What is relationship marketing?
Definition: Relationship marketing is a marketing strategy that focuses on the growth of a long-term relationship between the business and its customer.
Every business has one of two styles of relationship marketing: Short term customer relationships, and long term customer relationships. Short term customer relationships are a consistent batch of new customers. Long-term customers are loyal returning customers over a long period of time. But, what are the practical differences between the two?
Short-term customer relationships: Why are they popular?
In an article from Forbes, Samuel Thimothy writes, “When you have a short-term focus on marketing, it often means that you’re only working to acquire new customers.”
In recent years, businesses have increasingly focused on building short-term relationships with their customers. In a fast paced world, the growing need for immediacy is evident. Everything from grocery store delivery to on-demand entertainment is pushing for faster, and more succinct customer experiences. Because of this, short-term customer relationships are often favored by businesses.
Fast food chains are a good example of a short-term customer relationship. In the fast food industry, businesses are catering to volumes of customers at one time. Chain restaurants don’t necessarily care about sitting down with customers, hearing their stories, or making personal connections. Instead, they are relying on having a revolving door of new consumers. On the other hand, family-owned restaurants thrive and even rely on long-term relationships with their customers. The difference is this: return and repeat business.
Short-term customer relationships are popular because they require less effort, attention, and businesses get to the end result faster. Long-term customer relationships are less popular because they demand a slow, consistent commitment and the end result is prolonged. Even though long-term customer relationships are less popular, they have a greater ROI in the end.
Long-term customer relationships: What does that look like practically?
So, we’ve answered what both short and long-term relationships are. And, we’ve also explained why short term customer relationships tend to be more popular in the business world. Now, we want to dive deeper into what long-term customer relationships look like practically in everyday business.
First, let’s expand on why you should look for long-term customer relationships. First off, loyalty is a major piece in any long-term customer relationship. If you take a look at any company that has been around for more than 100 years, you’ll notice that they’ve likely played the long-game with their customers. One example of this is Champion, the clothing brand founded in 1919. A decade ago, Champion was a Walmart brand. Now–Champion clothes average $50 per item. Because of Champions loyalty to their customer base and their pride in their product, they’ve become a household name.
Long-term customer relationships are focused on building relational equity. That means several things. First, you have to be invested in the customer, not the result you want from them. You must be willing to tell the truth, even when it threatens to tarnish your brand. Communication is the key to keeping any relationship strong, especially a long-term customer relationship.
Here are practical ways to build long-term relationships with your customers:
- Tell the truth in little and big situations
- Communicate about what’s going on in your company
- Show relatability
- Ask for and accept feedback
- Show the customer that you care about them individually
- Reward loyal customers
What are the benefits of long-term customer relationships?
Well, there are many! First off, you’ll likely save money as long-term customers are a low cost to keep and prove a high return in the end. On average, loyal customers will spend 67% more than new customers. Because long-term customers are loyal to you, they’ll do your marketing for you through word of mouth! With their repeat business, you’ll focus less on obtaining new customers and instead on retaining the ones you have. Because of this, long-term customers are less reliant on paid advertising. Here’s a list of other benefits of long-term customers:
- More profitable than short-term customers
- Long-term customers make your business look more trustworthy
- Your word of mouth referrals will increase
- Loyal customers are more forgiving because they know your core DNA
- More room to expand and experiment with your brand
Creative Connection Specializes in Relationship Marketing
For over 20 years, Creative Connection has built our creative firm on relationship marketing. From healthcare clients to home services, we’ve taken great care to develop meaningful relationships with our clients, and their customers. As a B2B and B2C marketing company, we work to continually build a long-term relationship with our clients and create a legacy instead of completing a service. If you would like to learn more about how we could help your home service, contact us today!