Purposes of Relationship Marketing
Purposes of Relationship Marketing
Enhancing Customer Loyalty
- The primary aim of relationship marketing is to stimulate customer loyalty.
- By building solid relationships with customers, businesses aim to shift their buying behaviour from ‘one-off purchases’ to ‘repeat custom’.
- Loyal customers are more likely to recommend the business to others, thereby stimulating additional sales through word-of-mouth referrals.
Establishing Long-Term Engagement
- Long-term engagement is encouraged through relationship marketing, fostering a sustainable and predictable income for businesses.
- It aims to forge emotional bonds with customers that transcend monetary transactions, such as friendship, trust, and shared values.
- This engagement ensures customers feel valued and important, promoting loyalty and satisfactory customer experience.
Improving Customer Retention
- Retention relates to the company’s ability to retain its customers over a period of time.
- Relationship marketing creates strategies to offer added value to existing customers, incentivising them to remain with the company.
- It also entails listening to and addressing customer feedback to improve their experience and the company’s offering.
Increasing Profitability
- Relationship marketing aims to increase sales profitability.
- By cultivating customer relationships, businesses can upsell other services or products, triggering more revenue from each customer’s transaction.
- Also, maintaining an existing customer is cheaper than acquiring a new one, which will boost the companies’ profit margins significantly.
Enhancing Company Reputation
- A good company reputation can be fostered through relationship marketing.
- Happy, loyal customers are more likely to leave positive reviews, thus improving the company’s reputation and attractiveness to potential new customers.
- It also includes addressing customer complaints promptly and adequately to show the company values their customers and aims to provide a high level of service.
Building Competitive Advantage
- Relationship marketing can provide a significant competitive advantage over other businesses in the same sector.
- By putting the customer first, businesses can differentiate themselves in an overcrowded market, thereby gaining a competitive edge.
- Similarly, understanding and fulfilling individual customer needs can position the company as the preferred choice over competitors.