When it comes to friends, you’d rather have one really good one you can count on to support you instead of 10 unreliable acquaintances. The reason is due to the high value of long-term relationships, and it’s a concept that’s important to brands and customers, too. One loyal, repeat customer who frequently buys from your brand and shares it with others is far more valuable than 10 one-time customers who jumped on a clearance sale. Creating these loyal customers is the driving force behind relationship marketing.
What is relationship marketing?
Relationship marketing is an advertising strategy designed to foster brand loyalty and repeat business through strong, ongoing customer relationships. Unlike other types of advertising that focus on increasing sales in the short term, relationship marketing strategies focus on long-term engagement and customer retention. A relationship marketing plan is important because an engaged customer base tends to make repeat purchases over time and refer the brand to others.
Benefits of relationship marketing
Here are a few benefits of a successful relationship marketing strategy:
Cost-effectiveness
By some measures, the cost of new customer acquisition can be five to 25 times higher than retaining an existing one. It’s far easier to retain an existing customer base that’s already loyal and has bought into the value proposition of your product. People who feel connected to your brand are more likely to buy more from your company over time, boosting customer lifetime value (CLV), or the amount of profit they generate throughout your relationship.
Insights
Maintaining close customer relationships isn’t only about sales. When brands engage in true connection and dialogue with their community—whether through direct conversation, social media engagement, reviews, customer surveys, or other customer feedback—they gain insights into their customers’ needs and preferences.
This deeper understanding is powerful because it can drive ideas for new products and more effective marketing strategies, and determine long-term business plans.
Brand advocates
Your customers are your best advocates. Building long-term, customer-centric relationships can engender loyalty and a feeling of community around your brand. Happy customers are likely to recommend your products to others, and these word-of-mouth referrals can generate growth and customer acquisition.
Upselling opportunities
Long-term customers are typically more receptive to upselling (such as a premium version of a product they like) and cross-selling strategies (such as a suite of complementary software programs). Leveraging data like purchase history and messaging tools like email marketing campaigns can be especially effective in identifying and maximizing these opportunities.
Relationship marketing tactics
- Loyalty programs
- Two-way social media conversations
- Referral programs
- Personalized communication
- Community building
- Content marketing
Businesses can implement strategic relationship marketing tactics, including:
Loyalty programs
Encourage customer loyalty by offering points, discounts, or exclusive benefits like early access to new products. Some companies also engage in “surprise and delight” initiatives, like sending extra items with purchases or mailing surprise gift cards.
Loyalty programs can help build strong relationships because they demonstrate your company’s appreciation for its customers. In turn, when customers appreciate these gestures, it can foster brand loyalty and encourage them to make repeat purchases.
Two-way social media conversations
True conversation involves a dialogue between parties, and that applies in a marketing context as well. Stay active with customer engagement on social media platforms by responding to messages, comments, and mentions of your brand. You’ll glean important information about the customer experience and customer opinions, while also making a positive impression as an engaged company that cares about its community.
Referral programs
Your current customers are your best brand ambassadors, and you can incentivize them to promote your business by offering them rewards for referrals. You can provide referral links for customers to share with friends, offering a benefit like “Give $20, get $20.” Or you can experiment with other referral program ideas like social media contests and exclusive access.
Personalized communication
Everyone likes to feel special, and you can facilitate that feeling by showing your customers that you understand and care about them. Simply including your customer’s name in email subject lines and chat replies can go a long way.
Consider also leveraging customer data—like information about sales transactions, purchase history, interests, and birthdays. For example, a post-purchase email marketing campaign might ask your customers how they liked a specific product, soliciting customer feedback and inviting them to reach out for assistance. Another idea: send warm birthday wishes with a 10% off coupon.
Community building
Create space for your customers to interact with your brand and each other. These community spaces may be virtual, such as social media platforms, online chats, webinars, or in-person events like pop-up shops, in-store workshops, and industry conferences.
Content marketing
When you’re keyed into your customers’ needs, you can launch a content marketing campaign that supports them in their journeys. Some of this content may relate to your brand, like valuable supporting documents about a particular product or tutorials showing how your service offering works. Some may be external, like newsletters with helpful links about events in your local community or news about your industry.
No matter the type or format of the content, the point is to provide value to your target audience—which will also increase brand awareness.
Examples of relationship marketing
- Blume’s Blumetopia rewards program
- The Outrage’s POV-centered approach
- eevee’s community-building unicycle lessons
Here are a few examples of how today’s brands facilitate relationship marketing and build lasting customer relationships:
Blume’s Blumetopia rewards program
Cosmetics company Blume uses a points system called Blume Bucks in its loyalty program, dubbed Blumetopia. Customers can earn Blume Bucks by following the brand on social media, purchasing and reviewing products, and celebrating a birthday.
As customers earn Blume Bucks, they gain access to different tiers of benefits, including special promotions, invitations to VIP social media groups, limited-edition merchandise, early access to new products, birthday gifts, and more. Blume also offers a “Give $10, get $10” referral program, where you give your friend a $10 discount on their first purchase. When their purchase goes through, you get a $10 coupon in return.
The Outrage’s POV-centered approach
The Outrage launched as an apparel company specifically designed to raise money for activism, and that strong point of view remains central in its content-forward ecommerce. The brand says it’s “a hub for activism … that’s leveraging the power of community and fashion to mobilize our growing network of activists.”
For example, its feminist gift guide details key issues about the intersectional feminist movement, educating the reader before listing the products to buy to support related causes. They also link out to additional educational and advocacy resources and provide concrete ways people can show support. The Outrage’s mission-focused purpose is front and center in its content.
eevee’s community-building unicycle lessons
Bradley Spence co-founded eevee’s, a personal electric vehicle (PEV) company, after becoming known as an expert in Vancouver’s PEV community. He was particularly known for electric unicycles thanks to hosting group rides and posting reviews of accessories.
Bradley knew some customers would be intimidated by eevee’s one-wheeled vehicle, so he invested in educating the community. Eevee’s hosts free electric unicycle lessons every weekend, inviting people to reserve a spot with up to three additional friends. The shop is designed to facilitate these lessons, with dedicated space for customers to learn and test the unicycles. These lessons are many customers’ first taste of an electric unicycle, and whether they come with friends or meet new ones, eevee’s aims to continue building the Vancouver PEV community.
Relationship marketing FAQ
What is the main goal of relationship marketing?
Customer relationship marketing is a strategy designed to encourage customer loyalty, customer interactions, and overall long-term engagement. The relationship marketing approach emphasizes customer retention rather than short-term individual sales.
What is the challenge of relationship marketing?
As with any long-term relationship, it takes intentionality to maintain an emotional connection with customers over time. Customers’ needs and behaviors evolve, so businesses must adapt their customer relationship management approach to stay relevant.
How do you create a relationship marketing strategy?
Analyze customer data to understand their preferences, and determine your metrics of success. This information can help you develop a strong relationship marketing strategy that makes sense for your business with methods that may include customer-centric messaging, loyalty programs, personalized communication, email marketing campaigns, and an engaged social media presence.
