Effective Customer Relationship Marketing

Customer Relationship Marketing is all the marketing you do in order to retain a customer. In almost every business there is value in the customer that can be earned over time that far exceeds the value of the initial transaction.

The key to retaining a customer is marketing to them to create a relationship. Even in businesses where you would believe that an ongoing relationship isn’t that profitable such as real estate saes it still makes sense to build up customer relationships.

There are 5 ways that customer relationships marketing can be monetised beyond the first sale. I know that not all of them will obviously apply but if you can use one of them odds are relationship marketing will pay off in spades.

  1. Repeat Purchase of your basic product service
  2. Cross Selling your other products and services
  3. Referrals of new clients to you
  4. Joint Ventures or Other businesses promoting to your customers
  5. Increasing the Sale Price of your Business

Relationship marketing is foundation that leads to all of these opportunities. At its heart relationship marketing is about assembling a database of high value customers (to your business) and building a sustainable long term relationship with them so database continues to grow in size and  value to you and your business.

Harry S. Dent Forecast in ‘The Great Depression Ahead’ that businesses are being forced to align themselves around the customers they serve rather than the products they sell. So say you are florist, in Dent’s view of the world you will move from being ‘just a florist’ to selling many different things to your customer base around what they need want and desire, not just flowers.

Take the people who buy flowers as part of a romantic evening. They need all sorts of other things – chocolates, Champaign, I bet you could bundle a gift voucher in with the local high end restaurant into a gift pack… And so on. Oh wait I didn’t even come up with the idea check out www.1800flowers.com Flowers by occasion and they have a network of related sites selling other parts of the customers ‘overall need.’

Although I bet it does all 5 things to monetise its customer relaitonships www.1800flowers.com nicely uses it customer relationship marketing to stimulate repeat purchases and cross sells to existing  customer list.