It’s no secret that loyalty is a powerful force, with studies revealing that 65% of a company’s business comes from existing customers.
But building a loyal customer base is no walk in the park. A 2021 global research survey shows that 81% of US consumers don’t trust social media advertisements. And to top it off, consumer demands are constantly evolving.
So in a world where social media dominates, how do you build trust with your customers? Although it sounds like you are fighting an uphill battle, the answer is more straightforward than you think.
Relationship-based marketing on social media is the way of the future. By focusing on building a relationship with your customers instead of enticing or cajoling with advertisements, your potential for long-term business success grows exponentially.
In this post, we’ll explore the basics of relationship marketing and how to leverage social media to build trust with your customers and turn them into brand advocates.
Let’s dive in.
What is Relationship Marketing?
Relationship marketing is a marketing strategy focusing on building long-term customer relationships. It requires listening to customers, responding to their needs, and delivering value.
The idea here is that a customer relationship is more valuable than the transaction — and it’s far more effective than traditional advertising in growing your business.
Relationship marketing focuses on your current customers, while transactional marketing focuses on generating new leads by funneling money into ads and other forms of content.
When a customer purchases from you, it is the perfect time to begin a relationship marketing strategy. The goal is to turn your customers into brand-loyal patrons of your business. Start by taking a personalized approach to client retention and integrate your brand into their lives in a way that feels natural and genuine.
Think email campaigns and relationship-based marketing on social media that offer exclusive discounts to loyal customers and in-person interactions like store events or product demonstrations.
An effective relationship marketing strategy involves interlocking strategies and technologies that help foster a more profound, long-term relationship with current and prospective customers.
For example, customer relationship management (CRM) software will sit in the inner circle of this relationship-based future. Why? A CRM helps you keep track of customer relationships and provides personalized approaches to satisfy your customer’s wants and needs. This streamlined approach can create a feeling of closeness with your brand.
Benefits of Relationship Marketing
While relationship marketing isn’t a new concept, there’s been a rapid shift away from transactional marketing. 71% of consumers now expect personalized marketing in some way, shape, or form.
Relationships don’t grow overnight. They are a two-way street that requires time and patience with both stakeholders to create a genuine bond that sticks.
But the investment is worth it, and here’s why.
Higher CLV and lower CAC
There’s a reason Kevin O’Leary, the infamous tough love Shark on CNBC’s Shark Tank, always asks companies about customer acquisition costs (CAC). It’s a vital indicator of company health. After all, he’s looking for a cash flow-heavy operation that can guarantee him a quick return on his investment.
As O’Leary explains, getting your customer acquisition costs below your lifetime value (future net profit from the relationship) is essential, or your business will never make enough money to survive. You’ll end up spending all your cash on advertising.
Relationship marketing increases customer lifetime value because it allows you to build a long-term relationship with your customers that are more likely to buy from you again in the future. For every seven percent increase in brand loyalty, the customer lifetime value of each customer can rise by 85%.
The more money you make from existing customers now, the less you’ll have to spend acquiring new customers in the future and reducing overall customer acquisition costs.
Reduced marketing spend
Because relationship marketing relies on building strong relationships with your customers, you don’t have to spend as much time and money on traditional advertising.
Instead, you can focus on fostering relationships and building brand advocates that’ll share the value of your product or service with family, friends, and colleagues for years to come.
Word-of-mouth marketing is more effective than any ad campaign and is consumers’ preferred method for learning about new brands, products, or services.
And since you’re not paying for traffic or impressions, you don’t have to worry about driving up costs by creating many ads that get no engagement.
Deliver a better customer experience
With access to a deeper understanding of your customers, you can provide them with products and services that meet their needs. And when those needs are met, they’re much more likely to stay loyal to your brand.
The result of relationship marketing is a win-win situation for both parties: customers get the experience they want, and you get more customers who love and trust what you offer.
