There are plenty of studies that highlight the importance of customer retention — oftentimes, customer retention has been found to be even more critical to your company’s success than customer acquisition.Frederick Reichheld of Bain & Company found as little as a five percent increase in customer retention can result in an increase in company revenue by 25–95%.
Adobe learned that returning customers spend more than newer customers. Why? Because existing customers understand the value of your products and services and they’re invested loyally in your brand. If a customer feels satisfied with their interaction with you, it’s a no-brainer for them to turn to your business for their needs, again and again.
No matter if you’re a team of one or leading a scaling enterprise, you can cultivate a deeper relationship with your existing audience without the typical costs associated with acquiring new customers. The key is strategic relationship marketing.
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What is relationship marketing?
Relationship marketing is a marketing strategy that cultivates deeper, more meaningful relationships with customers to ensure long-term satisfaction and brand loyalty. Relationship marketing is not focused on short-term wins or sales transactions — rather, it is focused on delighting customers for the long haul.
“But isn’t all marketing relationship marketing?” Not exactly. Some marketing tactics are solely about gaining traffic and conversions to get potential customers into the customer flywheel. From there, you’ll have even more marketing tactics that get that potential customer to make their first purchase.
The perfect time to start a relationship marketing strategy is when the customer has made a purchase (or several). Your goal with relationship marketing is to get these new customers to become brand-loyal patrons of your business. To do that, you’ll want to take a personalized approach and become integrated into their lives in a way that feels natural and genuine.
Here, let’s take a look at some relationship marketing examples and the tactics they use to make this strategy work. Then, we’ll explore how you can implement a strong relationship marketing strategy today.
1. Capital One
Capital One understands its customers deeply — all the way down to the small inconveniences that plague them most. One of those annoyances is the long TSA line at the airport.
Capital One reimburses all venture cardholders up to $100 when they pay the TSA PreCheck fee. All they have to do is pay for it with their Capital One credit card.
TSA PreCheck expires after five years, and this benefit can be used every time the cardholder wants to renew their PreCheck status. This benefit speaks to a relevant pain point for Capital One customers and makes keeping an account open with Capital One well worth it in the long run.
2. Fairway Independent Mortgage Corporation
Any homeowner knows that purchasing a home is one of the biggest and most important decisions one can make. Mortgage lenders know this, too. During the process of buying a home, buyers typically shop around for the lowest rate, but they’re also shopping for a reliable team that will make the process as smooth as possible.
Fairway Independent Mortgage Corporation is a great example of a business that takes the relationship marketing approach to customer relations. When the real estate market is moving quickly, Fairway stands out and offers its buyers more than just low interest rates. For example, I received a birthday email from Fairway which came right around the time I needed to make some decisions about my lender. In addition to that, the loan consultant was sure to send over some marketing documents with their value proposition and benefits for me as a buyer.
All of this showed me that the company was committed to being responsive, respectful, helpful, and most importantly — closing on time. This is a recipe for success in the mortgage industry as referrals are the “bread and butter of any successful loan officers business.”
3. GE
Relationship marketing is ultimately about offering both new and existing customers valuable content regardless of where they are in the buyer’s journey. Good relationship marketing should appeal to the first-time viewer as powerfully as it appeals to your long-term customers to ensure your customers can grow with you over time.
GE does a great job of diversifying its content, and the platforms on which it promotes, to ensure it satisfies as many people as possible. For instance, GE created two sponsored podcasts in the sci-fi genre. It seems strange, but GE positions itself as an “inventor of the future of industry,” so it makes sense that the company might dabble in the world of what-ifs in the sci-fi genre. Additionally, the company has a popular YouTube channel that features historic, innovative stories from the perspective of GE employees. Whether you’re an existing customer or a prospective employee, content like this places GE directly into the lives of customers in a natural, helpful, and even entertaining way.
By consistently offering a diverse range of quality content, GE shows its desire to satisfy its long-term customers even at the expense of short-term wins.
4. Domino’s
In the past couple of years, Domino’s has taken its fair share of risks for the sake of innovation and improvement, including a series of ads called Pizza Turnaround, in which they showcased a series of negative customer reviews, read by real Domino’s employees, before promising a new and improved recipe.
These self-deprecating ads appeal genuinely to viewers but clearly go against any traditional sales playbook… which is why they work. By admitting an area of opportunity, Domino’s re-invented its brand as transparent and honest — and who wouldn’t want to buy from a company like that?
Additionally, Domino’s has conducted other genius marketing campaigns like the Domino’s wedding registry, in which soon-to-be-married couples can create their own pizza registry, and Avoid the Noid, where the company partnered with every state in the US to repair potholes to limit the number of damaged pizzas being delivered. Domino’s has also done a fantastic job tapping into their digital audience — at one point, the company even allowed people to order pizza using a simple pizza emoji. Now, 70% of Domino’s sales are through digital channels.
Ultimately, there are plenty of innovative steps Domino’s has taken to cultivate a loyal, long-term customer base. They accepted short-term losses for long-term gains by slowly and strategically re-inventing their product and their brand while still engaging with their customers on their favorite digital platforms.
5. Panera
Panera’s commitment to health and convenience has resulted in 40 million Panera loyalty members.
In 2014, Panera issued a statement promising its customers it would remove all artificial flavors, sweeteners, and preservatives from all Panera products by the end of 2016. The company remained transparent throughout the process, publishing progress reports to demonstrate a level of accountability and transparency to its customers.
Undoubtedly, it was a risky decision to admit they’d previously used unhealthy ingredients in their food — but it paid off big-time in 2016 when the brand could officially say “100% of our food is 100% clean”.
Additionally, the brand continues to focus on cultivating strong relationships with its customers through personalization. For instance, Panera alerts loyalty members about new food offerings they feel will meet the member’s “flavor profile” based on past purchases.
The company also meets its customers where they are — starting an online grocery business as a result of the Covid-19 pandemic. Panera even offers home and business delivery, rapid pickup, and catering in an effort to better serve its customers.
6. Marriott
Undoubtedly, a 35-minute film is not the most traditional avenue a hotel can take when it wants to increase sales — and yet, that’s exactly what Marriott chose to do with their film, “Two Bellmen Three”.
This film enables Marriott to appeal to a younger demographic and build brand awareness on dominant platforms like Snapchat. Best of all, their content rarely resembles an advertisement and is typically focused on providing an audience with fun, or helpful, information on various travel destinations.
7. ArmorSuit
ArmorSuit’s warranty policy begins like this — “Most warranties are limited to 30 days or one year, but with our Lifetime Replacement Warranty, our customers can request for a replacement screen protector for a lifetime. This way, you never need to purchase a whole new kit when a replacement is needed.”
This way, you never need to purchase a whole new kit — a phrase you’ll likely never hear in traditional sales transactions. ArmorSuit’s lifetime warranty represents the company’s steadfast commitment to keeping its customers satisfied. While it might seem ridiculous to offer a lifetime warranty, it makes sense for building strong relationships with ArmorSuit’s customers — when the company’s customers then need other products related to tech, they’ll most likely check out ArmorSuit’s website first.
Next, let’s explore how you can create a strong relationship marketing strategy for your own business.
