What is Relationship Marketing?

Investing into the customers is an investment towards greater retention and long-term revenue. While relationship marketing might be more time-consuming, as it involves building rapport, the extra effort pays off. In this article, we will discuss the definition of relationship marketing, some relationship marketing strategies and how you can use relationship marketing for your business. 

what is relationship marketing

Relationship Marketing


To start off, the benefits of relationship marketing are priceless. 

Return on Investment

Promising statistics back up how much better it is financially to retain customers rather than acquire new ones. 

In an article published by the Harvard Business School, Frederick F. Reichheld and Phil Schefter stated “increasing customer retention rates by 5% increases profits by 25% to 95%.” 

Additionally, it is much easier to generate sales with existing clients. Compared to the 5% to 20% acquisition probability of a prospect, chances of converting an existing customer is as high as 60% to 70%. 

The increase in probability can be explained by how returning customers would already be invested into the company. If they are buying the same products or services, then it can be inferred that they found a certain value in it. 

With this established trust, the same consumer base is also more likely to expand their consumption of the company’s other products. Not only is it profitable to appeal to returning customers, but it is also more time efficient.  

Customer Satisfaction  

91% of customers who are unsatisfied with their service or product do not return back to the company. A combination of customer relations and relationship marketing acts as a form of accountability to improve their experiences. That way, purchasers invest more time and energy into the company and leave more content. 

One way or another, because individual customer satisfaction is always prioritized, buyers become self-inclined advocates of the brand, at no extra cost. 

Through different mediums, clients talk highly about the company’s products. 

One common way consumers express their appreciations is through online reviews. Whether it’s a star rating or a written testimonial, their feedback can be appealing to prospects. Such consistent positivity reassures new customers to participate in the business’s services. If the company is solely an e-commerce, or involves digital sales, this trustworthiness can make or break an acquisition of a new sale. 

Customer satisfaction expands outside of online public reviews though. In day-to-day interactions, enthusiastic consumers share by word-of-mouth. By naturally and organically promoting a product to family and friends, those prospects have someone’s personal vouch as another incentive to consider a certain business’s products. 

Emotional Connection 

In a Forbes article, BDA CEO Jay Deutsh claims the most important perks of relationship marketing are emotion. One-on-one relationships, between the customer and company, allows for marketing to hone in on the potential for an emotional connection. 

His business accredits branded merchandise as not only a branding awareness tool but also a one-on-one relationship marketing tool. Deutsh elaborates with examples of companies like Nike. 

While some customers use their products for practicality purposes, Nike’s popularity is also due to their messaging. Consumers buy their merchandise because of their belief in the lifestyle that their branding symbolizes.  

relationship marketing

Relationship Marketing Definition 

Relationship marketing is defined as a sales approach to retaining customers. It involves planning, implementing, and revising marketing campaigns that specialize in long-term customer loyalty. 

Relationship Marketing versus CRM

Oftentimes, relationship marketing is mixed up with customer relationship management (CRM) because both of them focused on the relationships between the company and customer. 

CRM focuses on maintaining, sustaining and improving customer experiences. Customer relations prioritizes the planning and improving of customer service. However, there is still a distinction between customer relations and customer service, as the latter are the actual activities involved in providing a quality experience. 

Relationship marketing is described as a subsection of CRM. However, as mentioned earlier, it involves more of the sales and marketing application. 

Relationship Marketing versus Traditional Marketing 

Traditionally, marketing prioritized generating individual sales. A sales funnel was used to outline the stages of converting prospects into committed customers. 

  • ToFu: At the top of the funnel, prospects are essentially strangers. The business’s goal is to increase their branding awareness so potential customers learn about their services.  
  • MoFu: The middle of the funnel can look different differ based on the business offerings, but conceptually, it’s similar across the board. Engage with the prospects’ growing interest so that they become more invested. Guide them to consider and evaluate the company’s products. 
  • BoFu: At last, the business successfully earned a sale. Prospects transform from strangers to first-time purchasers. They finalized their decision to solidify an order with the company.  

As digital marketing emerged, companies nowadays moved towards life cycle stages. While it’s similar to the sales funnel, the stages are formatted through the consumer’s angle. 

In understanding the phases through the buyer’s perspective, businesses can better structure their marketing campaigns to account for their needs. 

