Did you know that as little as a 5% increase in customer retention can increase profits by 25% to 95%?
Did you know that it can be six to seven times more expensive to acquire a new customer than it is to retain a current customer?
Oh, and get this, did you know that referrals among repeat customers are 107% greater than non-customers?
With these types of statistics, it’s no wonder that “relationship marketing” has become the new buzzword of marketing. You see, the goal of relationship marketing is to increase customer loyalty, thus reducing costs and improving profit margins.
O.K. Enough with the corporate speak. This month my posts are going to focus on the broad topic of relationship marketing and how entrepreneurs and small business owners can use this strategy to grow a thriving business.
Relationship marketing grew out of the direct response marketing campaigns of the 1970s and 1980s, according to Wikipedia. Its focus is on customer retention and satisfaction. Relationship marketers understand the long-term value of a happy client. And, with today’s barrage of options, people are expecting … and getting … more out of their relationship with the companies they do business with.
“Consumers want a relationship with an organization that will truly enrich their lives,” says Jonathan Tisch, chairman, and CEO of Loews Hotels. And if you market to businesses … your clients aren’t much different.
Business owners want a relationship with their vendors that will enrich their business lives … make their lives easier, more convenient, and more profitable. When you are able to give your clients satisfying experiences, you will build a relationship with them and they will come back.
Ernan Roman, president of Ernan Roman Direct Marketing, based in Douglas Manor, N.Y., says. “If you get the relationship dynamics and satisfaction right, the revenue will follow.”
A very good example is Apple Computers. O.K. I’ll admit I’m a Mac owner and wouldn’t think of owning anything else. And why is that? For me, it is the stability of the operating system coupled with the total coolness of design. Many Mac owners feel that they belong to an elite club of creative and savvy folks. Apple fosters this experience through their quality, design, and advertising.
One of the most common methods used online in relationship marketing is the e-zine. But there are others, including blogs, social networking, and continuity programs.