As defined by the Business Dictionary, relationship marketing is, “Promotional and selling activities aimed at developing and managing trusting and long-term relationships with larger customers. Customer profile, buying patterns, and history of contacts is maintained in a sales database…”
What’s happened to Relationship Marketing? Has it gone out of fashion?
The supermarkets use the same old tired out loyalty cards – anyone who uses them probably has one for each supermarket.
The Banks still rely on introductory offers – or at the very least promise to offer no more than a new customer who’s shown no loyalty at all.
Receiving a 20% discount – as a surprise – after staying with a bank for five years would make people think about staying for another five. And you’d be targeting loyal, stable customers; not paying set-up fee for a risky customer who’s shown they move about.
Just how far have we progressed from Air miles?
MyFace, SkypeBo, TwitTube, community web sites, customer reviews and best-of-lists – all these things are becoming a need-to-have for the new generation.
Companies can no longer set their prices by locality, hoping to get greater margins in wealthier economies. And locality isn’t so important anymore anyway. Lifestyle targeting is more likely to find you the right customers.
And while call centres have made customer support easier and cheaper, it should be seen as an opportunity to enhance service, not cut costs. Satisfactory resolution of customer complaints can improve brand image and generate immediate sales.
Relationship marketing was always about personalising the experience. Getting proper lifestyle information – and enough of it to serve the customer with appropriate, conversion optimised promotions.
It’s about recognising that if you get a sale through a half-price offer, most of the customers will stop buying it when the promotion ends. A promotion that enhances the relationship, such as tokens for schools offer, may get a customer for life.
Now, more than ever, the challenge is not to use the internet to spam millions of people with a one-size-fits-all advert.
Look to Google to see how target marketing will work in the future. To properly understand someone (using a computer database) you need a lot of information and you need feedback when you are analyzing their behaviour and buying patterns. And to get that information you need to offer a lot of useful stuff – probably for free.