Relationship marketing shouldn’t be looked at as a new concept. It’s been around for some time but with the advent of Web 2.0 and social media prevalence in society it has become more important.
Successful businesses, organizations and bloggers have one thing in common in today’s social world. They have recognized the value of long term social relationships and focus on establishing an open dialogue with those in the relationship. Recognizing the power presented by social media they have moved from the intrusive advertising and sales message to one that’s more collaborative and social.
While some have argued the effectiveness of relationship marketing there’s no denying the far reaching implications of communicating with and nurturing both new and existing clients through the social networks such as Facebook and Twitter.
Relationship marketing is seen as one of the fundamental pillars required to build brand recognition and to find, attract and win new clients.
Platforms such as Facebook, Google+ and Twitter place both companies and products in direct contact with clients. Here, companies and organizations can gauge satisfaction levels of existing clients and focus on retention through a mutually beneficial relationship. Companies can focus on maximizing profits from its existing customer base through established relationships thus reducing the impact of the “leaky bucket” where companies focusing on acquiring new customers typically displace older customers.
Attracting new customers through traditional marketing efforts is expensive. The time and resources poured into advertising are highly ineffective at swaying opinions. Competing with those in a particular niche can be difficult and garnishing a small portion of a person’s attention is often impossible.
In the online social world, relationships develop naturally based on recognition and grow because of trust and engagement. People share their likes and dislikes openly, interact with friends and family and have open dialogues daily. Word of mouth referrals come from “Likes” and “Shares” cost a company nothing and moves to increase profitability.
Companies successfully leveraging relationship marketing have the initial cost of customer acquisition which gets spread throughout the entire relationship. The longer the relationship the more profitable future transactions become. Costs are reduced simply because of the existing relationship.
Relationship marketing makes it more difficult for competitors to enter a market. Customers are less inclined to switch to a competing product, are less sensitive to price fluctuations and also purchase more related products because of the relationship that exists.
Companies have to spend less and less money educating their customer base because most have a familiarity with the products and services. Additionally, it makes the employees jobs that much easier.
Social media sites have made relationship marketing that much easier today than it was ten years ago. Both customers and companies now occupy the same social landscape and interact on a daily basis. It’s easier to monitor social activities, deal with issues that may damage relationships and take measures to grow the relationship through personalized service and interaction.
Profitability is ultimately about making the sale while minimizing costs. Relationship marketing capitalizes on loyalty and trust, allowing companies to maximize its profits in the long term while spreading costs associated with both customer retention over the course of the relationship.