The Circle Of Marketing— Relationship Building.

The final strategy in the circle of marketing is relationship building. This is how you can build relationships with your customer that can last years.

“on average, you have a 60 percent to 70 percent chance of doing business again with a current customer, a 20 percent to 40 percent chance with a former customer, but only a 5 percent to 10 percent chance of ever doing business with a non-customer.”
—Steven Yanovsky

This is where most business owners don’t understand the reach of marketing. Do you also spend most of your advertising dollars on new customers when that is the least cost-effective form of advertising?

A study by Bain and company found that “a 5% increase in customer retention improves profitability by 25% —100%, especially where customers have ongoing purchasing relationships.”

This study confirms that the most profitable untapped marketing opportunity at your hand is focusing on your current customers. This article should help you to begin to market more effectively to your current customers. And when it is in combination with all the other strategies in the circle of marketing you will begin to see the power marketing can have.

Hint: use their loyalty and knowledge of you to grow your business.

Currently you have two main types of customers—transactional customers and relational customers. For this discussion we will discard the transactional customer because they shop on price and they are not loyal customers. But relational customers are those customers who keep coming back to you time and again. They value the relationship (quality service, attention to details, personal conversations and the extras like remembering their name) more than the price. Most of the time your customer won’t admit this but their actions show this to be true.

Relational Customers Build Profitability
The first question you want to ask yourself is “How can I encourage my current customers to shop more from me?” To answer that question you’ll want to find out why they shop with you in the first place.

How have you been strengthening your relationship with your relational customers? Relational customers want you to build a relation with them. To do that you will need to remember the first strategies of the circle of marketing.

1) Hiring,
2) Employee Training,
3) Customer Experience Management,
4) Internal Marketing Strategies,
5) Advertising/Direct Marketing
6) Relationship Building.

Each of these strategies are developed to build confidence in you as a reliable business in your customers minds. When have you successfully fulfilled the promises your marketing plan or advertising makes you begin to lower the buying risk your customers feel.

To strengthen the relationship you need to provide content. Useful content that is consistent with your brand promise. Here are a few suggestions to strengthen your relationship with your relational customers.
1. Spend time and money training your staff to be experts on the products and services you offer. And train them how to communicate more affectively with each other and your customers.
2. Create and give out useful how to guides.
3. Make “Did You Know” fliers that are relevant to each service you provide.
4. Post FAQ’s (frequently asked questions) and Q & A sheets for your customers.
5. Develop a web site that answers all of the questions your customers are asking. Don’t give them what you want to tell them! Give them what they want from you.
6. Instead of placing your ads in piece that goes to everyone in town gather the emails of your customers and send a version of that ad to them for free and test which bring in the better customers for the most cost affective price.

Items such as these help you answer the questions your customers are asking. When they feel that you are listening to them they will come to you more readily. And the more they come to you the more chances you have to increase sales.

Roy H. Williams said it best in his book The Wizard of Ads, “Any investment in sales training is an investment in your gross profits. The only thing more expensive than hiring a sales trainer is not hiring one.”