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The Tasks of Database-Marketing:

What is a relationship with the customer?

Before we can talk about "building a relationship" - we first of all should agree upon a common understanding of a "relationship". As a relationship we define:

an interaction between two parties (who perceive each other as being relevant) with the goal that both sides benefit from this interaction  

The important words in our definition are:

  • "interaction between two parties"
    which makes sure we do not have a "one-way" dialogue but a real interaction from both sides, that means: also the customer should feel the need for activity
  • "relevance"
    which tells us that it will be imposible to build a relationship if only one side perceives the other as not being relevant and finally:
  • "both sides benefit from this interaction"
    there should be a clear value for both sides to decide to participate in the relationship. So it should not be only the business but also the customer who should be able to gain some additional benefit which otherwise would be hard/impossible to achieve.

You may have noticed that within the definition we did not only concentrate on a business/customer relationship, but also include prospects and even non-customers (since somewhen you might be able to convert non-customers into buyers).

So why would you want to build a relationship?

It is a common mistake for even professional marketers to be too focused on getting new customers into the businesses portfolio, but neglecting to keep the existing ones. This is what we call the "revolving-door effect" - while trying to pull new customers through the door, the existing customers walk away. And all this although it seems to be a common knowledge that on the average it is about 6-8 times more expensive to gain new customers than selling to the current portfolio.
So businesses have to invent methods to make customers stay longer in the portfolio or at least stay in the customer's (or prospect's) mind. So that if this person is ready for the buying decision he will think of your business in the first place. And one approach is to establish a relationship which makes it harder for the person to leave since he can obtain additional benefits if he decides to stay, or build such strong positive attitude towards the product that emotions will keep the person from switching.

The vehicles to build or grow such a relationship are manyfold:

  • "thank-you" letter
    telling your customer that you appreciate that he bought your products is definitely the cheapest method (but still one of the most effective ways) to establish a relationship and will certainly help to reinforce the buying decision.
  • birthday cards
    celebrate with your customers, but make sure that you have accurate data!
  • gifts
    certainly the most widely used way of staying in the customer's mind
  • reminders to rebuy
    many researches on customers who left a portfolio have shown that they often complain about not having received enough attention from the business. A simple reminder to rebuy the corporation's products can help to prevent them from leaving (and increase sales as well!).
  • card of business anniversaries
    let the customer celebrate with you - why not tell the customer about special days on your side?
  • information on related products/services
    with the goal to extend the customer's lifetime value by cross-selling related products
  • newsletters, magazines, booklets
    which prospects or even only customers/"members" receive - keep the people informed about what is going on at your side. Since you can directly target people interested in your products/services this will be cheaper than spreading the information in advertisement
  • loyalty cards
    critical for this appraoch is that it may overemphasize the rebate feature too much
  • clubs
    certainly a highly sophisticated way of relationship-marketing, although certainly requires special management skills to obtain a distinct positioning from the other ten-thousands of clubs out there

Your advertising agency certainly can recommend the proper mix for your business but you should always consider that relationship costs money and you will only want to spend if you can expect an additional profit.

Envolvement - the key to success?

The key issue for a relationship is simple - just use any opportunity for a contact with the customer. And if you currently do not have such a chance, then you may start to invent such events:

  • events during the year
    St. Valentine's Day, Mother's Day, Father's Day, Easter, summer closing sale, winter closing sale, ... This list can be extended massively.
  • product lifetime events
    if your product/service has a clear lifetime (or at least you may evaluate such a lifetime) then you may use events around its life - start of product (introduction letter), end of product, several months before/after end of product's life
  • lifetime events of the customer
    birthday, marriage, birth of a child, new appartment/house, passed exam of driving license, ...

Usually you will tie your product around these events (maybe even extended with some special features) and try to point out the usability/strength of it for this particular event. By doing so you generate:

  • a consequent presence in the customers mind and
  • create a different perception of your product (not only will it be perceived as a solution for the specific task that the customer initially bought the product for, but from a more wholistic point of view - as a flexible, multi-purpose product)

and this way your chances of being chosen again will increase dramatically.

Or you may want to choose a completely different approach and go the "professionalist" way:
consequently provide additional information about the usage or professional implementation of your product, preferably from other real-life customers. You may even offer pre-built solutions for special cases. By making your customer as firm as possible with the usage or handling of your product, it will become increasingly difficult to change to a product from a competitor.

For example consider the software industry: many companies have absolutely no copyright problem with copying their software as long as it is definitely for private usage only. The idea behind this is to make the user get used to the software so that whenever he gets involved into a buying decision this person will be a lot more likely to vote for that product which he had already been using successfully.

For building a relationship there is only one clear target:

=> Make Your Customers Feel They Are Part Of The "Family" And
That You Truely Care About Them And Their Problems!

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