Relationship marketing outlined

A commonly held marketing statistic reveals that, on average, businesses spend the majority of their marketing dollar prospecting for new customers rather than nurturing and developing relationships with current customers.

These statistics also tell us that on average it can cost six to seven times more to sell something to a prospect than to sell that same thing to a current customer, and that repeat customers spend 33 percent more than new customers.

Although these statistics are observing general trends, it is worth taking the time to evaluate whether you are effectively nurturing current customers in a way that develops opportunities that exist for repeat and new business. This could be a key to unlocking growth that is right in front of you.

Some of the more recent marketing thinking views the value or benefit of a ‘good or service’ as being ‘co-created’ with customers through strong relationships and collaborative business development. To this end, Relationship Marketing focuses on the development of market or industry sector strategies, creating profitable partnerships and long-term relationships with both customers and suppliers.

The following provides some basic pointers in developing this area of your marketing thrust:

  • Research and intelligence gathering on customers and competitors.
  • The development of more personal or direct networks that lead to referrals or sales.
  • Leading / overseeing formal proposal or presentation opportunities.
  • Developing plans for winning new work from existing or target customers.
  • Developing plans that focus on existing customer satisfaction, retention and growth.
  • Creating a customer-centric culture across the business.

As the name suggests, relationship marketing is more of a customer or market facing role so having strong inter-personal skills in support of the above actions will have a significant influence on the success of your marketing activities.

There are a number of tips listed below that may be useful to you depending on the product or service your business is involved in.

Relationship building should be everyone’s responsibility

Regardless of role, make sure everyone knows about the business so they can confidently communicate this information to others. Share details with colleagues about products and services, strategy, performance, successes and industry trends. Communicate internally on a regular basis and recognise those who excel.

Value all business relationships

Today you may not consider someone to be influential but tomorrow they could be your customer, so don’t leave them with a negative first impression.

Have a robust process for proposals / tendering

Not all formal opportunities are worth investing significant resources on, so ensure you have a tested and robust process around the ‘do we or don’t we’ question. Consider the likelihood of winning, strategic fit, profitability and how well you know the decision makers.

Your best customer is the one you already have

Never take existing customers for granted. Take the time to get to know them and their business to enhance the relationship. You will increase opportunities to win more business and receive referrals from customers that value your efforts.

Meet before you propose

You will increase your chances of success with current or potential customers if you have met them face-to-face. Prepare well for the meeting and you will learn valuable information that your competition may not be aware of. Don’t forget to listen more than you speak.

Report card

Whether you win or lose a specific piece of business or new customer opportunity always ask for a post-decision debrief. You will learn what you did well and not so well to ensure future success.

Given that you will spend significantly more to find new customers compared to maintaining and obtaining repeat business from current customers, it makes good business sense to grow and enhance the relationships that you have already spent time and money on establishing in the first place.

Published Spring 2011.

Serious about your success?