The countless benefits of relationship marketing are not immediately visible, but research suggests that a positive customer experience will lead to more sales, either directly or indirectly.
Most businesses focus on transactions as a measure of success. In a transactional model, your business is dependent on a continuous flow of leads coming in. Marketing generates leads and hands them off to sales. Sales converts them to customers, and if the need arises, hands them off to support.
The sales team is relying on math to meet its sales goals. In order to achieve X sales goal, they must generate Y number of leads. In each stage of the process, they account for Z amount of drop off.
But are you accounting for the experience that’s being given to each of those leads? Are you creating a process by which each individual buyer is treated with the same, exceptional level of service and support?
The number of transactions alone doesn’t mean you’re delivering an exceptional customer experience. And if your customers aren’t happy, they won’t come back to do business with you again.
Thinking Beyond Features and Benefits
In today’s ultra-competitive landscape, businesses are not able to compete on price or features alone. There will always be a competitor pitching something faster, better, and cheaper to your existing customer base.
How are you going to retain them?
Relationships are the glue that keeps your customer coming back to you. When price, features and benefits are all equal between competitors, the buyer is faced with an emotional decision.
They will choose you over your competition based on how they feel about you.
Yes, we are talking about feelings, here. But the way your customers feel about you directly affects your bottom line.
Building a relationship with people from the beginning of their buying journey is more work up front, but those people will be more likely to refer you when they become a customer.
- The upfront investment for one customer may result in 2 or 3 new customers later on.
- 65% of new business comes from referrals (New York Times)
- People are 4 times more likely to buy when referred by a friend (Nielsen)
- The Lifetime value of a new referral customer is 16% higher (Wharton School of Business)
A positive customer experience leads to a positive relationship with your customers. A positive relationship leads to referrals.
Rethink Your Buyer Relationships
Relationship marketing is designed around developing strong connections with customers by directly providing them with information that is tailored to their needs, wants and interests. Rather than selling them with a hard pitch, relationship marketing focuses on providing value to the buyer at every stage of their journey.
How do you accomplish this?
- Research: The first step in understanding your customer is researching what makes the tick. This isn’t about demographics alone. You must also consider psychographics. You want to learn what they care about, what keeps them up at night, and what they are struggling with in their own business.
- Educate: By providing your buyer with relevant and valuable content in every stage of their decision-making process, you nurture the relationship and form a bond of trust.
- Serve: After the customer hands over their money, how are you supporting their decision? Think about offering them training on your product. Keep them in the loop about any updates and changes as time goes on.
- Reward: To promote referrals and keep them coming back, build a loyalty program. Incentivize referrals by offering discounts or rewards. You spent a lot of time building these relationships, and this is a great way to nurture them while helping your bottom line.
To truly make this work, it takes collaboration between all of your departments. The entire sales team must begin to think beyond the traditional, transactional models of doing business. Every department has to put in the work it takes to engage both your prospects and your customers in a meaningful way.
It takes a solid strategy. There’s more upfront investment. But, a well-managed relationship marketing plan can and will reap big rewards for your business over time.