With most products and services competing in largely parity landscapes, the relationship a brand, product or service has with its customers is often its only competitive differentiation. Said another way, businesses with strong customer relationships usually lead their categories. That’s because the economics of relationship marketing are compelling; there are five sources of revenue from loyal customers, so the positive impact of customer loyalty compounds and puts you ahead of your competition.
So, if a relationship marketing strategy is key, the question becomes, “How do I do it?”
The Internet is the ideal channel for a brand to practice relationship marketing principles,
- It is the place consumers go to find the information they need to make decisions about their lives.
- It is rapidly fulfilling, some say it has fulfilled, the human need for community that was once satisfied by moving to the suburbs and gathering around the TV to watch a favorite show.
- It is an active environment where people have the expectation that they can interact with and, to a large degree control their experience.
For these reasons and more (Hub and Spoke: A Marketing Strategy for the Rest of Us), the internet gives companies of all sizes the opportunity to create relationships with their customers.
The following are 5 areas you should consider to develop a relationship marketing strategy for your online marketing. They are based on my experience building relationship marketing programs in Europe and the US. Keep each in mind as you consider your own internet marketing challenges.
- Focus on Best Customers. There are typically a small percentage of your customers who contribute the majority of your brand or product’s volume. There are also a small percentage of consumers who contribute the majority of the category’s volume. Understand who the heavy users are and what they need. It’s not what the majority need.
- It’s a commercial relationship. It is easy and often useful to associate the principles of inter personal relationships to relationship marketing. Planners make their living from this. There is a key flaw in this thinking. There is a significant difference between interpersonal relationships, the relationships you have with friends and families, and commercial relationships. Success can be found in understanding the differences.
- Build the relationship. Relationships of any kind don’t just happen. You have to work at them. Relationship equity needs to be created. This is achieved when value is created beyond the transaction and the functional benefits of your product or service. This is the heart of branding and it is often underestimated. There are a lot of products with names out there masquerading as brands.
- Relationships are dynamic. A relationship goes through stages. This is true in terms of both the stage and the degree of intensity. This is obvious from your experience with inter personal relationships. Commercial relationships go through similar stages and each requires different emphasis on contact frequency and content. I use the following labels to describe the stages: Consideration, Prospecting, Connection and Loyalty. Keep in mind that the purchase happens in the middle not the end. Connection is the most important stage in terms of ROI and probably the least exploited.
- Maintain the relationship. Once the relationship has been established maintaining it becomes vital. It isn’t hard but does require active involvement. One of the five relationship marketing principles is “Good customers expect to be rewarded.” Note, it’s “rewarded,” not bribed. This doesn’t preclude additional sales messages. In fact it supports the need for targeted, relevant sales messages. Remember, it’s a commercial relationship. When value is continually created, either through additional information and/or services or through exclusive access, or highly relevant sales offers you can maintain a profitable relationship for a long time.