Why Brands Need Relationship Marketing in 2018
Relationship marketing is not a tool, but a strategy. It’s a way of looking at the relationship your brand has with customers, fans, and followers that parallels any other type of marketing tactic. Numerous studies show that referred customers convert at a higher rate, buy more, and hang around longer. In fact, across industries, 82% of Americans seek recommendations from friends and family when considering a purchase[1].
So in an era where most marketers and business leaders inherently understand the value of a high quality relationships, how can brands leverage these connections to drive revenue?
Well, let’s start with what exactly is relationship marketing?
To be very literal, relationship marketing is an all-encompassing term that personifies any effort to build long-term relationships with customers, rather than push for one-time sales. This strategy typically includes affiliate, influencer, referral, and partner marketing campaigns. Here’s a high-level breakdown of what each has to offer:
Referral Marketing
Exactly what it sounds like — a strategy for encouraging passionate customers and advocates to directly refer their network to your business. Studies show that customers not only seek referrals, they act on them. Referral marketing takes the inherent organic and altruistic nature of referrals and gives brands the tools to incentivize and manage them at scale.
Influencer Marketing
In many ways influencer marketing is a modern take on traditional affiliate marketing. Instead of a network of smaller affiliates driving traffic, however, influencer marketing targets specific people who have large, captive followings. Today, someone with a million Instagram followers wields an incredible amount of power to drive interest in a product, and many brands are seeing big results by incentivizing those influencers to talk about their products or services. In most cases, marketers manage influencer marketing manually — handpicking target influencers, reaching out to them individually, and tracking the program through spreadsheets and email. There are some software programs designed to manage this process, but they aren’t usually flexible to handle anything other than influencers.
Affiliate Marketing
A transaction between a company and an entity where the business receives customers (or leads) in exchange for a financial incentive. It’s highly efficient because brands specify the cost for a specific action being driven. Examples of effective affiliate incentives include $X per lead (or app download) or Y% of a purchase. Both Netflix and Amazon leverage this strategy well. The challenge with affiliate marketing is that brand recognition has a big impact on success. Attracting “affiliates” is an arduous process and you often have to compete for “space” on a blog. This can sometimes lead to a bidding war, which lowers your margins.
Tips for Relationship Marketing Success
So, how can your brand use these campaigns in a cohesive way to build a trusting relationship with your audience?
1. Don’t overlook your customers
At first glance, many marketers cite big-name bloggers, celebrity co-signs, incentive motivated promoters, and influencer shoutouts as relationship marketing examples. Believe it or not, there are members of your existing customer base with social followings and networks that can rival the reach of bloggers that might be unfamiliar with your product or service. From a strategic perspective, user-to-user referrals push relationship marketing programs along more quickly and organically than hit-or-miss blanket outreach.
2. Be transparent
It’s up to brands to be transparent with customers about what they will get in return for referring others to the brand. Customers should also know what their referred friends will receive, if anything. When it comes to incentives, you can’t be too clear about the details. You earn the trust of your customers by establishing clear guidelines and following through on them, and this trust and satisfaction is integral to the overall wellness of your program.
3. Automate Manual Processes
The time, money, and resources required to wrangle your customers into a streamlined program — or multiple campaigns — becomes much more manageable when you can perform tasks with the click of a button. If your current system requires spreadsheets and business cards then, chances are, you aren’t experiencing the full benefits of an automated relationship marketing program. The analytical capabilities of automated programs are a major draw for companies that want to promote transparency between the brand and its army of ambassadors.
Scaling Your Relationship Marketing in 2018
At their core, all of these relationship marketing sources and lead acquisition channels can be tracked, monitored, and managed in practically the same way. Sure, affiliates certainly require different treatment than customers, and the incentives that resonate with each will vary. Similarly, influencers will obviously be evaluated against different metrics than advocates, and they’ll cost a lot more to engage.
Still, the ways in which all of those different parties are tracked and managed are congruent.
This is precisely why I’m so convinced that the future of our space is a single, flexible platform that delivers all the tools companies need to manage and optimize a variety of campaigns. This approach simplifies the entire process for marketers and, maybe most important, creates a much cleaner experience for customers, affiliates, and influencers.
