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How Relationship Marketing Inspires Customer Loyalty and Retention

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<p><span style="font-weight: 400;">Brand loyalty doesn’t happen overnight. Your existing customers will only stay if you consistently give them a reason to do so. </span></p>
<p><span style="font-weight: 400;">The internet has made it easier than ever for consumers to pick from the best brands online. If you don’t focus on what your current customers want or need from you, you can lose them for good.</span></p>
<p><span style="font-weight: 400;">Luckily, building long-term customer relationships is not as daunting as it seems. This guide will help you increase customer loyalty through relationship marketing and raise your bottom line.</span></p>
<h2>What is relationship marketing?</h2>
<p><span style="font-weight: 400;">Relationship marketing is designed to build meaningful customer relationships. Its goal is to not only cultivate greater engagement but also to encourage shoppers to form emotional connections with your brand. When done right, the result is more consistent sales and a greater customer lifetime value.</span></p>
<p><span style="font-weight: 400;">This marketing method is unique because it fully focuses on supporting your current buyers rather than seeking new customers. It also recognizes the ongoing importance of the customer experience for every shopper, as buyers can go through the</span><a href="https://www.markinblog.com/sales-funnel/"><span style="font-weight: 400;"> sales funnel</span></a><span style="font-weight: 400;"> multiple times. Relationship marketing techniques drive returning buyers to fully trust your business—and in some cases, never consider your competitors again.</span></p>
<h2>Why relationship marketing matters</h2>
<p><span style="font-weight: 400;">Most business owners will tell you that finding new buyers can be hard—and expensive. Customer acquisition can cost </span><a href="https://www.bizjournals.com/triad/news/2019/09/12/grow-your-business-with-these-client-acquisition.html"><span style="font-weight: 400;">up to 25 times more</span></a><span style="font-weight: 400;"> than </span><a href="https://www.podium.com/guides/customer-retention/"><span style="font-weight: 400;">customer retention</span></a><span style="font-weight: 400;">. Through relationship marketing, you can strengthen your base of repeat buyers and cut back on acquisition costs.</span></p>
<p><span style="font-weight: 400;">Loyal customers can help you do more than save money and time. They’re also valuable assets who help you profit more in the long run. When your relationship marketing efforts improve your retention rates by just 25%, you can boost your company’s profits </span><a href="https://www.forbes.com/sites/jiawertz/2018/09/12/dont-spend-5-times-more-attracting-new-customers-nurture-the-existing-ones/"><span style="font-weight: 400;">by 25% to 95%</span></a><span style="font-weight: 400;">.</span></p>
<p><span style="font-weight: 400;">Despite the power that long-term customers hold, your competitors are </span><a href="https://www.uschamber.com/co/grow/customers/customer-retention-guide"><span style="font-weight: 400;">twice as likely</span></a><span style="font-weight: 400;"> to set their eyes on acquisition instead of focusing on keeping their existing customers. Relationship marketing is your opportunity to not only win over your target audience but also keep them as long-term and loyal buyers.</span></p>
<h2>5 steps to build your relationship marketing strategy</h2>
<p><span style="font-weight: 400;">Creating a strong relationship marketing plan is the first step to growing your business through customer loyalty. By building an organized strategy before you take action, you cultivate more effective relationships and amplify your results.</span></p>
<p><span style="font-weight: 400;">Here are a few examples of how you can work toward your first customer-focused marketing campaign:</span></p>
<h3><b>01. Create a customer loyalty program</b></h3>
<p><span style="font-weight: 400;">One of the most effective relationship marketing tactics is developing a program that’s built to </span><a href="https://www.podium.com/article/three-solutions-increase-customer-loyalty/"><span style="font-weight: 400;">increase customer loyalty</span></a><span style="font-weight: 400;">. Loyalty programs can take many forms—including points-based programs and even paid VIP clubs—but their main role is always to reward your repeat customers for choosing your brand. Whether you’re an airline offering frequent flyer miles or a coffee shop with punch cards, you can make sure every buyer feels valued by rewarding their continued business.</span></p>
<p><span style="font-weight: 400;">Loyalty rewards provide far more than short-term customer satisfaction. An MIT study found that participants in top-performing loyalty programs were </span><a href="https://sloanreview.mit.edu/article/why-customer-experience-is-key-for-loyalty-programs/"><span style="font-weight: 400;">77% more likely</span></a><span style="font-weight: 400;"> to purchase from the rewarding brand as opposed to competitors. They also tended to spend more money with the brand and recommend the brand to others. Consequently, this relationship marketing technique can even increase your word-of-mouth promotions and online reviews.</span></p>
