Relationship marketing

Introduction

One of the most expensive and difficult tasks facing any business is acquiring new customers. Earning a potential customer's attention, making a convincing pitch, and then facilitating the accompanying sale can leads to huge expenses when every step is considered. According to business authors Emmett C. Murphy and Mark A. Murphy, acquiring a new customer can cost five times as much as retaining an existing customer.

This presents a serious dilemma for many companies. With finite resources, is it better to attract new customers or try to hold onto the ones they already have? According to those same authors, a 2% increase in customer retention can decrease costs by as much as 10%. No company can survive and grow if they are not constantly adding to their customer base.

Relationship marketing

Relationship marketing is about forming long-term relationships with customers. Rather than trying to encourage a one-time sale, relationship marketing tries to foster customer loyalty by providing exemplary products and services. This is different than most normal advertising practices that focus on a single transaction; watch ad A and buy product B. Relationship marketing, by contrast, is usually not linked to a single product or offer. It involves a company refining the way they do business in order to maximize the value of that relationship for the customer.

Relationship marketing mainly involves the improvement of internal operations. Many customers leave a company not because they didn't like the product, but because they were frustrated with the customer service. If a business streamlines its internal operations to satisfy all service needs of their customers, customers will be happier even in the face of product problems.

Technology also plays an important role in relationship marketing. The Internet has made it easier for companies to track, store, analyze and then utilize vast amounts of information about customers. Customers are offered personalized ads, special deals, and expedited service as a token of appreciation for their loyalty.

Social media sites allow business to engage their customers in an informal and ongoing way. In the past, it would have been impossible to keep useful records about every single client, but technology makes it easy for companies to automate their marketing efforts.

Branding is the final component of relationship marketing. A company can form a long-term relationship with a client if that client feels like the brand they purchase reflects who they are or who they want to be. Customers are less inclined to switch to a different brand if they think that switch makes a statement about their identity.

Why we need to build relationship with clients?

People work with individuals who they like. So of course our objective as a business is to improve the life of a customer. The idea here is to tell how important relationship building is and how you can adopt it in your day-to-day life.

Relationships are not built overnight, it takes time to nurture. Strong, enduring client relationships are the lifeblood of the most organization. Understanding what your customers like, dislike or care helps serving the business. As a solution provider, we also need to think from customers’ perspective in order to better understand “what they need?”