Why relationship marketing is vital to customer retention

At a time when many businesses have moved online, building strong and trusting relationships has never been more important. Customers don’t just want to be sold to; they want to be valued. 

This is where the power of relationship marketing comes in.

What is relationship marketing?

Unlike transactional marketing that focuses on hard-sell, relationship marketing revolves around the need to maintain client relationships. The focus shifts from acquiring new customers to retaining old clients by keeping them engaged and happy.

It can be as easy as being more interactive with clients over social media and setting up referral programs; the key is facilitating engagement and fostering loyalty. Other simple ways you could incorporate relationship marketing into your strategy include:

  • Posting giveaways on social media
  • Hosting events for customers to attend
  • Giving bonuses to long-term customers
  • Running crowdsourced testing programs for new products
  • Creating brand advocacy programs for word-of-mouth referrals 

As a long-term strategy, relationship marketing can be used across your business but is particularly important to customer service. Whether your team is running inbound customer services or outbound, relationship marketing will make sure customers feel valued—not just sold to.

Instead of just relying on marketing automation, you should always try to find ways to engage with customers on a personal level. Still unconvinced? We’ve compiled a list of the top seven reasons why relationship marketing is vital to customer retention.

1. Sets you apart from the competition

While your competitors are out there focusing on individual sales, you can start building a loyal customer tribe. Since you’ll be marketing based on their needs and preferences, customers are more likely to be attracted to your offering and feel like you really value them.

Responding to their messages and comments on social media, setting up regular giveaways, and responding to feedback will go a long way in building trust and building relationships, giving you a competitive edge over other businesses.

If it comes down to a choice between two brands, and a customer has a positive relationship with one of them, it’s likely to win out. Relationship marketing is a great way to ensure you’re a customer’s first choice.

2. Delivers a better customer experience

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Relationship marketing will ensure your team provides a personalized and meaningful experience to customers wherever they are in their customer journey. It’s important to view marketing and customer service as related—sales and service go hand in hand.

Instead of focusing on sales during calls or in newsletters, focus on developing meaningful connections with your customers through curated content and friendly interactions. Seek to improve your existing systems and ways of handling customer queries and interactions, particularly your customer service agents who handle calls.

It could be useful to consider how your call center could help improve the overall experience, for instance, by asking questions around call queuing—what is call queuing and what is its role in your call center? You should also look into your overall social media presence, and whether you could be more responsive to your customers.

3. Leads to free marketing and business

Since there are so many options to choose from, the business that stands out will be the one that delivers an exceptional experience from the moment a customer browses products to the moment they make a purchase.

Incorporating relationship marketing into your strategy will ensure you’re there for your clients every step of their customer journey, answering any questions they have and always being attentive.

Customers who have a great experience are likely to refer their friends. While relationship marketing focuses on existing clients, referrals can lead to new customers being acquired, too, so it’s a win-win.

4. Fosters trust and loyalty

It may seem like a no-brainer, but the more time you spend getting to know and interact with your customers, the more likely you are to build trust and loyalty. Customers want to be valued and will always pick the business that puts them first over those who focus on the hard-sell.

One of your top priorities as a business should be to avoid customer churn. Since relationship marketing focuses on current clients, your churn rate will greatly decrease. You’ll be interacting and engaging with consumers on a regular basis, fostering trust and loyalty which will make them more likely to continue buying your products.

5. Encourages customers to share feedback

Building rapport and trust is at the heart of relationship marketing, and loyal customers will be more likely to offer feedback. Always make sure there’s a line of communication open if they want to contact you and be ready to respond promptly. Ensure these communications run smoothly by equipping your team with the tools they need to make calls and respond to queries properly, using the best customer support software to support them.

It’s not enough to hear this feedback though—the key is to act on it, as this will show customers you’re taking their needs seriously and value them.

6. Delivers high ROI

Since relationship marketing is a long-term strategy, it will help fuel your business consistently. The subsequent low churn rates and increased customer retention will lead to a higher ROI, since loyal customers will keep coming back to your products and services.

There’s even a direct correlation between customer retention and ROI—a 5% increase in customer retention can increase your overall profitability by 75%. That’s pretty impressive! Combine that with the new customers brought in through positive reviews, and you’ve got a great strategy for boosting ROI.

7. Builds a better understanding of your consumers

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Since relationship marketing is all about interacting and engaging with customers, you’ll start to learn a lot more about their needs and desires. You’ll learn what kinds of things make them tick, what content they prefer, and what mode of communication they tend to use most (social media, email, or phone).

Armed with this knowledge you can then go on to create even better products and content, curating it to suit their specific needs and desires. This type of highly targeted marketing will show customers that you understand them and cherish them, taking into account their queries and wants.


It’s clear that relationship marketing plays a big role in customer retention: building trust and rapport will create a loyal group of consumers dedicated to your products. Being attentive to your customers’ needs and queries should remain your priority in relationship marketing.

At the heart of relationship marketing lies your team and their ability to collaborate and work efficiently so don’t forget about them! Make sure you have the best project management software in place so everyone knows what to work on and how they can build rapport with clients. Consider building it into your company ethics and dedicate training sessions to the importance of relationship marketing—this will show you’re a brand that puts customers first.

Cover Image: Vignesh Rajan