When it comes to marketing, the words “relationship” and “marketing” often don’t belong in the same sentence. The traditional approach to marketing is to use advertising, email campaigns, and social media to reach potential customers. However, this approach may not be the best fit for every business. In particular, a lot of businesses might benefit from using relationship marketing instead.
The Difference Between Traditional and Relationship Marketing
Let’s start by defining the terms “traditional” and “relationship” marketing.
Traditional marketing is when a business reaches out to potential customers through advertisements in newspapers, on billboards, and on websites. This type of marketing is often called out-of-home (OOH) marketing because it typically takes place outside of a business’ physical store. OOH marketing makes up the majority of traditional marketing. It is usually used to promote a business or product and is done with the intent to attract potential customers.
Relationship marketing is when a business forms an affiliation or partnership with another business, organization, or individual in order to gain access to a market segment that they couldn’t afford to reach on their own. A business that is using relationship marketing might partner with a manufacturer to gain access to a group of customers that wouldn’t buy from the manufacturer directly.
Often, businesses that utilize relationship marketing struggle with limited resources and lack of funding. In these cases, they will turn to micro-lending platforms like Kabbage to raise capital to grow their business. The businesses that utilize Kabbage’s micro-lending services gain access to investments and marketing that can help them grow their business. Ultimately, this form of marketing can be very effective when executed correctly. It allows a business to target a limited number of people who fit a particular need or want and allows them to continue to grow their business despite their limited resources.
The Advantages Of Relationship Marketing
There are a few key advantages to using relationship marketing in your business.
One, and perhaps the biggest advantage, is that it allows you to target a specific audience who has a shared interest with your business. In other words, you can only connect with people who are already considering buying your product or service. This is a clear advantage when compared to the average “cold-calling” approach to marketing, where you would reach out to random individuals and hope that they are interested in your product. Relationship marketing ensures that you are reaching out to people who want what you have to offer.
Additionally, the people you are reaching out to already know or at least have a familiarity with your product. This familiarity makes it easier for them to trust you as a business partner and to continue to do business with you. Put simply, when you are reaching out to past or existing customers, you are more likely to establish a good relationship with them and gain their trust. This in turn makes it much easier for you to market to them as a brand or business that they know and trust.
Finally, relationships between businesses can sometimes lead to mutually beneficial agreements where both sides gain something from the relationship. For example, a business that is utilizing relationship marketing with a manufacturer can sometimes negotiate discounts or special pricing for their products. This form of mutually beneficial relationship can be extremely beneficial to both parties and establish trust between them.
The Disadvantages Of Relationship Marketing
While there are clear advantages to using relationship marketing in your business, there are also some serious disadvantages. One of the biggest is that it can be very time-consuming. Establishing and maintaining a good relationship with customers can take a lot of time. It also takes a lot of effort to gain and maintain trust with customers. Finally, in some cases, the results of using relationship marketing aren’t always clearly defined and can be hard to measure. This makes it more difficult to determine if the time and effort spent on building the relationship was actually worth it.
All of this being said, building a strong foundation of trust with customers is crucial and something that every business should be working on. In some instances, it might not be easy or obvious how to do this. However, by continually demonstrating that you are trying to do good business despite any setbacks, you can show your customers that although this was initially a business relationship, you truly want to be partners with them moving forward.
Ultimately, every business is different and some might fit better in one category than another. That being said, the key takeaway from this article is that there are certainly cases where relationship marketing can be very effective and might even be the best option for a business. However, you need to be sure that you are doing it right before you commit to this type of marketing strategy.