30 Days "Take Action" Program - Day 12

Relationship Marketing - Getting to Know Your Customer

For want of a better explanation – and one that continues for about three sentences – relationship marketing is putting the “CUSTOM” back in customer. After all more than business partners they are customers. A simple idea, but seemingly relatively radical in most marketing circles these days.

Mostly the focus appears to be on attracting customers rather than training and supporting them so you keep them (also called “offensive marketing”). Granted things are beginning to change slowly, but this easy to use approach to retention is well worth not only checking out, but also actually implementing. Not to mention the fact it can make you money.

This form of marketing – just to give you a short history lesson – evolved from direct response marketing in the 1960’s, emerging in the 80’s to become a system that places emphasis on building longer term relationship customers rather than on individual (or single) transactions.

The backbone of this marketing philosophy is, understanding people’s needs as they go through what is called their “life cycle”. Put another way, offering a range of products/services, as people actually need them.

Focus = Profit

Why would focusing on your existing people be more profitable? Easy, if you’re constantly spending money and resources to land new team members, your profitability suffers. You aren’t trying to build a loyal base of people who stay with you time and time again – you’re flying by the seat of your pants. This is called “churn”, the people who won’t come back to you.

Another term for attempting to retain people and increase their loyalty is also called “defensive marketing”. Those who have already made a statement of loyalty by opening their wallets are your key to continued profitability and long term residual income. In slightly more technical terms, it’s really the creation of new and mutual value between a supplier and individual customer.

So, what about this “lifecycle”? You can also view this customer lifetime value as in long-term asset. And what do you do with assets? You value them and treat them accordingly. You keep them – your customer assets – happy so they wind up being loyal.

And loyalty is worth money to your business, since the cost of keeping an existing customer is only about 10 per cent of the cost of getting a new one. Lesson is? Pay attention to your present customers. How?

The Who, What, Why and How of The Customer ‘Lifecycle’!

The “how” can usually be broken down into a five stage development cycle. Not everyone is the same when they come to you for a product, service or opportunity. They all come needing something specifically for THEM. So, if you’re marketing online, your first task is start communication and build repartee with people. This may be done in many ways, such as email, instant messaging, community forums, blogging and websites.

Your main objective during this time frame is to show them what you have to offer and getting them to your website. That takes work. Once they’re there, you want to get their e-mail address by giving something away right on the spot. With what we do we give them instant access to our team training and support through the Yahoo group.

The second thing you need to do is provide meaningful information and credibility. Provide useful, quality information – that will often translate into program registrations. Got people registering? THIS is the beginning of your relationship – NOT the end. This is where you start your long-term love affair with your customer and offer value added extras to their commitment to participate.

For instance, show them how to get the best value and usage out of their purchase(s). This is called reinforcement. It sets you apart from the madding crowd (your competition). This step, more than any other, will ensure you word-of-mouth referrals (team building) and retention of people.

Last, and not least, is the advocacy stage of the cycle. Simply put, it means you provide your customers with the tools or feeling of being in a “community” – of being a valued member of that community. That turns them into your biggest promoters – and voila – new team builders.

In Follow Our Lead we made some decisions about our web site and how we utilize it to attract people. This is web-based relationship marketing, it comes in two flavours: open content and premium content. Open content means your visitors can access everything on your site.

Premium content access is limited to people who have registered their e-mail address or have bought something. In our case we offer both. We have open content for visitors to view and we have premium content for those that register through the Taking Action form and register in the Yahoo group.

No Money, No Risk!

A bit more on how to succeed with web-based relationship marketing. Remember first and foremost, now that you have come this far, that you are marketing person to person – not as a business to a person. The distinction makes all the difference in the world, as people will actually open your e-mails and read them as opposed to hitting the delete key because they’re sick of reading “junk solicitation mail.”

This approach does not take a lot of money nor does it involve a huge risk. It’s simply human-to-human communication – creating bonds with your existing customers, and generating referrals (new customers).

Once you have a person as a customer doesn’t it make sense to keep your existing customers? Increase your loyal customer base? If you answered yes to these two questions, then relationship marketing is definitely for you.

Learn what others are doing – the more information you have, the better. Just remember to keep your main focus on using the tools available to achieve loyal relationships with new and existing customers.