What are benefits of the relationship marketing?
So, why we need to build and retain trustful and long term relationship with clients? The reason is that relationship marketing will create customer loyalty and will secure life time of customer. Besides, any parties involved in the business process will some way enjoy benefit from this marketing approach.
Some of the benefits of relationship marketing for company include:
- Loyal customers will get more clients for you by referring your services or products to their friends and family and colleagues – this effect is VALUABLE. Because people trust the opinions of friends and family more than any form of advertising. If you get a customer to like your brand enough to refer it to others, you have just recruited a marketer more effective than anyone on your staff – and you don’t even have to pay him – it’s word-of-mouth. Then more revenue is generated for you and on the other hand you will save much cost for advertising activities.
- Loyal customers will repeat transaction with you and even are willing to try your new products or expand existing service with you. Then you will have chance to retain and increase your revenue with existing customers. Furthermore, with existing clients you will save much cost for selling products to new customers or setting up your service to new customers. According to business authors Emmett C. Murphy and Mark A. Murphy, acquiring a new customer can cost five times as much as retaining an existing customer. Thus, you will save a huge cost if you successfully retain your exist customers.
- Loyal customers can provide positive feedback quite often which enables you to find opportunities for improving your product and services or even support innovation by finding out your gaps or disadvantages in the market. As for internal point of view, the advantages of customer relationship marketing is that it focus to identify the customers who are more likely to be of higher value or to be of long term account to a company and eliminate the customer who are too costly to maintain relationships with, as well as opportunities for growing underdeveloped potential. This saves the company time and money in terms of its marketing cost and also reduces pressure put on employees to get new clients each year.
- If you can retain lot of your customers long, the pressure to acquire new customers will reduce, your organization will have more time and effort to put on innovating your products and services, improving your customer service, product’s and service’s quality.
- Loyal customers will not abandon you to find new partners, they will not give your competitors an opportunity to increase market share and boost revenue from services to them. Besides, loyal clients will share with you any information about the market, about your competitors or any information that relates or benefits to you. Also, customer will not have to spend time and effort on looking for new vendors/suppliers or running on test of new products and services before they fully meet their requirements and expectation.