Relationship Marketing & PPC

Pay-per-click strategy tends to focus on direct sales and transactional marketing techniques. An advertiser bids a certain amount, achieves a CTR of X, and sells X number of goods and services.

Let’s take a look at another strategy, relationship marketing, and how it can be rolled into your PPC and web strategy.

What Is Relationship Marketing?

Relationship marketing is the process of building customer retention and satisfaction by leveraging the existing contact you have with customers. It is a strategy based around the long-term value of repeat customers, as opposed to a strategy whereby you constantly seek to get in front of new customers.

The benefits are obvious.

It’s easier to sell to someone who already trusts you to deliver, and it’s cheaper to talk to them than it is to talk to new customers. You don’t need to spend much time educating these customers, as they are already familiar with you, and what your provide. The occasional email offer might be all that is required to get ongoing sales.

Relationship marketing is suited to competitive business environments where businesses sell a variety of goods/services, have repeat periodic demand, or businesses that want to build an audience/subscriber base.

Why Is Relationship Marketing important?

Relationship marketing is a powerful way to build value, for both the customer and the merchant.

Let’s say you periodically use home services, such as gardening services. Initially, you hire a person to mow your lawns, which the provider undertakes diligently.

Because there is a relationship established, it is reasonably easy for the lawn mowing service to offer the customer a range of related, personalized services – such as yard clearing, tree pruning, and other home maintenance – because the trust/familiarity relationship is already established.

The gardening service supplier knows your layout, and has a good idea of what needs to be done in future. He can plan and tailor a customized service for you, at little extra marketing cost. This is good for you, the customer, too, because it means you don’t have to go hunting and screening suppliers to carry out each task. The value of the service is increased, because the relationship adds value.

All from one marketing spend.

Relationship marketing can also be seen as a defensive form of marketing. i.e. holding on to the customers you already have.

In mature, competitive environments, other businesses are trying to gain customers, typically at the expense of their competitors. If you build in relationship value, then it is difficult for clients to switch away from you, without losing value.

Industry studies have shown that to attract a new customer costs five times what it does to retain an existing one. It is therefore worth taking time away from tweaking PPC minutiae focused on acquiring new customers, and spend some time looking at the overall strategy, and how you can keep those customers you already have.

How To Integrate Relationship Marketing

The integration of relationship marketing happens at your strategy stage. Use PPC to gather new prospects, then ensure that you back-end customer acquisition with a means to enhance three key areas:

• Customer Qualification
• Customer Satisfaction
• Customer Retention

In many areas a 3% conversion rate is fairly strong, which means that there is little to no value delivered by the other 97% of the traffic. Rather than trying to make the sale off a cold search click, you can offer something free of value they can download in exchange for their information. A quick guide, a cheat sheet, an autoresponder series, etc. Build trust and then make the sale. Give people multiple paths to convert.

In terms of customer satisfaction, pay close attention to what makes people happy. Consider under-promising and over-delivering, personalization, and on-going discounts for repeat business. There is software available that you can use to track customer habits, likes and dislikes. Look for any opportunities where you can develop one-on-one marketing.

For example, Amazon and other online retailers use sales history as a means to personalize their offerings to repeat customers. The value to both parties is increased, as Amazon is more likely to be in tune with a customers preferences than another book retailer who knows little or nothing about them.

Look to retain customers by providing them value they don’t get elsewhere. Again, consider loyalty discounts, customization and personalization, and other customer-centric services. Customers do change suppliers, often out of boredom as opposed to any deficiency on the part of the supplier, so try to keep your offering fresh and updated.

One simple way to provide both satisfaction and retention is to enhance your communication channels. Encourage your customers to talk to you. Answer emails promptly, use a blog/RSS/forums and any other channels you customers use. People like to be heard, and will often volunteer a lot of information if simply given the opportunity to do so.

Once the conversation starts, much value can emerge.