Benefits of Relationship Marketing (and Its Disadvantages)
What are the benefits of relationship marketing? It's not like traditional marketing where your terms end after a particular sales goal is over;. For most marketers this term is probably familiar. From it's commencement, a relationship marketing emphasis meant brands were recognizing. The perfect list of 5 benefits of relationship marketing – I especially benefit . shorter-term goals like customer acquisition and individual sales.
Corporate Culture Impacts Relationship Marketing This trust is difficult to achieve and even harder to sustain. Brands must recognize there are cultural implications to a successful relationship marketing strategy. There must be alignment across all touchpoints in order to facilitate a consistent positive customer experience. Without a culture based on collaboration and cooperation, departmental silos will create barriers to the seamless bi-directional flow of information required to maximize the consumer experience across all channels.
Customer Relationship Marketing maximizes value and drives profitability With proper collaboration, those interfacing with customers are empowered to use the resources of the organization to solve problems, answer questions and provide positive buying experiences for consumers.
In addition, satisfied customers will stay longer so profitability will be enhanced over time. Retaining customers improves marketing efficiency by reducing churn. Building a Relationship Marketing Strategy A relationship marketing strategy begins with insights gleaned from data.
Insights reveal opportunities and challenges. Goals and objectives are developed as a first step in creating a marketing strategy that will address a specific opportunity or challenge.
Appropriate audience criteria is used to select certain consumers, then messaging, offers and other elements are assembled to achieve the established goals and objectives. This is particularly important when the consumer is experiencing challenges with the product or service.
Quickly resolving issues builds trust and it can improve customer satisfaction. By paying careful attention to positive and negative trends, organizations can use this feedback to make appropriate adjustments to product or service offerings, ensuring customer satisfaction.
The Many Benefits of Relationship Marketing You Were Unaware Of
Customer Profitability — Relevant communications and offers motivate consumers to use the full complement of product and service offerings. It also helps you get valuable feedback from your customers and understand their needs and expectations.
This subsequently helps in value addition to products and services based on these demands and leads to happier customers as they get involved into the value creation process. Delivery and Meeting Expectations If you know what your customers need, it will help reduce wastage due to trial and error methods.
When required product features and specifications are known, it is easier to make modifications that will please your customers and increase sales turnover. It also helps reduce costs incurred from the research and development process.
Repeat Business Would you be interested in getting involved in any business transaction with a seller who appears rude or indifferent to your needs? People who buy from you wouldn't feel any special need to resist switching sellers if you do not give them an incentive to stay bound to you. Here, relationship marketing steps in and provides a positive reinforcement for them to make a repeat purchase.
Prevents Negative Transition Trust and loyalty go hand in hand and it is super beneficial for your business. It will help prevent customers from turning to your competitors. It also helps to reduce your company's customer attrition statistics. Word-of-Mouth Marketing A happy customer will always promote your business by telling ten other people about the amazing services or performance received from your company.
They will be excited to recommend your business to other people around them so they can try it too. Increasing Customer Base It is no secret that a happy customer will bring you new ones.
Apart from customer referrals, there are several other ways to increase customer satisfaction by employing methods of utilizing social networking websites, blogs, informal surveys, benefits on loyalty cards, timely response to complaints and requests as a constant reminder of your presence around customers through consistent communication. Your company's value equity and retention equity is improved by enhancing customer satisfaction.
This type of marketing benefits, especially, in the creation of new customers apart from maintaining existing ones. Reduced Marketing Costs Benefits also include lesser marketing costs and more value creation.
This can be explained by stating the following statistics: Minimization of Customer Price Sensitivity A happy customer will be willing to pay more for your product if there is a guaranteed satisfaction of products and after sales services attached to the price. Hence, you will gain repeat business from your existing customers in the long term even if there is a rise in prices at which you sell your products and services.
However, quotation for a premium price must come with benefits of value addition. Customer loyalty and satisfaction are proven major contributors to profit maximization.
What is relationship marketing and what are its benefits?
Identification With the Company The benefits are reaped both by the company and the customers. It helps your customers identify more with your company. Staying in touch with your customers makes them feel like they are important to the company. Now, who doesn't enjoy that? It will keep your customers coming in and build brand equity for your company in the long run. Also, familiarity with your company and the fact that you understand your customer's need better due to the time period of your association as compared to that with a new company, play as de-motivators for your customers to make a switch.
Product Market Expansion This one is tricky and most companies fail to recognize this benefit. Are your employees ready to deliver beyond the company's boundaries on customer demand? As pointed out earlier, customers play an important role in value generation process.
They are the ultimate consumers of your products and services, thus, they can help you identify potential profitable fields for expansion and diversification.
A company that is willing to venture outside its set boundaries, can constantly grow with the support of its customers through this marketing. Today The benefits are most likely to be observed in companies engaged in providing services, manufacturing industrial goods or high-end products like credit card companies, retail banking providers, automobile manufacturing companies, airlines, insurance, health care and pharmaceutical companies.
These companies require higher employee involvement with customers and more customer participation in production. Customers have greater assurance of the organization's fulfillment of its commitments by delivering promised product or service performance.