If you have heard of relationship marketing, you may be wondering how it works and why it is so important. You have a great product, many contacts and are making some sales, so why would you need to learn about relationship marketing? These are all reasonable questions that you can learn about right here!

History

Relationship marketing is not a new concept. It was developed in the 70’s and 80’s as a way of keeping customers coming back for more. In those days, it was more on the level of one on one personal attention instead of the vast impersonal internet. But, there is a place for it even here. Look at it as an old concept with a new application.

Goal

The goal of relationship marketing is to get and retain customers. The more often a customer purchases from you the less it has cost you to market to them. For example, if you spent $10 dollars to market to a person that resulted in a sale with a five-dollar profit, you are still short on cost versus sale. However, as that same customer returns repeatedly this ratio will gradually change until you have little invested and are still receiving profits.

Further benefits of customer retention are:
• Free word of mouth advertising, when people are happy with your products and service they will tell others about you leading to new customers without the cost of marketing to them.
• You create brand loyalty, which makes it much harder for the competition to sneak in and snag a piece of the market share.
• Happy content customers are willing to spend more in order to work with you. The overall satisfaction will make them leery of newcomers even if the price is lower.
• Employee’s jobs are much easier when working with satisfied customers, this makes them happy which the customers benefit from even more and then return that happiness back to the employee. A never-ending circle of love and joy!

Practice

Internet marketers may have to work a little harder and a whole lot smarter to apply relationship marketing, but it can be done. Taking the time to figure out who, what, when and why will help you tremendously. Find out:
• Who- are the potential customers?
• What- do they need or want?
• When- will they need this product or service?
• Why- what problem are you solving for them?

When you have mastered the art of relationship marketing, you will snowball your profits and potentially gain more and more clients as the word begins to spread virally.

Conclusion

The internet can seem like a great place to make money and retain anonymity, however, you will never make much like that. You have to sell who you are and what you stand for in order to achieve customer retention. You cannot sit behind your computer all day looking to increase profits and never get to know your clients. It will never work that way and soon your business will go bust.