Relationship Marketing
What is Relationship Marketing:
How You Can Build Your Business on This Idea
Relationship marketing refers to the activities undertaken by a business to establish and maintain profitability through long-term relationships with customers.
Relationship marketing differs from transactional marketing, or a one-time sale. Relationship Marketing is about a long-term relationship and the repeated sales. Transactional marketing emphasized customer acquisition and one time sales without giving much importance to building relationships for the long-term.
Companies have embraced relationship marketing finally because it's more profitable but also it is more human rather than being interested in someone just because they have money and might represent a sale you're interested in their long-term value. You help them as people to achieve their business goals by providing your products and services.
There are several benefits for relationship marketing. One is that you have a longer term relationship between both parties. This means that the vendor can help the customer even more as the vendor learns more about the customers goals. It's good for the customer because they know that we have strong relationship. The supplier will be looking out for them more and we'll also want to retain them longer and help four they can in pricing as well as other consultative areas.
In essence the best in relationship marketing means that the two parties are working together in a partnership. It is not a legal partnership in most cases. However, it's a partnership where friendship grows and you are relating to each other as human beings much more than just someone with whom you can make money.
And advantage for the vendor is that you get a competitive edge by having a strong relationship long-term with the customer. You're less likely to lose that customer as you're taking care of them because you know their needs. You have a better relationship with them and everyone wins that way.
Relationship marketing does take time. Whereas a transaction can take place and then be finished sometimes it takes longer to build that relationship as the two parties get to know each other.
There are a lot of analogies between this and a human romantic relationship. You want to get to know someone over time gradually building on past successes.
The poor stumbling adolescent male who asks for a relationship awkwardly or maybe too capriciously with women will not do as well as one who looks toward a longer-term relationship. The ideal is if you see someone and you're interested in them you strike up a mutually beneficial conversation. If that goes well then you might go and get coffee or luncheon together. If that goes well it might extend to a longer dinner together. If that goes well then the relationship can continue to grow as the two parties mutually agree to its progress and development.
When Relationship Marketing is done right it is one of the most effective tools in business for cultivating and retaining business. One of the biggest costs in business is initial customer acquisition. It takes a lot of advertising and a lot of time, money, and energy in order to make that sale. —- particularly for higher-priced ticket items.
By having a strong relationship with a customer and knowing their needs and wants more thoroughly, you're able to take advantage of special offers we're them and solve problems better for them than someone who did not know that period
I often like to refer to it as relationship farming. I grew up in the Midwest in farm country in Michigan. My family did not live on a farm ourselves but many of my friends around us did. As I grew up with my friends there in Michigan I learned to relate to those who make their living by providing food for the rest of us.
There are many analogies to agricultural farming and relationship farming. The process of farming begins by studying the environment. A successful farmer will study the soil and the conditions for growing a particular crop in that location. For instance, where I grew up in Michigan, the soil and climate are not suited for growing citrus unlike where I am now in central Florida. It is important to know the soil and the conditions where you are in business to find out what is the appropriate crops and offerings that you should make.
It's also important in farming to understand what the market is looking for. If there is an oversupply of a particular crop, say corn, then you realize you're not going to get as much for having extra corn. You might be better off growing some other crop that would be more in demand and give a higher yield in your agricultural output.
This is similar to marketing. You need to study what products and services you offer in business and offer what is in demand. You want to find out what you can do very well and what the market is asking for.
In agricultural farming before you can begin taking care of crops you have to prepare the soil and sow the seeds. This takes a lot of hard work tilling the soil breaking up sometimes very entrenched soil.
It's similar to starting a business, You have to know the environment and sometimes you have to cultivate those relationships initially as people might not be in the market for your product or service and human nature means they're going to be skeptical and leery of someone who wants their money and they don't know that person very well.
After you have sowed the seeds of agriculture you have to nurture and care for the crops as they grow. They're very fragile as they start growing and poke a leaf above the ground. The leaf of the crop is very fragile and subject to predators, wind and, and other natural enemies that ruin a crop. As the crops grow, they need the right amount of sunshine and rain. Too little or too much can kill the fledgling plants.
In business you have to take care of your relationship as you build trust and as people get to know you. You also have to watch out for competitors who can come along and try to take your customers from you.
Eventually there comes a time for harvest in agriculture. This is also a lot of hard work. I saw many of my friends who were not able to attend school on some days. This was because it was harvest time and they had to work the fields with their parents and others in order to get the crop at this time-sensitive part of the year
In sales there comes a time when you ask for the order. You don't want to do it too soon and you certainly don't want to do it too late. This takes practice and training to know when is the optimal timing.
Also another important consideration of farming at harvest time is that you take your best corn and use it for seed corn. In the Midwest we knew that soon after fall winter was coming. You need to prepare for winter year round. Winter is the time when the ground rests. Winter is a time when you prepare for the coming spring and the planting starts all over again.
In business, you're continually looking toward next quarter and next year. How you did this last year cannot be changed. Hopefully you get a lot of things right and generated resources as you helped your customers to achieve their goals. With new conditions on the horizon you have to adapt, improvise, and overcome challenges that come in business.
Yes, relationship marketing and relationship farming are the way to grow a business long-term. It does take planning, hard work, and the ability to keep going even when you might lose a crop. Sometimes that is very difficult. However in the long run, relationship marketing builds a stronger business that can last much longer and be better for everyone.
