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Relationship Marketing: Authenticity and Honesty is What Sells


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Acquiring a new customer is 5 to 25 times more expensive than keeping those you already have. A business that consistently shoots for new acquisitions as their primary sales objective, will inevitably fall short with modern consumers. The less you prioritize people, the less they will buy from you.

Modern customer relationship management is about forming long-term relationships and treating the buyer as a unique individual. The more a brand focuses on customer experience, the more likely buyers will do business.

Companies use relationship marketing to create a higher level of brand loyalty, which means, if/when you mess up, people are more forgiving.  It also inspires authentic referral marketing, since customer satisfaction is the main focus.

A customer that is fully engaged exhibits 51% higher revenue and sales than an actively disengaged customer. For a company to succeed, you must provide a deeper emotional connection. This is where the business strategy of customer relationship marketing is highly applicable.

What is Relationship Marketing? 

A group of people talking and drinking coffee.

In order to gain a full grasp of the importance of relationship marketing, you must first explore exactly what it is and how it will benefit your business.

Relationship marketing was developed to foster consumer loyalty. Unlike customer acquisition, which focuses on short-term goals and individual sales, relationship marketing is aimed at enhancing customer lifetime value and providing information directly suited to their needs and interests. This involves a marketing plan that focuses on customer retention and satisfaction over transactions or demographics. 

Did you know that 20% of your current customers will account for 80% of your company’s future revenue? Additionally, customers who are fully engaged always spend more. It’s a natural progression in the buyer journey. This entire strategy is about nurturing customer loyalty and paying attention to your existing customers. 

The Top Benefits of Relationship Marketing

There are many advantages to focusing on personalization in your customer interactions. Relationship marketing can:

  • Increase customer satisfaction
  • Improve retention rates
  • Enhance word-of-mouth marketing
  • Lead to higher conversion rates
  • Augment collaboration and communication
  • Lead to positive reviews
  • Creating lifelong brand advocates

This type of marketing, which relies heavily on word-of-mouth promotion, is the opposite of transactional marketing. That system ignores the ramifications of a relationship and goes straight to making a sale. Developing a robust relationship marketing strategy is the first step to building strong relationships with long-term customers. 

Different Types of Relationship Marketing

Marketing efforts have changed drastically in the past few decades. Now, in order to build relationships, the entire process happens in stages, each with a higher level of commitment. There are different levels of relationship marketing that include:

Basic Marketing

This is the traditional form of relationship marketing in which a brand works to entice the customer to buy. The focus is on the product or service being sold and how great it is. This is a form of direct selling with no follow-up after purchase and no further communication or feedback requested. This style reels people in with a simple message, price, or promotion. It’s a sell for the sake of making money, and nothing more.

Reactive Marketing

At this level of commitment, a brand actively seeks feedback from customers. Whether it is a compliment on social media, complaint, suggestion, customer engagement, or product idea, a business is open to it with a reactive marketing approach.

There is some effort to build a relationship with the customer when the situation or opportunity arises. This is not a typical digital marketing technique. It is inbound marketing focused on purchase reactions.

Accountable Marketing

This level of relationship marketing is about promising and delivering. It continues the buyer’s journey after purchase and puts a spotlight on customer retention rates and strategies. This involves checking with customers after they purchase and offering related products as they arise. Loyalty programs and rewards programs are also incentive strategies used in accountable marketing. 

Like a friend calling to see if you need anything, accountable marketing is about having confidence in what you offer and actively providing solutions to problems—sometimes before people know they have them. This is also the time to ask for customer feedback and take the appropriate actions accordingly.

Proactive Marketing

This is a form of relationship marketing where a brand keeps consistent tabs on its customers to build effective relationships. It’s not a one-off sale or a temporary interaction. The strategy is very personal. It pays close attention to what people want and uses customer data to understand purchasing behavior.

A lot of companies choose email marketing as a way to perform proactive marketing. The data is then used to produce more engaging marketing campaigns. The accumulation of consumer information allows a business to relate to a multitude of situations in an authentic way.

One real-world example of proactive marketing is virtual assistants like Alexa. They keep close tabs on what a customer desires and then make suggestions at opportune moments. 

Partnership Marketing

This is a form of relationship marketing with a high level of collaboration. Two businesses work together in a mutually beneficial and promotional relationship towards a common goal. It could be for a specific campaign, product, or set amount of time. It enables both companies to increase brand awareness and improve sales. Partnership marketing is a great strategy for small businesses, startups, and e-commerce companies. 

One form of partnership marketing is known as affiliate marketing. This individual/entity is responsible for promoting products and engaging potential customers. Affiliates have a large target market they cater to, and will receive one-time or recurring commission payments for every sale.

A business typically finds affiliates through a platform known as an affiliate network. It helps a company open up new sales channels and build a database of potential leads.

