clients are rewarded for referring a customer who eventually makes a purchase. Creating a referral program is born from customer satisfaction. People that are pleased with the services might tell other people about their experience, so why not take advantage of that? Encourage them and don’t leave room for second thoughts. Satisfied customers are willing to make referrals. Those who receive such referrals are more likely to pay attention to them rather than to the brand.
If you got the referrals engaged, then you’ll get some of the best new customers you can get.
If you want, we can set aside our reasons why you should use a referral program, and listen to the studies. R&G Technologies discovered that referral leads convert 30% better than leads generated from other marketing channels. More than that, referred customers have a 16% higher lifetime value.
There are lots of businesses that use the referral program. Booking, for example, gives you $15 if you recommend it to a friend. You have to invite your friends by sending them the referral link. They book and stay at the accommodation, then after their stay, you and your friend both get the $15 for the next booking.
Your customers can become true advocates, by connecting and sharing your product with others when they have a good experience. Rewarding a satisfied customer through a referral marketing program doesn’t require so much work, and it can bring lots of benefits for everybody involved.
10. Follow Up With Sales Number and Customer Feedback Metrics
Don't miss customer data and numbers. In order to keep track of your business’s success, you’ll have to follow sales numbers and customer feedback metrics.
Some of the most important metrics in this situation is customer lifetime value (CLV). The formula for the metric is:
Estimated Average Lifetime Value = (Average Sale) x (Estimated Number of times customers purchased)
There are free tools that calculate the metric. Google Analytics, for example, measures lifetime value for users acquired through different channels. You need to select two Google Analytics metrics and compare them to identify the date range during which you acquired users. These are the metrics available:
- goal completions per user
- pageviews per user
- revenue per user
- session duration per user
- sessions per user
- transactions per user
You can compare LTV in relation to the cost of customer acquisition (CAC) to measure how long it takes to regain the investment to get a new customer.
Conversion rate is another important metric that should be tracked. Conversions could be under lots of forms, depending on what business goals you’ve set. It can be:
- a newsletter subscription;
- signing up for an event;
- downloading white paper or guideline or something available on the website;
- sign-up for a live meeting/webinar;
- purchasing a product;
- creating an account on the website;
- calling the company and so on.
The are lots of other metrics you could follow, that can be tracked automatically with lots of services available that regards to the:
- experience with the brand;
- experience with the customer support team;
- experience with the product/services.
11. Invest in CRM and Other Technology
Businesses are more likely to become successful if they build a long-term relationship with their customers. Having a customer relationship management (CRM) strategy in place will bring lots of benefits in the future. You can say goodbye to tangled messages, no customer history in one place, hard customer management, no customer support flow, bad organization and many more. And you can create long-term customers more easily.
There are lots of customer relationship management tools that come in handy when you want to have an efficient and easy management with your customers. You can see customer’s history, lots of data and conversion numbers. Below you can see an example from such a CRM tool.
These tools can save you a lot of time to organize and customize your process. You are able to track and organize every stage of your sales pipeline, manage a large number of contacts, customize the steps as you wish.
For managing contacts and conversations you can use apps and services that include customer support technology. Intercom is an example. The messaging platform makes it very easy to:
- converse with clients;
- see lots of information about the contacts;
- look at the latest conversations;
- create auto messages;
- setup labels and filtering options for conversations;
- get reports;
- use chatbots and many more.
The tool is great for engaging and retaining customers.
12. Create Valuable Content Based on Customers’ Questions
Customer feedback, questions and conversations can be a great starting point for a new documented article. Generating article ideas based on your customers’ question will lead to a high open rate because you’ll talk about something that lots of people search. Imagine if all your articles answered your readers’ questions: the CTR would be very high.
There might times when marketers don’t write for the customers but rather for the industry, and they might lose a big part of the audience. If you write for your actual clients you could manage to acquire new customers.
Customers’ questions create content marketing gold.
When your current customers ask you questions it’s like finding our their needs very easily. You can see if there’s been a confusion, feedback, improvement, something they want to learn or any other thing. More than that, you can use that piece of content in the future as a reference in case there are other customers that ask you similar questions.
Maintaining a strong customer relationship isn’t the job of a single department. Everybody should work in order to fulfill customers’ needs. Sales teams are not entirely responsible. It should be a synergy.
Relationship marketing is a strategy that will foster customer loyalty and ensure long term engagement. You need to master this in order to bring customer retention and satisfaction.