I. What Is Relationship Marketing?
Relationship marketing is a business strategy that builds and nurtures long-term personal connections between your brand and your existing customers, increasing engagement, satisfaction, and loyalty.
With increasingly expensive customer acquisition costs, customer retention is one of the most critical factors in a company’s success. According to Semrush, the probability of selling to an existing customer is between 60% and 70%. In contrast, the likelihood of selling products or services to a new customer is only between 5% to 20%.
Relationship marketing is a force multiplier. How? Quality customer experiences deepen the trust and devotion customers have for your brand. Interacting with repeat customers through ongoing conversations creates bonds that competitors struggle to break. The result: Long-term customers who increase your CLV (customer lifetime value) exponentially and even generate new leads.
First, let’s dive in and showcase five businesses that are hitting it out of the park.
II. 5 Relationship Marketing Examples
Patagonia has created a brand identity that solidifies its standing as an environmentally conscious business, appealing to consumers who value using organic and recycled materials. They have proven it by encouraging customers to purchase used Patagonia clothing rather than new. They have also offered customers clothing repairs from a mobile repair shop, mending broken zippers and tears and offering DIY solutions -- without charge.
Like-minded consumers believe that Patagonia stands for a higher purpose than turning a profit and are inspired to support a brand that concretely demonstrates their values.
Starbucks helped make getting a cup of coffee what it is today. Starbucks is a cultural icon as it is a business, showcasing its ubiquitous cups in social media posts on Instagram, Facebook, Twitter, and Pinterest. For example, Starbucks’ tagline on Pinterest reads, “Inspiring and nurturing the human spirit – one person, one cup, and one neighbourhood at a time.”
Starbucks sends frequent emails to their customers, informing them of offers and product launches. They also share customer content on their social channels. Their tight-knit community often lines up before sunrise for the chance of obtaining their latest holiday-themed cup or specialty beverage.
General Electric (GE) is a multinational conglomerate whose tagline is “building a world that works.” GE has set itself apart from traditional energy companies by positioning itself as an innovator, thought leader, and sustainable technology company. In addition, GE has focused on employee participation and compelling storytelling to craft an identity as a global content marketer.
Their GE Reports website is an excellent example of content marketing, including podcasts, articles, videos, and infographics that help build strong relationships with your customers. They achieve their goal of informing and educating their shareholders and the public about relevant topics through curated content for segmented markets.
4. American Express
American Express (Amex) has successfully mastered the customer journey. Its strategic marketing campaign approach encompasses account applications, onboarding, engagement, cross-selling, and referrals, making it one of the most successful credit card businesses today.
Their account opening process is customer-friendly and straightforward, taking only 30 seconds to complete. New customers receive bonuses via direct mail, including discounts and travel perks. In addition, their multichannel “Share the Love” referral program (promoted online, on social media, and via email marketing) is strong, granting the referring party 15,000 bonus points.
To capture the elusive millennial market, T-Mobile began offering consumers mobile service without contracts. This approach (unorthodox for telecom carriers) proved wildly successful, improving customer satisfaction, engagement, and referral business.
T-Mobile provided weekly thank-you gifts and customer rewards to participants. In addition, they focused on their mobile app, offering reward redemption opportunities and targeted offers that captured customers’ attention and enhanced engagement. According to Nielsen, T-Mobile went from Number Four to Number One in customer service satisfaction as a result.
III. Benefits of Relationship Marketing
Now that you’ve seen relationship marketing examples in the wild, let’s discuss some of its benefits.
Higher Customer Retention
Relationship marketing turns potential customers into happy, loyal customers who buy more often. Studies show that fully engaged customers spend 23% more than unengaged customers.
Happy customers want their friends to be happy too. 92% of consumers trust referrals from people they know, and customers referred by a friend are four times more likely to buy.
Even in this digital age, word of mouth is priceless, and you should treat any customer who refers their friends or family to your business like royalty.
Return on investment is a key performance indicator (KPI) that often determines a marketing strategy's success or failure. Increased retention drives customer acquisition costs down, making more marketing dollars available for long-term relationship marketing efforts.
Increased Competitive Advantage
If you think everyone has realised the value of relationship marketing, think again. There are still vast opportunities to use this powerful tool to gain a foothold in a very competitive marketplace. Building quality relationships can help you stand apart in the sea of sameness, cementing long-term success.
Enhanced Brand Reputation
Happy customers are your most important asset. Satisfied customers often use social media platforms to talk about their experience with companies, both good and bad. Inspiring your customers to sing your praises enhances your brand reputation, leading to new customers and repeat sales.
How to Get Started With Relationship Marketing
Ready to get started in relationship marketing? CM.com’s Mobile Marketing Cloud enables you to reach your customers on their favourite mobile channels, sending hyper-personalised messages that resonate and spark engagement.
Mobile Marketing Cloud is an omnichannel marketing platform built specifically for B2C marketers. It provides the user-friendly tools you need to create smart audience segments and dynamic workflows for hyper-personalised mobile campaigns, kick-starting your relationship marketing strategy.