Why is Relationship Marketing Important? - Purpose & Use

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Do you have relationships that are important in your life? Add relationships between brand and customer to that list. In this lesson, we'll examine the importance of relationship marketing for businesses.

The Friendly Skies

On one side, you have the new customer. Acquiring them is a lengthy and expensive proposition and they're likely to bail at any moment. On the other side, you have the faithful customer who's been with you through thick and thin and keeps coming back to order and interact.

While new customers are always a plus, studies show that they're actually not the best focal point for your marketing efforts. Rather, it's those long-time customers that experts agree make more sense to court.

Take a look at American Airlines, for example. Of course, they get new customers every day, but they work extra hard to nurture the relationships between their company and their repeat customers by implementing a loyalty program packed with features and engaging in two-way conversations on social media (among other tactics).

What American Airlines understands - and works toward - is a facet of marketing known as relationship marketing and, yes, it's exactly what it sounds like.

What is Relationship Marketing?

Relationship marketing is about building lifelong relationships between a brand and its customers. You don't say you have a relationship with someone you meet one time in a grocery store, right? Your relationships are those people you've spent time with, built friendships with and enjoyed the company of over the years.

The concept of relationship marketing focuses on building loyalty to a brand, instead of simply encouraging a single sale, never to hear from the person again. For relationship marketing to work, a brand has to take the focus away from selling a single plane ticket, for example, and engage in business behaviors (such as a loyalty program with rewards) that encourage repeat, and prolonged, interaction with the brand.

So, the big question is: Why is a relationship between a brand and its consumers so important? Aren't you just buying a plane ticket? What difference does it really make? Believe it or not, relationship marketing is hugely important and can have big implications for your business. Read on.

Why Is It Important?

First and foremost, relationship marketing is important because it helps you not only get new customers, but keep them once you have them. Why? Because you're building a better experience for them as they engage with your business.

Here are some other benefits of a successful relationship marketing strategy:

Enhanced Customer Experience

Most people leave their current brand because of poor customer service. Relationship marketing, whether through providing superior customer service or simply listening and responding to feedback on social media, leaves a good taste in customers' mouths.

Better Feedback

Plenty of brands are getting the hint, thanks to social media: feedback (thoughts or reactions to a product or service) can make or break a business. Today, you can engage with a brand on social media and, if they care about relationship marketing, they'll reply. This gives customers an opportunity to be heard, and provides valuable feedback for brands in areas that might need to be tweaked.

More Sales

Whether it's keeping a customer happy, or gaining referrals (new customers directed to your brand from an existing customer), good relationship building ultimately will result in more revenue for your company. Customers who are happy with your business will reward you with their hard-earned money and will tell their family and friends about you.

Innovative Opportunities

Starbucks is a great example of relationship marketing that benefits their innovations. Through a portion of their website called ''My Starbucks Idea,'' customers can submit their own ideas for new drinks and other business opportunities. In this community, members can vote on the best ideas and share their own thoughts. This not only strengthens the relationship that Starbucks has with its patrons, but allows them to listen in and develop consumers' ideas (a bonus point in the relationship marketing concept).

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