<h3><b>02. Guarantee reliable customer service</b></h3>
<p><span style="font-weight: 400;">Regardless of whether a consumer is buying from you for the first time or back for the thousandth purchase, they may need your support at any time. When they look for ways to reach out, your company should be ready to respond. Approximately </span><a href="https://www.forbes.com/sites/blakemorgan/2019/09/24/50-stats-that-prove-the-value-of-customer-experience/#3d52e7c84ef2"><span style="font-weight: 400;">96% of consumers</span></a><span style="font-weight: 400;"> agree that customer service has a huge impact on brand loyalty.</span></p>
<p><span style="font-weight: 400;">Relationship marketing can be as simple as demonstrating your brand’s attentiveness to current customers by providing responses with a quick turnaround—think a couple of hours max. With Podium’s automation tool, you can automate instant responses (even to confirm a message has been received) to help buyers immediately feel heard. With </span><a href="https://www.podium.com/webchat/?_bt=273372236357&amp;_bk=podium%20webchat&amp;_bm=e&amp;_bn=g&amp;_bg=53965142057&amp;gclid=Cj0KCQjwyZmEBhCpARIsALIzmnIw1igQTf6gC7H-Ko4YrBcq_D-rQU75qTx6iEGL3KnzWtDFaXmgM54aAgZJEALw_wcB"><span style="font-weight: 400;">Webchat</span></a><span style="font-weight: 400;">, you can ensure that messages are routed to the right teams quickly and that nothing falls through the cracks.</span></p>
<p><span style="font-weight: 400;">When it comes to responding to your customers’ feedback and inquiries, your team members should be well-trained to provide shoppers with a consistent experience that they love. </span></p>
<h3><b>03. Collect customer data</b></h3>
<p><span style="font-weight: 400;">The richer your data, the better you’ll be able to curate your customer experience to your buyers’ needs. Relationship marketing is all about showing how much you care about your customers. Presenting enough data to prove you’re listening can help big time.</span></p>
<p><span style="font-weight: 400;">When compiling data, many companies choose to use a </span><a href="https://www.podium.com/resources/crm-examples/"><span style="font-weight: 400;">customer relationship management (CRM) software</span></a><span style="font-weight: 400;"> to keep it organized in a centralized place. Using your company’s CRM tool, your employees can better understand buyer needs in every customer interaction.</span></p>
<h3><b>04. Personalize every interaction</b></h3>
<p><span style="font-weight: 400;">With enough customer data, you can continue building close relationships with your shoppers by personalizing every message. When companies add personal elements to their email marketing alone, their click rates end up 27% higher. You can personalize interactions by recalling purchase history and preferences and addressing customers by name along with relevant promotions or information.</span></p>
<p><span style="font-weight: 400;">This relationship marketing strategy works because it’s an effective method of showing customers they’re more than one face in a massive group. Rather, you see them as individual humans who play a big role in the success of a business. As a result, you’ll drive your customers to return and continue to support your brand.</span></p>
<h3><b>05. Follow up</b></h3>
<p><span style="font-weight: 400;">When you think about how to build great relationships with your customers, consider how you maintain relationships with your closest friends. You talk and you interact—and then you follow up.</span></p>
<p><span style="font-weight: 400;">Just as you and your friends keep your relationships strong by checking in and asking each other to hang out, relationship marketing calls for business owners to consistently reach out to consumers. For example, you could follow up each time a customer makes a purchase to check if your product or service has reached their needs. A couple of weeks later, you may reach out again to re-engage them with what you have to offer.</span></p>
<h2 data-pm-slice="1 1 [&quot;list&quot;,{},&quot;list_item&quot;,{&quot;indent&quot;:2,&quot;type&quot;:&quot;bulleted&quot;}]">What’s the difference between customer loyalty and customer retention?</h2>
<p>The ultimate goal of great relationship marketing is to keep customers longer (<a href="https://www.podium.com/guides/customer-retention-and-repeat-business/">customer retention</a>) and encourage them to buy/use more of your products and services (<a href="https://www.podium.com/article/happy-customers/">customer loyalty</a>).</p>
<h3>Customer retention</h3>
<p>Customer retention refers to the ability of a company to keep its customers over time. This can be achieved through various means, such as providing excellent customer service, offering competitive pricing, and regularly communicating with customers.</p>
<p>Companies with high customer retention rates are able to maintain a stable customer base and can continue to grow their business.</p>
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<h3>Customer loyalty</h3>
<p>Customer loyalty refers to the positive feelings and attitudes that a customer has towards a company or brand. This can be based on factors such as:</p>
<ul>