One real-life example is the partnership between Microsoft and Nokia. Microsoft develops the Windows operating system that runs on Nokia Lumia devices. It’s strategic relationship marketing between a software and a hardware company where all parties win.

Generic Examples of Relationship Marketing

There are several types of activities an organization can use to facilitate relationship marketing. This includes:

  • Thank customers for their business through a social post or surprise gift card.
  • Solicit customer feedback using polls, surveys, and calls, which induces a positive impression that you value customer opinions to create better products/services.
  • Provide over-the-top customer services to consistently impress consumers and create a sense of loyalty.
  • Start a customer loyalty or rewards program to keep people engaged.
  • Go the route of traditional marketing by holding events to connect with customers and the local community.
  • Offer discounts and bonuses to repeat and long-time customers.
  • Create brand advocacy programs to reward consumers who provide word-of-mouth advertising and/or user-generated content marketing.

Power your entire partner payouts operations

98%

Customer Satisfaction

$50B+

Annual Transactions

4M+

Partners

4,000+

Customers

99%

Customer Retention

Real-World Examples of Relationship Marketing in Action

Sometimes, the best examples are case studies from the real world. The following are examples of relationship marketing in action from top brands you may know:

Delta Airlines

A white airplane flying in the sky.

The SkyMiles program is one of the industry’s most effective customer loyalty programs, and for good reason. Customers earn miles based on the amount of money they spend, which can be redeemed for future travel. To expand this offering, Delta has also partnered with credit card companies to increase their functionality. Customers can now gain points on American Express purchases.

Through these relationship marketing strategies, Delta has been able to build a fiercely loyal customer base that continues to choose them over the competition. This strategy has paid off so well that J.D.Power ranked them #1 for customer satisfaction across all North American airlines.

Domino’s Pizza

A pizza on a white plate next to a bottle of ketchup.

Domino’s created an innovative twist that took negative customer feedback and turned it into a marketing campaign called the Pizza Turnaround. These are self-deprecating ads that showcase negative customer reviews—which is why they work. And in the end? Dominos promises to do better, which resonates with customers.

Although this goes against the traditional sales playbook, it worked beautifully. The brand slowly and strategically reinvented itself, while engaging with customers on their favorite platforms.

Capital One

A rendering of a capital one bank in new york city.

Capital One has a program that reimburses all venture cardholders up to $100 when they pay the TSA PreCheck fee. The only thing customers have to do is pay for it using their Capital One credit card.

TSA PreCheck will expire after five years, and this benefit will apply every time the cardholder wants to renew their PreCheck status. In this situation, Capital One is demonstrating its brand value by offering a universally appealing perk and mitigating issues customers face, with a long-term resolution.

The Capital One offering speaks to a relevant pain point for credit card customers and makes keeping an account with them worth it in the long run.

Fairway Independent Mortgage Corporation

A mortgage calculator with a phone and a house on top of it.

Fairway takes the relationship marketing approach to customer retention. For example, their email marketing campaigns include birthday emails with lending offers. The loan officer can also send over marketing documents with their value proposition and benefits for you as a buyer. This enforces their service offering with valuable supporting documents.

Fairways’ retention strategies show that the brand is committed to being responsive, helpful, respectful, and, most importantly, will close on time. This is a recipe for success in the mortgage business, as referrals are their bread and butter.

Why is Relationship Marketing Important?

The foundation of your customer base depends on it. Relationship marketing is important for business because it better defines an audience and gives you the ability to stay in close contact with customers. These are the people who offer invaluable information that can steer your business in the right direction.

By understanding how consumers use a new product/service and observing unmet customer needs, a business can offer additional features to create a deeper level of satisfaction. This further strengthens the relationship.

This tactic is about repeat customers and focusing on the long haul. You want these people with you for the ride. Let them know. This type of marketing helps to earn referrals too, because when your customers are happy, they tell other people. It boils down to building relationships that encourage customer loyalty and keep people coming back.

The most successful brands are the ones that work hard to know their audience, and speak to them like friends.

Can You Automate Relationship Marketing?

Marketing Automation (MA) is a process in which technology automates repetitive, periodic tasks in a marketing campaign. When a fully-functional MA solution is integrated with your CRM system, a business can create, execute, and automate a series of timed actions to generate sales leads.

Although there are parts of relationship marketing that can be automated, not everything is subject to digitization. Some common tasks that can be enhanced with technology include:

  • Email marketing
  • Loyalty and rewards programs
  • Personalized notifications
  • Social media management
  • Targeted paid digital marketing

Different software programs can handle a variety of customer relationship management (CRM) tasks depending on what you need.

How can you scale up and automate payment processes?

The first goal for every serious digital-first business is to reduce costs and streamline manual tasks.

This is more than just sales metrics or reducing churn. It’s fundamentally about showing people a brand is more than a business. It’s an entity that values customers and strives to give them what they want. Relationship marketing is as simple as showing loyal customers you genuinely care.

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