(This article was originally published on entrepreneur.com. It has been edited for content and style.)
Brand equity, loyalty or affinity are really just terms used interchangeably to describe trust. While all brands strive to build trust with their customers, trust is earned and not given.
According to a recent survey by Edelman, 88% of respondents stated that trust was an important factor in buying decisions, one percentage point less than the financial value of the products.
To build trust with customers, brands need to demonstrate value as well as foster interpersonal relationships with their customers. That’s why business owners need to prioritize relationship marketing strategies that focus on retention as much as acquisition, and I’ll demonstrate how.
What is relationship marketing and what are the benefits?
Relationship marketing is a strategy designed to build strong relationships that foster greater brand trust over time.
Relationship marketing may differ from most traditional push marketing strategies that prioritize one-time sales and customer acquisition. However, most marketers today prioritize relationship marketing as an integral component of both customer acquisition and retention, as it saves them costs and boosts profits over time.
While the old rule of thumb that acquiring customers costs five times more than retaining them may not be entirely correct, research has demonstrated that a 5% increase in customer retention could compound to a 25% in profits over time.
The traditional Pareto Principle asserts that most of your revenue tends to come from a small minority of customers who are most loyal to your brand.
Fostering loyal relationships not only increases sales from a single customer–free of additional advertising costs, but also leads to additional opportunities, such as increased word-of-mouth advertising and upselling opportunities.
Nevertheless, the data clearly shows that customers demand greater trust from brands, which is why relationship marketing should be considered as part of any push or pull marketing strategy.
Overall, relationship marketing provides a multitude of benefits, including:
- Greater brand loyalty
- Higher word-of-mouth advertising
- Greater customer trust
- Up- and cross-selling opportunities
- Higher customer lifetime value
- More efficient marketing
Of course, if you want to do relationship marketing right, you need to know how to influence and win over your customers.
5 ways to improve relationship marketing
1. Build your buyer persona
The first stage of any relationship is getting to know each other; this is no different for brands and customers.
Conduct detailed demographic and psychographic research to build a buyer persona of your ideal customer. For example, if you sell SaaS products, your ideal avatar might include people with a manager-level job title, a high salary or an occupation in a technical-related field.
I’ve found that tools like Meta’s Audience Insights and keyword research tools, such as Ahrefs, SEMrush and Google Keyword Planner, help me the most when building a customer avatar.
2. Cultivate a brand image
Understanding your customers is the first step toward fostering a healthy relationship. Now, you need to find ways to make your brand indispensable to their lives.
Cultivating a brand image is not entirely about meeting the demands of your customers through a valuable product; it’s also about forging an emotional impact with them. While many people don’t need dozens of pairs of Nike shoes or Gucci purses, these brands evoke an image essential to their customers’ personalities and lifestyles.
There are several ways brands can forge deep emotional impacts with their customers, such as:
- Interdependence: “I can’t live without ‘X’ makeup brand.”
- Nostalgia: “These shoes remind me of my childhood.”
- Loyalty: “I’m a Nike fan and won’t buy any other shoes.”
Projecting a global brand image relies on seamlessly cultivating a uniform brand image through your marketing and distribution process. Here are some tips to consider:
- Make products exclusive or high-priced to project luxury
- Use specific influencers aligned around your brand to promote its image
- Use content and storytelling to promote the brand’s mission statement (e.x. social responsibility or sustainability initiatives)
3. Find creative ways to engage customers
Every brand has a social media account and its own discount programs, but there are ways you can gain an edge using these creative ideas:
- Host local events or fundraisers for charity
- Sponsor local organizations that promote good causes
- Engage in the digital economy by offering redeemable online tokens or store points for purchases
- Employ blockchain for online purchases and across supply chains for greater security, transparency, and less risk of fraud or counterfeit
- Offer an exclusive store credit card or loyalty program with discount and coupon offers
- Invest in digital assets, such as virtual storefronts, NFTs or live events over Metaverse platforms
4. Perfect customer service
Most importantly, if you want to foster strong relationships, you need to improve one-on-one relationships with customers. Here are a few quick tips to improve your customer service:
- Never outsource customer service requests or use automated tellers
- Respond quickly to complaints over social media or review platforms
- Offer amicable solutions to bad reviews and experiences
- Employ chatbots on websites to assist customers
- Host forums for customers to ask questions about products or services (if applicable)
- Use tutorials to help customers solve problems without the aid of a person
- Offer consultation or installation services for physical tasks that are hard to solve over the phone
5. Be authentic
Finally, your brand needs to be authentic if you want to build trust with customers.
To be authentic, your brand needs to:
- Be transparent
- Understand your customers
- Appeal to their pain points
To promote these qualities, invest in brand storytelling that shows the actual people behind your company and showcases its mission. Market any social responsibility initiatives your brand is undertaking and do so tactfully.
Fostering relationships with customers is not hard, but it does require your brand to think outside the box. Gimmicky sales promotions and using the same old marketing strategies as everyone else will ensure your brand is nothing but forgettable in a sea of endless choices.