Here’s Why Your Definition of Relationship Marketing Could be Wrong
Guest Contributor: Elaine Gamble, Relationship Marketing Consultant, Evangelist, and Subject Matter Expert
If you ask a room of marketers “What is relationship marketing?”, most will have a different response. While there is a consensus that we want the customer to “like and trust us”, there is no exactness on what relationship marketing actually entails. However, without a core definition, organizations will struggle to implement relationship marketing effectively – it’s like taking a ride in the car but having no clear “destination.”
Organizations often define relationship marketing by its enablers, or what types of tools are used for its implementation. In an earlier time, this was database marketing, and more recently digital marketing is often used synonymously with relationship marketing – this is a huge mistake.
In this customer first era, we have an exciting opportunity to ground ourselves in a pure definition of relationship marketing and use this as a foundation for executing effectively, in a manner that is most meaningful and enduring for our customers. I propose a definition and guiding principles from my years of experience in this discipline, my knowledge of what drives business impact, as well some earlier thinking on this topic that is quite relevant today.
As we formally define relationship marketing, let’s first consider the dictionary definition of a relationship: “A relationship is a way in which people feel or behave toward one other, a friendship, or state of being connected emotionally.”
Building on this, Relationship Marketing, in a nutshell, is:*
A business strategy that maximizes the value of products and profitably boosts retention via 1:1 communication, customer preferences, two-way engagement and collaboration with your customers, bringing new value over time in a manner that is meaningful to them; its primary focus is existing high-value audiences.
Relationship Marketing is Hard. Why?
Relationship Marketing is not about selling – it is about collaborating; this perceived “altruism” in approach is a culture shift for most companies who may believe a relationship is about constantly saying why their product is better than another. When implemented with excellence, relationship marketing involves bringing value in ways that may not be directly product feature related. Its focus is customers that already love you and you are taking their love to a new level – they no longer need to be sold.
– Most organizations do not trust their customers. Because Relationship Marketing is not about pure selling, it involves taking a perceived leap of faith and trusting your customers – “if I don’t focus on product features multiple times, will I still get the sale?” (the answer is yes, you will!)
– The popularity of digital marketing has made it easier and more cost-effective than ever for organizations to expand their reach beyond the most attractive targets and/or increase communication frequency and type beyond ideal for a target group.
– It is usually much easier operationally to focus solely on sending out communication (push) without a focus on two-way (complementing push with pull); push may be easier and cheaper to execute.
– Collaborating with customers requires a heavy focus on operational excellence (databases, systems, etc.), which is a meaningful investment for most organizations.
– An organization may not have a solid measurement framework for relationship marketing or lack of alignment internally on how success is defined. Therefore, relationship marketing may be executed, in some form, without clarity on what you seek to achieve at the outset or in a manner that deviates from its core definition.
Additionally, organizations may start out with the assumption that all products have the same potential for relationship marketing success; however, not every product is equally well suited for a relationship marketing approach. Alignment on which of your products are ideal candidates should be part of planning discussions.
Current State of Relationship Marketing
What Relationship Marketing is not:
– Email blast
– Mobile campaigns
– Social media/facebook page
The problem with these and why they are not considered relationship marketing:
– They are enablers of relationship marketing, used as part of its execution but a tactic itself is not a definition
– Communication is typically one-way, not collaborative and/or two-way
– They are often executed to a list, (where we pull the trigger vs. implementing based on a collaborative discussion with your customer or preferences).
– These may be executed as one-offs, in isolation of one another, not as part of an integrated relationship marketing ecosystem that maximizes customer/business impact.
The Six Pillars of Relationship Marketing
Is this what relationship marketing has been in your organization? If so, you are not alone.
Relationship marketing excellence involves six defined pillars, the core ingredients that determine whether your initiative is true “relationship marketing” or a just group of multiple tactics. Those relationship marketing pillars are:
1. Customer Engagement: Communication is two-way: communication with your customer and demonstrating you listening, as well as driving ongoing, sustained interest in a next interaction.
2. Customer Experience: The how, not just the what; excellence in how a product or service is provided; differentiating your product in service-related areas, not just product features.
3. Segmentation: Segmenting customers based on preferences and executing against this in a real-time manner.
4. Customization: One-to-one customer communication that is tailored to his/her preferences, where he/she feels understood
5. Permission-Based Relationships/Opt-In: Requesting opt-in and/or leveraging an opt-in/permission-based relationship; inspiring trust/confidence from the customer that granting their permission for your marketing will deliver greater value to them.
6. Community: Fostering a sense of community among your customers; the customer perceives he/she is part of a larger, special and elite group that endorses your product/service.
Stay tuned for upcoming posts, when we will explore each of these pillars in more detail and why they are crucial for Relationship Marketing success.
Elaine Gamble is a global healthcare marketing leader with more than 15 years of relationship marketing and customer engagement experience. A proven visionary, innovator, and thought leader, she has held positions with leading healthcare companies in relationship marketing and customer engagement. Elaine’s contributions have been in enabling companies to market more effectively to an existing customer base, deepening loyalty, and driving profitability. She has worked with teams in the US, as well as teams in Asia and Europe. Elaine is a consultant to organizations in customer relationship marketing strategy and design.
Elaine received her bachelor’s degree in psychobiology from Oberlin College and a Masters in Business Administration from Northwestern University’s Kellogg School of Management. She is co-chair of the Association of National Advertisers (ANA) Relationship Marketing Committee, as well as a judge for the ANA’s Reggie Awards. Additionally, Elaine serves on the Parent Leadership Committee at Amherst College, is a past member of the Parents Committee at Princeton University, and is past Chair, Alumni Engagement, for Oberlin College NY Alumni.
*Developed with some adaptation (definition and guiding principles) from Relationship Marketing: New Strategies, Techniques, and Technologies to Win the Customers You Want and Keep Them Forever, by Ian Gordon; publisher John Wiley and Sons, 1998