4 Benefits of Relationship Marketing and 7 Ways to Measure Success

Relationship marketing builds the foundation for long-term business growth. Instead of prioritizing your marketing efforts toward attracting new guests, your business works to forge strong relationships with existing customers, repeatedly meeting their needs and proving your company is the best choice for them. 

Even still, a great relationship marketing strategy requires you to know your audience, track industry trends, and create personalized experiences. This article will outline the advantages and practical applications of relationship marketing and offer key tips for success when developing your strategy.  

What is Relationship Marketing? 

Relationship marketing is a strategy used by companies to build long-lasting and profitable customer connections. It takes your relationship with customers beyond monetary transactions. You focus on creating memorable and personalized customer experiences, so they feel a greater emotional connection and commitment to your brand.  

Traditional transactional marketing strategies focus solely on encouraging customers to make purchases and spend more. Little emphasis is placed on striking an emotional chord.

Yet, an estimated 65% of a company’s business comes from loyal repeat customers. With such a large percentage of revenue coming from repeat customers, devising strategies to keep them satisfied and engaged is crucial.  

Increasing Customer Loyalty Through Relationship Marketing 

Customers are loyal to companies that consistently provide high-quality experiences, products, and services. Crafting marketing strategies that focus on building strong relationships with customers will boost loyalty and increase the chances of that customer becoming a brand advocate. Let’s look at Starbucks as an example.  

Today, Starbucks is a world-renowned coffeehouse and roastery reserve chain, offering customers coffee beans, branded retail products, and a variety of beverages. Much of its journey to its current popularity can be attributed to relationship marketing tactics.  

Starbucks’ loyalty program lets customers earn points with each purchase. Customers can redeem their points for free drinks or snacks. Additionally, Starbucks aims to connect with guests during birthday celebrations by offering a free drink.   

Key Takeaway: Through strategic email marketing, timely discounts and deals, and sharing customer-created content on social media, Starbucks has built a loyal customer base. 

4 Advantages of Relationship Marketing 

Never lose sight of the power of personalization. Personalized communication is a marketing strategy that focuses on providing groups of customers with the service, offerings, and communication that will most resonate with them. Here are four benefits of relationship marketing with a personalized touch: 

1. Boosted Customer Satisfaction: Customized marketing ensures that guests feel like you respect and appreciate their continued patronage. 
2. Increased Per-Customer Spend: A satisfied customer is more likely to return, increasing their average lifetime value. 
3. Greater Customer Engagement: Customers who feel seen, heard, and understood by your brand are more likely to engage.  
4. Enhanced Brand Awareness: When customers enjoy their experience, they may talk about your brand with others, increasing brand awareness.   

Additionally, these are three ways you can leverage customer data to market to your individual customers:

1. Customer Segmentation: Divide your guests into groups based on purchasing habits and engagement data to effectively cater messaging to them. 
2. Retargeting Ad Campaigns: Send a gentle reminder if a customer engaged with your brand but didn’t purchase. 
3. Local SEO Marketing: Local SEO involves optimizing your digital presence to ensure your company appears in relevant online searches. 

Customers seek a brand that aligns with their values and desires. Each interaction is high-quality. Personalized marketing is a key part of building strong relationships with your guests. 

5 Marketing Strategies for Greater Guest Retention

Because relationship marketing focuses on long-term customer engagements, most companies experience a boost in customer retention. Use these five relationship marketing strategies to increase guest retention: 

1. Create Personalized Experiences: Cater as many interactions as possible to the individual customer. 
2. Develop a Loyalty Program: Provide relevant, accessible, profitable rewards for guests when they return to your business.  Learn how to measure customer loyalty before launching your program so you know how to evaluate your success as you go.
3. Provide Excellent Customer Service: Ensure that each guest’s visit is a high-quality experience they’ll remember. 
4. Offer Frequent Discounts or Special Deals: Surprise your loyal guests with periodic discounts or deals that keep them excited about your business. 
5. Express Your Appreciation: Thank customers for their continued support through special offers, exclusive deals, or upgrades. 

As a general rule of thumb, seek out customer feedback regularly. Learn directly from your loyal guests how you perform in the above-mentioned areas. The information collected from customer surveys helps you continue to meet their needs.

Building Brand Advocacy 

Brand advocacy occurs when your current customers recommend your brand to others. According to a 2022 Statista survey, 35% of Gen Z consumers will advocate for a brand they love. Relationship marketing builds the foundation for your current customers to evolve into brand advocates.  

Your brand advocates are the most effective form of word-of-mouth marketing. Most customers trust the recommendations of friends and family over a company attesting to its benefits.

This form of social sharing allows you to expand your brand reach. Even if a customer doesn’t make a purchase or sign up for your loyalty program immediately, they know of your great reputation when they need your company’s product or services. 

