Relationship Marketing—Ways to Improve Client Relationships
Customer Relationship Management (CRM) is a hot topic right now, but Relationship Marketing may be more important for firms and their profits. How are you increasing your client's loyalty through your communications with them and your efforts to market new products and services to them?
OnPoint Marketing & Promotions, a national marketing firm, defines relationship marketing as "a system of data analysis and communications, that extracts information about a customer gathered during the history of the customer's relationship with the company, and uses this information to market to the customer in a way that promotes trust and loyalty."
The premise of relationship marketing seems simple, but how can firms affectively increase the loyalty of their clients through marketing initiatives? I believe there are 4 ways that can help firms improve client loyalty through relationship marketing:
- Diversify product and services lines
- Provide value in regular on-going communications
- Utilize a strong CRM system
- Consider client acquisition vs. client retention
Diversify Product and Services Lines
Through our Boomer Technology Circles™ we have discovered one of the best opportunities for the accounting industry to build client loyalty is by diversifying product and services lines. With additional services above the traditional, you will be able to win in the commoditized world and meet or exceed client expectations. Clients trust their firms and providing additional services is a natural progression in the relationship.
Many firms have increased client loyalty by providing technology services, financial planning, and training. Linda Steele, the Education Coordinator for Habif Arogeti & Wynne LLP (HA&W), in Atlanta, GA provides clients with training and education for HA&W services. They have found with proper training and education, clients are better able to utilize these services. This has built deep loyalty from their clients!
Provide Value in Communications
Hand-in-hand with the diversification of products, firms need to provide value in regular and on-going communications. Providing value above normal expectations goes a long way in building loyalty. Firms should schedule specific times to contact clients on occasions not necessarily involved with business. Don't go months on end without seeing how your clients are doing. A proactive call to "check-up" may lead to you helping them out of a quick jam or just a nice conversation about the kids. Either way, this communication will help develop the relationship that will make it hard for your competition to compete with!
With the client relationship in mind, make sure that you are always providing value to your clients through your marketing. One of the best ways to accomplish this is through a newsletter. Provide information that is relevant to the business of your clients. Do the research for them and use your newsletter as the vehicle to get that information to your clients. At Boomer Consulting, Inc., we use our newsletter for this purpose. We also keep our clients informed on what we can offer them, such as industry specific symposiums or our Boomer Advantage Guides™.
Utilize a Strong CRM System
Keeping accurate track of information, conversations, and anything else that pertains to clients is vitally important in relationship marketing. Thus, it is essential to utilize a strong CRM system. There are many choices for CRM systems. Do your homework and find one that will capture all of the information that you will need in building a strong relationship with your clients.
One of our Boomer Technology Circle™ firms tracks "fun notes" such as a client that loves homemade apple pie, but has said that his wife doesn't bake. Having tracked this, the firm surprised him with an apple pie on his birthday! He was completely surprised and grateful. He was so impressed that they took note of such a simple thing. That simple reminder made all the difference and he will probably be a life-long client. Not only that, but he refers business to them often. Only by truly utilizing their CRM system were they able to have his birthday automatically scheduled with the idea of the pie. Great use of relationship marketing!
Consider Client Acquisition vs. Client Retention
Take a moment to think about client acquisition costs vs. client retention costs. This will vary from firm to firm, but it is not a stretch to say that retaining a client costs far less in both time and money than acquiring a new one. Understand that your current clients have a certain lifetime value and special consideration should be taken to keep them.
I would argue that you should spend as much, if not more, on retaining great clients and building on that current relationship. Many firms get bogged down by "how many" clients they have rather than "how strong are the relationships" they have built. Think of it in the simple terms that for every client you lose, you need to acquire two. You have to replace the lost client and gain one more to grow. It is much more cost efficient to work on keeping your current client and gaining new clients above that.
Conclusion
On paper, relationship marketing is very simple and straight forward. In business, there is much more to consider. Firms that fail to build true client loyalty through relationships will fall into the trap of the commoditized world where clients firms are interchangeable. When firms fully understand the importance of relationship marketing with their clients, they will see retention rates and profits increase! Focus on the four areas above and your firm will be off to a great start in building lasting relationships and client loyalty.