Relationship marketing is the practice of building your business through your existing customer base rather than generating new customers through marketing and sales campaigns.

Traditional marketing practices focus largely on aggressive direct marketing with an aim to acquire new clients for expansion into newer geographical areas.

As opposed to that, relationship marketing aims to grow the business through existing clients but keeping them happy and fully satisfied. It focuses on growing the business through customer referrals and indirect word-of-mouth marketing.

Customers are the lifeblood of any business and no business can succeed or stay in operation for long if it does not pay sufficient attention to customers. Relationship marketing is a method of giving your customers all the attention they need and building strong bonds with them so that they do not leave your company; rather, they would spread word about your company and bring in more customers through their own references.

Take Care of Existing Customers

The logic behind relationship marketing is simple - a happy customer is your best marketer. Traditionally, most businesses tend to allot 80% of their marketing budget for the acquisition of new business and clients. Only about 20% of the total spend is allotted to servicing existing customers.

This can be a big mistake...

The primary reason a customer came to your company or purchased your product was that he felt that you have something he wanted and needed. If he feels that you are not seriously interested in him or his needs, or that you do not care about him, he will quickly turn to a competitor that is offering better service and is more responsive.

In such a scenario, you will soon start losing customers and the day would not be far when you would be struggling to make ends meet. However, with proper focus and attention on marketing to build and maintain relationships with your customers, you can avoid such a situation.

Building strong customer relations, being ever attentive to their requirements, resolving their issues quickly, and going that extra mile to deliver better than their expectations are all important aspect of retaining your customers.

Effective Relationship Marketing Techniques

There are some very effective and useful techniques that can advantageous to your business. These include:

Repeat Customer Incentives

Studies have found that repeat customers spend up to 35% more than new customers. If you have a good customer service policy and customers are happy with you, they can drive a big chunk of your revenues. One way of keeping customers happy and returning for more is to have repeat customer initiatives. These initiatives can include retention bonuses, loyalty incentives, and special repeat order discounts. Customers are always looking for that something extra from you, and by giving it to them through better customer service and/or monetary rewards, your customers will reamin loyal to you for a longer time.

Customer Referral Campaigns

There's no better promoter of your product or service than a customer who is happy with you. Customer referral campaigns work by capitalizing on this fact. By offering special incentives or discounts to customers for any referrals that they provide, you can increase the level of satisfaction such customers derive from their dealings with your company. Not only that, it also paves the path for the new customers they bring in to refer even more new customers.

Customer relationship and retention marketing is perhaps the strongest method of marketing and yet among the cheapest. Some of the biggest corporations in the world have been built and continue to thrive on the basis of strong marketing policies, based on these principles.

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