What is relationship marketing and how can it help you get referrals?
You may be contacting fewer people and doing it less frequently but the biggest benefit of this is you will be attracting the right audience. This audience will love your content, they will love working with you and they will love telling everybody about how great you are. Professional services firms put great emphasis on referrals and relationship marketing is the best way of achieving this.
In short, relationship marketing is about trust and delivering on promises, as outlined by Dr. Christian Grönroos (1990).
"To establish, maintain and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfillment of promises".
When somebody signs up to receive your content it is done so in the trust that you will engage with them on the terms originally "agreed", at the point of sign up. This can almost be viewed as your first transaction with this individual. Contacts exchange their personal details in return for your valuable, timely, relevant content. This consequently allows you to build your brand equity, defined as:
A brand's power derived from the goodwill and name recognition that it has earned over time, which translates into higher sales volume and higher profit margins against competing brands. (Olenski, 2013)
Relationship marketing is different to other forms of marketing in that it is focused on customer satisfaction, customer retention and the long term value of customer relationships, rather than more short term, transactional relationships. If however, you take your contacts permission to market to them for granted and send them anything and everything that is not relevant to them, they may well get buyers remorse from this "transaction" and retract that permission for you to engage them, as you have broken that trust. This decreases your brand equity.
Avoid having a leaky bucket!
Customer centricity is one of the key concepts in relationship marketing. Rather than focusing on recruiting new customers to replace customers who move on (like a leaky bucket) emphasis should be put on retaining customers (Jim Blythe, 2009).
The "Right" way to do Relationship Marketing
In their book "Precision Marketing: Maximizing Revenue Through Relevance" (2012) Sandra Zoratti and Lee Gallagher suggest using analytics to achieve relevance in your marketing. Precision marketing is:
- Sending the right message
- To the right person
- At the right time
- Through the right channel
Companies that successfully engage their B2B customers realize 63% lower customer attrition, 55% higher share of wallet, and 50% higher productivity. (Gallup)
Firms hold so much data on clients, from regular CRM data and marketing insights through to financial and sales records. What's their general demographic? Have they paid their bills? Are they opening our emails? Did they come to our events? Are they giving us more work? Who knows who best? Do we have their explicit consent to market to them? What have they subscribed to? The key to doing relationship marketing successfully is bringing this data into one 360 degree view of that contact. With the technology solutions available these days there is no excuse why this cannot be achieved. An added bonus is that this will also make GDPR a breeze for you, possibly saving you 4% of your revenue or $20 million in fines!
Summary
You may be contacting fewer people and doing it less frequently but the biggest benefit of this is you will be attracting the right audience. This audience will love your content, they will love working with you and they will love telling everybody about how great you are. Professional services firms put great emphasis on referrals and relationship marketing is the best way of achieving this