Introduction to Relationship Marketing Strategies
To succeed in the market, there should be a good product, good relationship marketing strategies, and setting up distribution channels. For some companies sales process is completed with the sale and guarantee terms. After that, any customer query, complaint, or suggestion may not get the desired response from the management, following which the customers could share it by word of mouth with others. Subsequently, the company needs to score higher on the perception of customer service or after-sales service. Finally, this will show sales and income and reflect the bottom line.
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According to leading business authors Emmett C Murphy and Mark A Murphy, acquiring a new customer can cost five times more than retaining an existing consumer. Therefore, developing and sustaining a good relationship with customers/consumers is vital for any business. It pays to adopt relationship marketing as the core of customer relationship management (CRM) strategy.
What is Relationship Marketing?
Relationship Marketing refers to efforts by a company to build long-term relationships with customers to engage them for a longer duration. Moreover, a company may have different products, and customers judge the merits of a company based on the experience they get through the first purchase. If the satisfaction level is high, the same company may have the possibility of repeat purchases of other products offered to the customer. On the other hand, if satisfaction levels are low, the customer may look for competitive offerings, and thus the company loses valuable business.
There are compelling reasons to adopt relationship marketing for any business wanting to grow its market share and better brand recall among consumers. Increased competition, globalization of trade, recessionary trends in the market, the emergence of new technologies for customer relationship management (CRM), and recent trends in social media all create an ideal atmosphere for companies to embrace relationship marketing in a big way.
As already stated, new customer acquisition is costly, while retaining existing customers can decrease marketing costs by as much as 10%, analysts said.
Now with open economies, competition could come from anywhere in the world. It applies to electronics, consumer goods, farm products, cosmetics, computers and accessories, electrical equipment, etc. Therefore, companies need to constantly engage with the consumer, get feedback, and make corrective strategies.
For the past seven years, recessionary trends created by the subprime crisis and US financial crisis in 2008 have spread across the globe. So is Eurozone reeling under a crisis that makes relationship marketing companies vulnerable to sales fluctuations as consumers cut back on spending. To stay afloat in business, companies need to invest in technology, connect with consumers on a sustained basis, and keep them satisfied.
Companies thrive on multi-product and multi-service offerings. Hence existing customers are a captive market for them to grow and become market leaders. Establishing brand loyalty, therefore, becomes paramount for large businesses.
Strategies for relationship marketing
The following are the different strategies for relationship marketing:
1. Invest in technology: ERP & CRM solutions
With the emergence of the digital or electronic era, cumbersome paperwork has been minimized. The practice of storing data and information in simple Excel sheets is also long gone. Now the trend is investing in customer relationship management (CRM) solutions. The ideal strategy would be to install enterprise resource management (ERP) software and associated CRM solutions.
ERP is about technology and business processes- integrating different functions of a company into a single system accessible to critical decision-makers. Customer Relationship Management (CRM) is about recording and storing details about the customer, his purchases, personal information, and other details. ERP and CRM are two sides of the same coin, and both aim to streamline operations and enable more profits for the firm. ERP benefits organizations by reducing overhead costs, making business processes more efficient, and reducing capital spent. CRM increases profits with more significant sales and a central customer data repository accessible to the relationship marketing and sales team.
Microsoft, SAP, Oracle, IBM, and Peoplesoft are all leading players in ERP and CRM implementations in small, medium, and large companies. These days ERP packages are available even for small and medium businesses, so they need to utilize this to keep ahead of the competition.
Popular CRM systems such as Salesforce and Microsoft Dynamics provide a standardized method for collecting and sharing customer data and cataloging customer interactions. CRM enables executives to create sales projections, sales officers to keep in touch with clients, shipping clerks to verify addresses, and the billing department to create invoices. The objective of CRM is to help the company store customer data, which in turn can be beneficial for increasing sales and retention of customers and enabling better relationships with them efficiently.
Investing in technology solutions such as ERP and CRM may entail one-time installation costs and recurring licensing and upgradation costs, which provide a good return on investment (ROI). But cost-sensitive companies can opt for cloud-based solutions where a service provider manages the entire application, software, servers, and storage in a secure environment in a virtual space that the company’s employees can access by logging through desktop internet or mobile devices. However, from a security point of view, it’s better to keep the database on the local servers.
Analysts said that the most streamlined businesses could only do with sales, so the implementation of CRM needs to have priority over ERP solutions.
2. Building Customer Relationship through loyalty points
Several companies now reward customers for showing loyalty to the company by issuing bonus rewards points, and cash-back offers to customers on new purchases. One can use loyalty program cards at any of the company’s retail outlets for repeat purchasing. The reward points can be redeemed or offset against future purchasing. Their purchasing activity is much easier with a robust ERP CRM package at the back end, customer data storage, and retrieval.
