Relationship Marketing is a business strategy designed to promote customer loyalty, interaction, and long-term engagement. Relationship Marketing is cross-functional marketing that is organized around processes that involve every aspect of the organization. The customer relationship approach focuses on customer retention to leverage a business advantage on competitors.
here are many benefits once a company has established an ongoing relationship with customers. Since regular customers are familiar with products and consistent in order placement, they are less expensive to service. Long-term customers are likely to purchase additional supporting products. Satisfied customers with an ongoing relationship with a business tend to bring additions customers to the company. Customer loyalty makes it difficult for competitors to enter a market or gain market share. Relationship Marketing enables people, processes, and technology to work together to decrease costs and increase profits. Relationship Marketing uses retention and satisfaction to develop long-term relationships between customers and businesses.
Relationship Marketing utilizes retention strategies to encourage customers to continue their relationship with a company and reduce the likelihood of customers switching to a competitor. One strategy that can be employed is cross selling, where related products are promoted to current customers. Developing a loyalty program, where customers receive incentives for frequent purchases, has increased sales for many companies. Another effective tactic is product bundling, where multiple products or services are combined into a single package and offered at a single price. Cross promotions, when customers are given discounts or other promotional incentives to purchaser related products, have also proved to be valuable.
Another key approach to Relationship Marketing is increasing customer satisfaction levels for businesses.
Mutually beneficial communication exchanges are utilized to inform businesses of their customers’ needs, as well as to inform customers of the full-extent of what the company can offer them. Customer satisfaction levels have a significant impact on the amount of sales relative to that of competing companies. Any company that wishes to foster long-term relationships where both the buyer and seller have a more satisfying exchange can benefit from Relationship Marketing.
Relationship Marketing is designed to develop strong connections with customers by providing them with information directly matched to their needs and interests, and by encouraging open communication. This approach often results in repeat business, increased word of mouth activity, and higher customer satisfaction.