What is Relationship Marketing and How to Use it to Connect With Your Customers

Source: Neil Patel

Are you connecting with your current customers?

Sure, you may use some marketing campaigns and promotions to focus on your existing customer base – but is that enough?

You need to learn the basic concepts of relationship marketing and implement that strategy within your business.

The idea behind relationship marketing is to create customer loyalty.

You want to develop engagement and long-term relationships with your current customers.

It’s a big picture marketing idea.

This method differs from your short-term goals, such as single sales or customer-acquisition cost.

Don’t get me wrong – individual sales and customer acquisition are both vital to growing and sustaining your business.

But you need to focus on customer retention with just as much energy and drive.

For retail companies, customer retention was identified as the highest driving factor for revenue according to a KPMG survey.

Customer acquisition was a close second.

There is a huge difference between these two driving revenue factors.

What is it? Cost.

What do I mean by this?

Well for starters, it’s easier to sell to your existing customers.

They are already walking through your doors and visiting your website.

It’s also much less expensive to sell to your current customer base.

Let’s look at the difference between retention cost and acquisition costs.

Your existing customers are already comfortable with your company and your products or services.

Sure, you need to spend the money initially to acquire them – but then it’s inexpensive to keep these customers coming back for more.

How do you keep them?

Use relationship marketing.

Ultimately, relationship marketing can help lower your customer acquisition cost.

If your existing customers love you, they will promote your business through word of mouth.

Basically, it turns into free advertising for you.

All of this insight stems back to relationship marketing.

I’ll show you how to effectively use relationship marketing to connect with your current customers.

Use personalization to your advantage

Being personable with your customers can go a long way toward building positive relationships with them.

It’s a key attribute for top relationship marketers because it stimulates an emotional response.

Let’s dissect some of the most important numbers from this graphic.

Essentially, buyers who do not see a personal value will not pay a higher price for a product or service.

On the flip side, consumers who see a personal value are much more willing to pay higher prices.

So what can you do with this information?

You can charge more money if your clientele consists of a long-term customer base who you’ve developed a personal relationship with.

Emotional connections also establish customers that are more engaged.

The connection increases the value of your customers.

According to a study by the Harvard Business Review, customers who are fully connected are 52% more valuable than highly satisfied customers.

That’s right.

You can have a customer who is considered “highly satisfied” and they are still not as valuable as the people you’ve developed a personal connection with.

Personal connections also give your company a competitive advantage.

Use some of my competitor analysis tools to give your business an edge.

The way you make your customers feel is important.

If they feel emotionally connected to your brand, they will shop at your business instead of the competition.

Relationship marketing can help you establish brand loyalty.

Based on these numbers, it’s clear that engagement leads to consumer loyalty.

Loyal customers have a greater chance of spending more money each visit and will shop more frequently than other customers.

Implementing a loyalty rewards program is a great relationship-marketing strategy that you can consider for your business.

It encourages your customers to do two important things that we just discussed.

1. Buy more frequently.
2. Spend more during each transaction.

If you don’t have a program that encourages this, don’t worry – it’s not too late to set it up.

You can use mobile applications to keep your customers engaged and coming back.

I’ll show you how to set one up.

Here’s a step-by-step guide to creating a loyalty rewards program.

Step #1: Choose a platform like Belly.

Once you get to their website, you need to fill in some information to sign up for their services.

It’s a quick process, and they use this info to create an account for you.

Once you create an account, you can start managing your loyalty rewards program.

Belly is just one of many options for this service.

Based on your specific needs and personal preferences you can also try:

Some of these are more industry specific.

For example, if you have an e-commerce business, you may lean towards Rezoop, while Upserve may be a better option if you’re in the restaurant industry.

Step #2: Choose your membership.

Based on the size and structure of your company, Belly gives you different membership options.

There are two different payment structures for small businesses.

For large enterprises, Belly offers customized options and pricing plans.

Just contact their sales department for details.

Step #3: Select your industry.

One of the reason’s Belly is a great choice is that they can tailor their services to the needs of businesses across different industries.

Select your industry to continue on their platform.

Step #4: Create a custom loyalty program.

Select which types of programs you want to use for your customers.

There are different options.

You can translate their dollars spent into loyalty rewards points that they can redeem toward future purchases.

Alternatively, you can set up a “punches” system where the customer earns rewards based on how often they visit your business.

You also have the option to set up discounts based on their purchase history or rewards based on specific items that they have purchased.

Step #5: Configure the specifics.

Once you select how you’re going to reward your loyal customers, you need to input the exact numbers that you want to use.

Let’s look at the example above.

We decided to reward our customers with a loyalty points system.

Customers will get one point for every dollar spent.

However, they only get points if their purchase amount is at least $10.

Customers who spend less than $10 each visit won’t get any points.

This encourages your customers to spend more money.

We’ve already established that your loyal customers are willing to spend…

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