The life cycle stages are awareness, interest, decision, and action. The sales funnel overlaps with these stages, however, the biggest distinction lies in the last life cycle stage, which is post-purchase. 


In the first stage, prospects hear about the company’s products for the very first time. Perhaps they saw a commercial ad or a billboard, or a well-thought out post on Instagram and Facebook. Potentially, a co-worker or classmate was talking about it during lunch one day. Either way, the prospects leave with an impression of the business’s services. 


Following awareness comes the  interest stage. The consumer develops their awareness by following the business’s social media page or clicking through one of their ads the next time it pops up. They start asking questions and poking around the website. 


As the consumer invests more time into the business, they ultimately have to draw a conclusion on the worthiness of the business’s products. Does the business offer value? Should I pursue that value at this specific company? At the decision stage, the potential buyer might also start cross-comparing how similar businesses create and market their product. 


Now, the customer must decide whether or not to lock in a purchase. They can decide to buy the product elsewhere, or, alternatively commit to the company! Similar to the sales funnel, the prospect formally became a customer.  


In the post-purchase stage, the customer potentially goes through the decision and action phases again, as they must decide whether or not they want to return to the same company to use their products once more.

This is the most relevant and crucial stage regarding relationship marketing because you can implement strategies to hone in on customer retention.

relationship marketing strategy

Relationship Marketing Strategy

Personalized Customer-Focused Service 

One of the best ways to customize customers’ experiences is by prioritizing their specific needs. By meeting them where they are at, the understanding and support forms a unique intimacy between the business and customer. 

Appeal to Emotion 


As iterated earlier, companies, such as Nike and Adidas, use relationship marketing to build their branding in a way where when customers use their products, they feel connected through a belief.


Beyond formalized testimonials and star-ratings, company-earned awards and satisfaction guaranteed policies help cultivate a sense of trust so that customers return knowing they’ll get consistent results. 


Show off the people behind the company! A popular way to market personality is through company social media pages. Foster a sense of friendly community with branding that reflects  the people. 

Tailored Audience Engagement  

In the name of meeting customers where they are at, companies quite literally have to first find where the customers are at. Based on target demographics, certain media tools will work better. 

For example, social media platforms – such as Instagram, Twitter, and Snapchat – tailors more to younger audiences. If the aim is to sustain relationships with those consumers, then the marketing should happen within there, to capture their attention.

relationship marketing example

Anticipate Client Needs

From media to sales department feedback, customer’s future behavior can be anticipated based on previous trends. If there is a lack of data to build off on, then interview customers directly about their concerns and worries in relation to the service. To have feedback before their purchases helps narrow down how the marketing can be framed to address them. In other words, analytics can be used to objectively create marketing campaigns that aim to anticipate client needs. 

Incentives and Rewards for Loyalty 

Curated incentives and rewards serve as encouragement for customers to come back. When a buyer makes their purchase, offer a point reward system: with each new item they buy, they receive points that can be cashed out or used on other products.

For a more personal touch, implement special birthday, holiday, or celebration offers through direct mail.  

Draw them in to signing up for an email newsletter for time-sensitive, exclusive deals and discounts. Additionally, email newsletters can be a tool for relevant links, resources, suggestions, and content. 

Content versus Advertising 

In addition to the value that comes in a product, approaching ads from a content marketing angle, rather than a sales pitch angle, provides more value to returning customers. Because they would be already somewhat invested into the company, new flashy iterations of sales pitches won’t incentivize a higher level of commitment. 

On the other hand, content marketing structures content to produce a similar value as a company’s products. If done properly, it can create brand awareness, reinforces credibility, and fosters trustworthiness, which ultimately strengthens the customer’s relationship with the business. 

Feedback System 

Because it takes two to tango in any two-way relationship, implementing a feedback system can ensure accountability on the company’s end. For example, a survey leaves room for an open and welcoming conversation on their consumer experiences. 

Consistency is key here though. You should use feedback as a frame of reference, to adapt to the customer’s concerns and thoughts. 

relationship marketing defiintion

FAQs about Relationship Marketing:

  • What is an example of relationship marketing?
  • What do you mean by relationship marketing?
  • How can I implement relationship marketing?
  • What are the benefits to relationship marketing?
  • What is the difference between relationship marketing and CRM?

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