Relationship marketing involves the use of “direct response” campaigns that emphasize customer retention and satisfaction. This type of marketing strategy creates a bond with the customer through narrow market targeting, tailors offers to their customers, and usually demands a response that can be tracked by the marketing team. This typically requires an email address so that the company can contact the individual directly for exclusive offers, maintenance follow-ups, and unconverted leads. Relationship marketing is about the long-term value of a loyal customer and the connection that can be built beyond typical ads and generic sales promotions.
- Allows companies to tailor taste profits based on the customer’s preferences, activities, etc.
- Focuses on customer satisfaction
- Increased customer retention by enriching the purchasing experience
- Brand loyalty becomes more commonplace
- Referrals come from loyal customers
- Cost of acquisition is steep at the beginning in both time and money
- Slow-moving marketing platform that requires patience as referrals build
- Networking, not everyone’s forte, is a central piece in developing business relationships
Lead generation, however, focuses on the sales lead side through newsletter sign-ups, marketing referrals, events, etc. This is a key part of the purchase funnel method and is associated with pipeline marketing. It’s less personal than relationship marketing, but very effective in gaining new potential customers. Lead generation usually requires an opt-in of some type. Examples include landing pages, online surveys, and brand specific opportunities. Like relationship marketing, lead generation requires an email address to convert leads into customers.
- Build a list quickly
- Ensures that your clients and customers want to be there (opt-in)
- If combined with a sales funnel, this method can run itself via newsletter drip campaigns after the initial set up
- A relationship isn’t really built until they “opt-in” to something you offer
- High turnover rate
- If done poorly or in a sleazy manner, this can destroy your reputation (Don’t offer something you’re not willing to follow up on!)
Both relationship marketing and lead generation have their strengths and weaknesses, but the best marketing strategy involves a combination of the two. Ensure that you track the results for each style so that you can adjust your strategies as needed to ensure a long-term quality experience for both you and your customers.
The team here at The Social Media Advisor prides itself on developing their business through relationship marketing but also comprehends the value of lead generation and prospecting. A healthy balance of both can be extremely valuable for any small business. Want to find out more? Contact me to book a discovery call to find out how we can help you #BeAwesome with your marketing strategy.