There are plenty of studies that highlight the importance of customer retention -- oftentimes, customer retention has been found to be even more critical to your company's success than customer acquisition.
For instance, research conducted by Frederick Reichheld of Bain & Company found as little as a five percent increase in customer retention can result in an increase in company revenue by 25-95%.
Alternatively, American Express discovered retained customers buy more often and spend more than newer customers -- they've seen your worth and they're invested loyally in your brand, so it makes sense they're willing to turn to your business for their needs, again and again.
Need further convincing? Consider this -- in 2016, I began using JetBlue for my flights to and from college in North Carolina. Why? Because I could earn points for every dollar spent on a flight (points which never expired), and I appreciated the airline's customer-first mentality. Plus, I liked the free snacks.
Once I graduated college, I took it a step further, paying $99 for a JetBlue Plus credit card, which allowed me to earn more points on every dollar I spent using the credit card. I could use these points for future flights, but alternatively, I could also use them on car rentals, hotel stays, or purchases with JetBlue retail partners, like Amazon.
Then, a few months ago, I convinced my friend to get a JetBlue credit card, so she could reap the same benefits.
I'm not trying to convince you to fly JetBlue, but I am trying to show you the power of relationship marketing. By offering unparalleled rewards for long-term customers, and demonstrating a true desire to cultivate a deeper relationship with their audience, JetBlue doesn't need to spend much time or effort on acquiring new customers -- its existing customers are doing the heavy-lifting for them.
What is relationship marketing?
Relationship marketing is a type of marketing that focuses on cultivating deeper, more meaningful relationships with customers to ensure long-term satisfaction and brand loyalty. Relationship marketing is not focused on short-term wins or sales transactions -- rather, it is focused on delighting an audience and your customers for the long-haul.
Here, let's take a look at some relationship marketing examples, and then explore how you can implement a strong relationship marketing strategy, today.
Relationship Marketing Examples
- Domino's
- Marriott
- GE
- ArmorSuit
- Panera
1. Domino's
In the past couple years, Domino's has taken its fair share of risks for the sake of innovation and improvement -- including a series of ads called Pizza turnaround, in which they showcased a series of negative customer reviews, read by real Domino's employees, before promising a new and improved recipe.
These self-deprecating ads appeal genuinely to viewers, but clearly go against any traditional sales playbook ... which is why they work. By admitting their mistake, Domino's re-invented its brand as transparent and honest -- and who wouldn't want to buy from a company like that?
Additionally, Domino's has conducted other genius marketing campaigns like the Domino's wedding registry, in which soon-to-be-married couples can create their own pizza registry. Domino's has also done a fantastic job tapping into their digital audience -- at one point, the company even allowed people to order pizza using a simple pizza emoji. Now, half of Domino's sales are through digital channels.
Ultimately, there are plenty of risky steps Domino's has taken to cultivate a loyal, long-term customer base. They accepted short-term losses for long-term gains by slowly and strategically re-inventing their product and their brand, and then engaging with their audience on their customer's favorite digital platforms.
2. Marriott
Undoubtedly, a 35-minute film is not the most traditional avenue a hotel can take when it wants to increase sales -- and yet, that's exactly what Marriott chose to do with their film, "Two Bellmen Three".
This film, along with other influencer content like "Snapisodes", which mimic TV travel documentaries, enables Marriott to appeal to a younger demographic and build brand awareness on youth-dominant platforms like Snapchat. Best of all, their content rarely resembles an advertisement, and is typically focused on providing an audience with fun or helpful information on various travel destinations.
3. GE
Relationship marketing is ultimately about offering both new and existing customers valuable content -- regardless of where they are in your buyer's journey. Good relationship marketing should appeal to the random viewer as powerfully as it appeals to your long-term customers, to ensure your customers can grow with you for the long-haul.
GE does a great job of diversifying its content, and the platforms on which it promotes, to ensure it satisfies as many people as possible. For instance, GE created two sponsored podcasts, which have collectively resulted in nearly 8 million downloads. Additionally, the company has a popular YouTube channel, and a blog that ranges in topics from Arnold Spielberg to 3D printing.
By consistently offering a diverse range of quality content, GE shows its desire to satisfy its long-term customers even at the expense of short-term wins.