Further, enhance the customer experience by researching the professionals in your niche. Find out what trends are resonating well in your industry and what things to avoid. You can find surefire tips and tricks by exploring social media pages, startup and SaaS marketing blogs, webinars, or in-person events.
Let your competition be the guinea pig. Piggyback off what works well for them, step it up a notch, and give your customers nothing but the best.
Social Media Implementation Strategies
At this point, it’s clear that the future of marketing is ad-free and relationship-based. So what does that mean for social media?
Well, thankfully, social media isn’t just a tool for advertising. It’s also the perfect medium for fostering solid relationships with your audience by creating relevant content and engaging with your followers.
Turn your social media channels into virtual communities where people can connect with like-minded individuals with similar interests and hobbies. The key here’s having meaningful conversations with your audience and not just promoting your products.
Take Tailor Brands, for example. Their Instagram feed is filled with engaging content encouraging interaction and dialog in the comments section about running your own business. This excellent implementation of a social media post will build relationships through community interactions.
Let’s take a closer look at some other social media implementation strategies to build long-term relationships with your customers.
Your community isn’t limited to the virtual world. Hosting live events is an excellent way to build strong, emotional connections with your customers and show them how much you appreciate them.
For the icing on the cake, you can use social media as a platform for these events — create an event page and promote it through other social media channels.
Invite your followers on Facebook, Twitter, Instagram, and LinkedIn. Use these platforms to engage your customers during the event. But don’t stop there — extend the conversation after it’s over.
Inbound, a marketing conference organized by HubSpot, encourages attendees to share photos and videos by creating a unique hashtag.
This social media sharing tactic builds a close community of loyal followers, helps create a buzz about their brand, and encourages others to attend future events. Don’t underestimate the power of user-generated content.
In 2021, Starbucks total net revenue reached $29 billion, making them the largest coffee company in the world. What is the key to their success?
It all comes down to their loyal followers. But how’d they establish this brand loyalty? Sure, their Pumpkin Spice Latte brings autumn lovers into their stores every fall, but their outstanding “Starbucks Rewards” loyalty program is the real answer.
Customers sign up for their loyalty program to earn stars with every purchase. As customers accumulate more stars, they’re eligible to earn free items such as drinks, food, and coffee mugs.
To help encourage people to sign up, they offer all members a free drink on their birthday. It’s a no-brainer.
To top it all off, Starbucks uses social media to share exclusive offers for their rewards program and additional ways to earn more stars towards free items such as “Star Days.”
By implementing these relationship marketing and social media strategies, Starbucks continues to:
- Grow a loyal customer base that consistently chooses them over competitors;
- Seamlessly integrate their business into the lives of their customers, and;
- Engages with customers through social media platforms they use daily.
Social media usage is rising, so brands are using two or more social media accounts to keep up with consumer demands and stay connected with their target audience.
Choosing the right social media platform is essential to building online relationships with your customers. You can use a combination of Facebook and Instagram, TikTok and Instagram, LinkedIn and Twitter, or any other channels your audience frequents.
For instance, suppose your company sells virtual private servers (VPS) in a B2B niche market. In this case, you’ll likely have better engagement rates on LinkedIn and Twitter than on Instagram and TikTok.
But you don’t want to count out these other platforms completely. To help you keep track of conversations across social media channels, consider using a social media management platform to keep an eye on brand mentions and engage with your customers.
With active listening, you can track conversations around keywords like “VDS” or “high-performance servers” to uncover trends across the web to better serve your customers. You can also learn how your customers perceive your brand in real-time and make the necessary adjustments to improve customer relationships.
Knowledge is power. With active listening, you can stay in sync with your customers by using sentiment analysis to watch online chatter about your brand.
Start Building Relationships with Your Customers Today
Consumers are tired of impersonal marketing and spammy ads. The shift from push-based advertising to pull-based relationships has begun.
Get personal with relationship-based marketing on social media to build a competitive advantage of loyal customers that’ll stick around for years to come.
How will you join the revolution in prioritizing your customers and building genuine relationships? Let us know in the comments below!