5 Ways to Boost Customer Lifetime Value 

Customer lifetime value (CLV) is the total financial value an individual brings to your business throughout their entire engagement. The higher a guest’s CLV, the greater an asset they are for your business. Here are five ways that effective relationship marketing increases CLV: 

1. Reliable Customer Loyalty: A loyal customer spends more money at your restaurant over time, resulting in increased customer lifetime value. 
2. Greater Per-Order Spend: Customers who love your brand are more inclined to make larger purchases. 
3. Increased Chance of Brand Advocacy: Satisfied customers often discuss their favorite brands with others. 
4. Boosted Customer Retention: The better your brand retains customers, the more they spend over their lifetime. 
5. Opportunities to Upsell or Cross-Sell: When guests trust your business, they may be more open to upsell or cross-sell promotions.  

Key Takeaway: Satisfied customers are more likely to become repeat customers, generating revenue for your company over the long term. 

5 Tech Integration Tips for Your Marketing Efforts

A successful relationship marketing strategy leans on robust technology. Everything from customer relationship management (CRM) systems to marketing automation platforms, streamline your effort to strengthen customer connections. Use these five tips when leveraging technology: 

1. Implement CRM Software: Gain a bird’s-eye view of your customers and their habits when interacting with your brand to create personalized interactions.  
2. Set Up Reliable Analytics Tools. The software automatically aggregates and analyzes customer data, allowing you to make smart marketing decisions.  
3. Leverage Social Media to Boost Awareness: Use your social media presence to reach a wider audience, increasing brand awareness and engagement. 
4. Adopt Email Marketing Tools: Emails grant you a one-on-one touch point with your customers. Email marketing software makes personalization simple.  
5. Implement Loyalty Program Software: Create, promote, manage, and analyze reward program initiatives all within one user-friendly tool.  

Finally, marketing automation technology is an asset no matter the size of your business. It makes sure customers receive the correct follow-up email after taking a specific action or allows you to create an email series campaign that runs smoothly without huge manual lift from your team.  

Pro Tip: Your tech stack is crucial for a successful relationship marketing campaign. Check out our guide on how to simplify your tech stack to promote guest engagement.  

6 Evergreen Best Practices for Each Campaign

Building strong relationships with customers requires time, consistency, and patience. Here are six best practices that you can implement now to work toward establishing long-lasting customer relationships: 

1. Create a Loyalty Program: A reward program that offers exclusive benefits to enrolled customers helps them feel prioritized and excited about your brand,  
2. Improve Customer Service: Put yourself in your customers’ shoes. Create a positive and memorable experience with each interaction.  
3. Offer Personalized Experiences: Consider your guests’ actions, priorities, and interests, and then cater to them.  
4. Remain Consistent: In relationship marketing, focus on providing value repeatedly so guests can rely on you.  
5. Be Authentic to Your Brand: Guests feel an emotional connection to your brand, so make sure all customer interactions feel authentic.  
6. Seek and Implement Customer Feedback: Gain insight directly from those you serve by asking for customer feedback through surveys or social media.  

Key Takeaway: It’s essential to make the most of every interaction with a customer. Don’t pass up an opportunity to prove why you’re the better option over competitors. 

7 Tips for Measuring Campaign Success

Implementation of your customer relationship marketing efforts is the first half of your campaign. You must also track key performance metrics to understand its success. These insights tell you which strategies work best for your customers and which might need improvement. The seven metrics you’ll want to track are: 

1. Website Traffic: Monitor how your website traffic changes over time and where that traffic comes from.  
2. Net Promoter Score (NPS): Measure the likelihood of a customer recommending your brand to another.  
3. Social Media Engagement: Rates of customer engagement online on various social media channels and types of content. 
4. Click-Through-Rate (CTR): How often guests click CTAs on emails, social media, or websites to take the next step in their engagement with your company.  
5. Email Open Rate: The frequency with which customers open emails from your business. 
6. Customer Loyalty Program Participation: Track the number of guests who register and cancel their loyalty program enrollment. 
7. Return on Investment (ROI): Calculate ROI by subtracting your initial investment in a campaign from the initiative’s total earnings. The final number is your revenue earned.  

Finally, remember that an impactful relationship marketing campaign is more than numbers. You’re striving to connect with customers on a personal basis. Metrics are helpful, but they don’t deprioritize creating genuine connection and understanding. 

Frequently Asked Questions About Relationship Marketing Benefits 

Want to learn more? Keep reading for our answers to the most asked questions about relationship marketing.  

What is the key benefit of relationship marketing? 

The key benefit of relationship marketing is an increase in revenue over time through loyal and repeat customers. However, there are many others. 

How effective is relationship marketing? 

A well-planned relationship marketing strategy effectively connects with customers, transforming them into long-term guests or brand advocates. It’s worth noting that there are many other key results one can expect, like increased traffic and publicity. 

What is an example of relationship marketing? 

One example of relationship marketing is a hotel chain loyalty program wherein guests earn points during each stay. Customers can use their points to pay for nights at the hotel. 

Expanding Into Relationship Marketing 

Relationship marketing takes your connection with customers beyond a simple transaction. It’s focused on your business’s long-term growth and revenue. You aim to align your brand and offerings with customer’s expectations. The better you meet their needs, the greater your competitive edge. 

If you’re ready to launch in relationship marketing, schedule a demo with Paytronix. You’ll discover our marketing tools, including CRM and marketing automation, which in the end will support your growth.