Mobile phone brands have promoted such reward activity for loyalty towards the company, watch brands, electronics consumer durable companies, bookstores, oil marketing companies, and other leading industry verticals.
3. Email marketing
Customer data retention helps companies send emailers from time to time regarding new product launches, exclusive offers, clarifications regarding some service issues, product failures, exchange offers, and so on. Regarding the use of titles in emailers and content, companies should aim to increase the number of customers who open and read their messages. Email software programs like Mailchimp enable companies to send information to many people without being spammed. If the customer requires it, there should also be a provision for unsubscribing from future email newsletters.
4. Website, online chats, toll free numbers
Now most companies have an online presence through websites and listing in directories. Websites have to be informative and interactive and must have user-friendly navigation features. The websites should provide an online chatting facility and display toll-free numbers that enable customers to call anytime to resolve any complaints.
Websites should be mobile-friendly, enabling vertical scrolling so that more people can access content on mobile devices.
They can also provide images, videos, and essential features of products and services. It can also enable customers to book complaints online or use web forms to communicate with the company. Ensure proper attending of Toll-free numbers promptly, and a back-end call center manned by people with good communication skills can enhance customer satisfaction. The queries could range from information regarding the nearest service center, warranty issues, recurring problems with a device, and so on.
5. SMS Marketing
Short messaging relationship marketing campaigns (SMS) can communicate new offers, which are time-bound, new product launches, new showroom openings, and any other schemes beneficial for the consumer. SMS campaigns work best on holidays, early mornings, and evenings as users have more free time to read the messages. Most often, SMS marketing intends to engage and retain consumers regularly. It can also communicate Discount offers and bonus reward point offers.
6. Include social media for relationship marketing
Social media has emerged as a viable digital platform for communicating with existing consumers and generating new leads. Using Facebook, Twitter, LinkedIn, Pinterest, Google Plus, and other media works wonders for promoting the company and its brands.
Carefully post only a little content on FaceBook or Twitter. It is better to have FB accounts for the corporate level and brands. The corporate FB page would cater to important events, appointments, and postings relevant to the industry. In contrast, FB pages of the company brand should focus only on the products and features, have contests, or solicit the opinion of users. The more likes and shares generated, the more social media pages will be popular.
The FB page may receive comments, queries, and suggestions, which one must attend regularly. Photos and words used must be original and concise. FB can also promote Videos published on YouTube. Companies should devote some funds to paid promotion of postings that reach newer audiences and create awareness of the company’s products.
FB users are motivated to like a page or post for various reasons- to show support, to get a free offer, for entertainment, to get product updates, to interact with the company,
7. Sending Greetings on festivals and New Year
It will be a good idea to send greetings to consumers through email and social media pages concerning important festivals, New Year. This will convey the message that the company cares for its consumers. Offers related to that period can also be given to them.
8. Consumer campaigns & Referrals
Many large companies hold consumer campaigns to contact consumers directly. An electronic appliance company may carry free service campaigns and encourage its customers to bring defective products and perform their diagnosis free of cost and spare parts charged at subsidized prices.
Credit card companies, magazine publishers, banks, finance companies, and online marketing firms use referral campaigns to get more business. Those who refer friends, relatives, and others to generate more business for the company are rewarded in cash, gifts, or reward points that one can redeem on a future purchase.
Some globally famous examples of relationship marketing: When Swedish firm Ikea changed its font in the catalog, consumers objected, and the company retraced its steps; Direct Recruitment sends handwritten birthday cards to customers, thus making them feel wanted, American Airlines and other leading players give frequent flyer rewards to passengers that may be in the form of free flights, discounts, and upgrades, Dell provides a particular online shop for corporate buyers who buy in large volumes while pharma company Vyvanse created an extensive online portal featuring videos, forums, expert articles and mobile apps to help those who have ADHD.
Conclusion
The capability of relationship marketing to gain new business and sustain existing customers has been proved beyond doubt to work across industries and more so in Business-to-Consumer (B2C) markets. The best relationship marketing strategies will only succeed if there are adequately trained employees on corporate ethics and best customer interaction practices. For this, regular training sessions for employees will be beneficial.
There should be clear policies on how customers interact with customers on email, phone, chat, and social media. Their performance should be monitored and benchmarked against best practices in the industry. All feedback received by the company should be collected, analyzed, and incorporated into companies best practices. Regular polls and surveys will also help the marketing team to know the market’s pulse. There should be efforts to leverage warm leads- customers who have already desired to buy the company’s product or service.
All employees should be involved in customer satisfaction exercises, specifically marketing, sales, customer relationship managers, call center executives, and public relations personnel.
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