<li>The quality of the company&#8217;s products or services</li>
<li>The level of customer service</li>
<li>And the overall <a href="https://www.podium.com/guides/local-guide-to-customer-experience/">customer experience</a></li>
</ul>
<p>Loyal customers are likely to continue purchasing from the company and may also recommend the company to others.</p>
<h2>Why are customer loyalty and retention important?</h2>
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<p>In short, customer loyalty is the emotional attachment that customers have towards a company, while <a href="https://www.podium.com/guides/customer-retention-and-acquisition/">customer retention</a> is the ability of a company to keep its customers over time. Both are important for the success of a business, as they can lead to increased revenue and long-term profitability.</p>
<h2>5 tips to improve customer loyalty &amp; retention</h2>
<p>Alright, so you understand the key differences, now, how can you do better? Here are five tips from our own customers about how you can improve your customer loyalty AND retention:</p>
<h3><b>01. </b><strong>Provide excellent customer service</strong></h3>
<p>Emotions can run high when things don&#8217;t go as planned. People remember an excellent customer service experience during these times. Customers are more likely to remain loyal to a company if they feel that their needs are being met and their concerns are being addressed.</p>
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<h3><strong>02. Offer competitive pricing</strong></h3>
<p>Sometimes, it does come down to a number game. People want to feel like they&#8217;re getting good value for their money. Offering <a href="https://www.podium.com/article/pricing-strategy/">competitive pricing</a> can help to retain customers by demonstrating that the company is committed to providing the best products or services at the best prices.</p>
<h3><strong>03. Regularly communicate with customers</strong></h3>
<p>Staying in touch with customers on a regular basis can help to build a strong relationship and foster customer loyalty. From an engagement standpoint, this can be achieved through <a href="http://get.podium.com/newsletter">newsletters</a>, <a href="https://www.podium.com/guides/combine-sms-and-email/">email campaigns</a>, or <a href="https://www.podium.com/guides/social-media/">social media</a> interactions. But it&#8217;s also important you stay on top of the communication channels your customers frequent. Text is a powerful tool for staying close to customers, as it has a 98% open rate. Learn more about sending text campaigns <a href="https://www.podium.com/texting-templates/">here</a>.</p>
<h3><b>04. </b><strong>Ask for feedback and act on it</strong></h3>
<p><a href="https://www.podium.com/article/feedback-collection/">Gathering feedback</a> from customers can provide valuable insights into their needs and preferences. Actively listening to customer feedback and making changes based on their suggestions can help to improve customer satisfaction and retention.</p>
<h3><strong>05. Offer rewards and incentives</strong></h3>
<p>Rewarding loyal customers can help to build their emotional attachment to the company. This can be done through loyalty programs, promotions, or special offers. Providing incentives can help to encourage customer loyalty and retention.</p>
<h2>Customer retention skills: How your employees can improve customer retention</h2>
<p>There are several key customer retention skills that businesses should develop. For example, the ability to listen to and understand customer needs is essential. This involves actively listening to customers and asking the right questions in order to fully understand their concerns and preferences.</p>
<p>Another important skill is the ability to resolve customer issues quickly and effectively. When customers have a problem, they want to feel that their concerns are being taken seriously and that the company is working to find a solution.</p>
<p>Effective communication is also crucial for customer retention. This means being able to clearly and effectively explain products or services to customers, as well as being able to address any questions or concerns they may have.</p>
<p>Overall, customer retention skills are essential for any business that wants to maintain a stable customer base and grow revenue. These skills involve listening to and understanding customer needs, resolving issues quickly and effectively, and communicating clearly and effectively.</p>
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<h2><b>Create stronger relationships to improve customer retention</b></h2>
<p><span style="font-weight: 400;">While earning repeat customers can take time, you can amplify your relationship marketing by implementing helpful tools into your marketing plan. With simple steps and marked improvement in consumer relations, you’ll be able to convert customers for life. </span></p>
<p><span style="font-weight: 400;">Have you tried <a href="https://www.podium.com/webchat/">Webchat</a>? Webchat empowers you to deliver the optimum customer experience and start the conversations that matter. <a href="http://www.podium.com/free-trial">Get started free.</a></span></p>


How Relationship Marketing Inspires Customer Loyalty and Retention

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