Building a working relationship with customers is key to the long-term success of a business.
Having a strong connection based on trust and communication helps customers feel more secure and connected with a brand, and it can also lead to growing customer retention and your repeat purchase rate.
However, there are many more benefits to using the superpowers of relationship marketing. In this article, I'll share four reasons why your business should focus on building customer relationships, especially moving into 2021.
Ecommerce is on the Rise
Ecommerce, in general, is becoming increasingly popular. According to eMarketer, “US ecommerce sales will reach $794.50 billion this year, up 32.4% year-over-year.”
In addition to the general growth of ecommerce, the pandemic is accelerating the popularity of online sales. From CNBC, BestBuy saw that “online sales were up 242% during its fiscal second quarter.”
This is in largely due to consumers stocking up on electronic appliances for their home offices and other entertainment necessities while spending the majority of their time at home.
With consumers less likely to enter a physical store, it becomes more important to start building strong relationships in the online space.
Consumers are spending less time browsing products and lingering in stores, so using your marketing channels to connect with them early is key. When you build deep customer connections, customers will think of your brand first when they need to purchase a specific item. This saves them time from searching the web for that product and discovering a brand they aren't sure they can trust.
In addition, when online shopping, ensuring the safety of a customer’s data is paramount to building a positive relationship. With a world that is defaulting to online communication and transactions, it’s becoming more of a priority to ensure your users’ data and private information is safe and secure.
Using Identity and access management resources to reduce risk and ensure safe customer information is a great initial step toward ensuring customer privacy. For instance, enabling multi-factor authentication means that you are required to provide multiple credentials to access information, such as a secondary password or a code sent to your phone.
Using technology tools to your advantage is a simple way to prevent possible security breaches, and consistently maintain customer security.
Customers enjoy being heard
Many consumers enjoy engaging with a brand and feel valued when brands provide opportunities to connect. Connection and relationships, in general, are very important to today’s shoppers, and the customer experience has a massive impact on purchasing decisions.
One study from PWC shared “73% of all people point to customer experience as an important factor in their purchasing decisions.” Fostering consumer engagement can be a great way to build customer loyalty and encourage brand advocacy.
There are several interactive marketing tools that businesses can use to ensure their customers are engaging with a brand and building customer relationships.
For example, when quizzes and surveys are incorporated into sales and discounts, customers are actively engaged with brands and have a memorable experience. Quizzes themselves direct customers to other items they may have been previously unaware of, and can increase average order value.
In addition to quizzes, actively request feedback from your customers through post-purchase surveys or emails. This shows you validate your customer's opinions, which fosters that community-feel and leads to customers engaging more.
Providing an experience that is more than simply clicking buttons, but enables the consumer to be engrossed in the buying process, can help people connect with businesses and be eager to return.
Building relationships increases customer retention
Building a relationship with customers is not an easy task, but putting in the effort can be extremely rewarding for both parties.
Building meaningful customer relationships is beneficial to both customers and organizations. In fact, 86% of customers who have an “emotional connection” with a brand are more likely to continue business in the future.
This reinforces the idea that a good first impression and nurturing consumer relationships from the start can pay off down the road.
In addition, when customers have a positive interaction with your brand, they'll be more likely to refer it to their friends and family. According to Millennial Marketing, “68% of consumers are willing to refer name brands to a friend.”
Providing a customer with a satisfactory experience expands your brand name and increases your audience. Word-of-mouth is an extremely powerful tool, not just with more popular celebrity names, but many people trust the opinions of the people they're most close with.
Encourage customers to talk about your brand. This can be through a clever “guerrilla marketing” campaign that creates discussion about your brand, or through something a little more simple like referral bonuses or discounts for friends and family.
Acquiring new customers is costly
Obtaining new customers is more expensive than retaining your current customers that are already investing in your brand. Harvard Business Review states, “acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one.”
Retaining customers, on average, provides a much more beneficial ratio for businesses, and continues to exceed as the highest revenue driver for businesses above acquisition, product innovation and paid promotion.
In addition, retaining customers can not only help decrease costs, but can help increase your bottom line substantially.
From the same article, “increasing customer retention rates by 5% increases profits by 25% to 95%,” showing a very positive ratio for many businesses. Ensuring you are building the proper customer relationships can save your business money, and in the long run, increase sales by a considerable amount.
It’s becoming crucial to build an engaged and supportive consumer base, founded on communication and a mutually beneficial relationship. Here are a few ways you can ensure the relationship is valuable to your customers:
- Offer informational livestreams that cover Q&As with employees.
- Provide sneak peaks on sales or new products.
- Offer insight into your business plans and how it will impact customers.
Keeping a constant flow of communication to your customers will ensure you're providing them with the best possible service.
Many customers enjoy engaging with a brand and creating a lasting relationship. By making the experience simple for customers to engage, you'll foster the type of connection that all businesses strive for.