Generating more business activity with Relationship Marketing

in General Business Marketing

During heady boom periods companies focus a lot of marketing activity on traditional transactional marketing processes to find and close individual deals (transactions). Demand is good, buyers have budgets, businesses are busy and deals abound. Transactional marketing as the name implies is about each party maximizing the return on individual transactions. It’s about immediate value delivery and short-term revenue generation. For many B2B companies, transactional marketing typically focuses on acquiring new customers and gaining market share.

But as we all painfully know, economic cycles go up and down with boom periods giving way to slow periods. Transactional marketing doesn’t work well during slow periods because demand decreases significantly, spending is restrained and there are fewer new transactions to be had. Some companies continue pursuing a transactional marketing approach during slow times by using special promotions, discounting, and other tactics to keep new transactions flowing. Besides being ineffective, these short-term tactics create longer-term detrimental consequences.

Relationship marketing on the other hand focuses on long-term customer loyalty, retention and satisfaction to generate a continuing revenue stream from existing customers. The “relationship” is not about some cozy, kumbaya intimate friendship with a customer. Relationship Marketing is about a continuing mutually beneficial business relationship process that encompasses the entire life-cycle of a customer.

Relationship marketing continues whether or not a customer intends to buy right now or maybe some time in the future. Relationship marketing is ultimately about generating additional revenue from existing customers using appropriate retention and loyalty methods. The key to successful relationship marketing is to tune your retention, loyalty and marketing activities to relevant and prevailing circumstances.

How to use this information to benefit your business

  • Stay engaged with customers – find some appropriate vehicle such as a newsletter, podcast, blog, Twitter, etc. to communicate with customers between transactions.
  • Listen to your customers long enough and they’ll tell you whether, what and when they want buy.
  • Know your customers – understand their circumstances and tune your marketing and offerings accordingly.
  • Watch for events that affect your customers – how can you leverage these events to engage with your customers for marketing?
  • If relevant to your business, monitor customer service / support activities for trends in issues and complaints. Avoid defections and seize opportunities.
  • Even though your focus is on retention and loyalty, always provide meaningful value that customers appreciate during the relationship marketing process.

The basic premise of relationship marketing is to stay engaged with customers and keep them long enough to buy more stuff from you.
Copyright © 2009 Ingistics LLC and Marketance™

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