4. ArmorSuit
ArmorSuit's warranty policy begins like this -- "Most warranties are limited to 30 days or one year, but with our Lifetime Replacement Warranty, our customers can request for a replacement screen protector for a lifetime. This way, you never need to purchase a whole new kit when a replacement is needed."
This way, you never need to purchase a whole new kit -- a phrase you'll likely never hear in traditional sales transactions. ArmorSuit's lifetime warranty represents the company's steadfast commitment to keeping its customers satisfied. While it might seem ridiculous to offer a lifetime warranty, it makes sense for building strong relationships with ArmorSuit's customers -- when the company's customers then need other products related to tech, they'll most likely check out ArmorSuit's website first.
5. Panera
In 2014, Panera issued a statement promising its customers it would remove all artificial flavors, sweeteners, and preservatives from all Panera products by the end of 2016. The company remained transparent throughout the process, publishing progress reports to demonstrate a level of accountability and transparency to its customers.
Undoubtedly, it was a risky decision to admit they'd previously used unhealthy ingredients in their food -- but it paid off big-time in 2016, when the brand could officially say "100% of our food is 100% clean".
Now, they continue to focus on cultivating strong relationships with their customers through personalization. For instance, they alert loyalty members about new food offerings they feel will meet the member's "flavor profile".
They also meet their customers where they are -- 26% of Panera's orders are generated digitally, and they offer home and business delivery, rapid pickup, and catering. Their commitment to health and convenience has resulted in 28 million Panera loyalty members, and 13 million email newsletter subscribers.
Next, lets explore how you can create a strong relationship marketing strategy for your own business.
Relationship Marketing Strategy
- Provide personalized, customer-focused service.
- Engage with the customer where they are.
- Offer incentive and rewards for customer loyalty.
- Create valuable content that tells a compelling story.
- Collect feedback regularly.
1. Provide personalized, customer-focused service.
When you're creating a relationship marketing strategy, and when you're engaging with your customers, your primary concern should never be focused on your product or service. Instead, your concerns should always revolve around the customer -- Would the customer want to see this ad? Would the customer be excited about this Instagram post? Does our new product delight the customer?
Additionally, it's critical you create channels for direct support when your customers need help. Perhaps you implement a Facebook Messaging Bot for service-related concerns. Alternatively, maybe you answer your customer's questions via Instagram DM. By meeting your customers where they want to be met, you're proving your willingness to help them despite the hassles it might entail for your overall business process.
2. Engage with the customer where they are.
The reason Marriott's strategy works isn't just because of the content they create -- it's also because of where they post that content. Creating videos specifically for Snapchat enables Marriott to appeal to a younger demographic on a platform already popular with that audience.
Similarly, it's critical you do your research to learn which platforms are most popular for your ideal demographic. By reaching out to them through those channels, you're demonstrating a level of helpfulness and understanding that will encourage those users to interact with your brand.
3. Offer incentive and rewards for customer loyalty.
To cultivate a long-term relationship with your customers, and to create lasting brand loyalty, it's critical you continue to engage with customers even after they've purchased a product. Consider what you can offer them once they've become customers -- perhaps they can get a discount on additional products, or receive personalized recommendations based on their preferences.
Consider Panera -- by creating a loyalty rewards program, Panera continues to incentivize its customers to purchase additional products, and slowly forms a more meaningful relationship by gathering information about each customer and then using that information to offer unique suggestions depending on their individual food preferences.
4. Create valuable content that tells a compelling story.
If a customer has already purchased your product, they don't need to see additional product advertisements to become brand loyalists -- instead, they need to feel your business offers valuable content regardless of their purchase intent.
Marriott's film isn't meant to immediately convert a viewer into a paying customer. Instead, its purpose is to increase brand awareness, so that down the road, when that viewer is ready to book a hotel for an upcoming trip, they'll remember the compelling film they saw once and think of Marriott.
5. Collect feedback regularly.
A relationship works two-ways -- to truly develop a meaningful connection with your customers, then, it's vital you ask them for feedback. What do they want to see from your brand? What do they like about your product? What do they wish you wrote about on your blog? This information is critical to ensure you're consistently improving your relationship marketing strategy to best-fit the needs of your specific audience.
from Marketing https://blog.hubspot.com/marketing/relationship-marketing
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