Relationship marketing and the dilemma of low CLV

Relationship Marketing it is a profitable investment. A study by Bain & Company found that just a five percent increase in customer retention can increase a company's revenue from 25% to as much as 95%! Regular customers buy more often and spend more than new customers. Why? They have recognized the value you offer them and they loyally invest in your brand. And what can you invest in to keep them coming back to you? There can be only one answer – relationship marketing. Use the tips to help you choose a good strategy.

Relationship marketing is a strategy that aims to foster customer loyalty. It's about interacting and building long-term commitment. How to create strong ties with customers? First of all, by providing them with information directly tailored to their needs and interests. How? Focusing on open communication. CLV informs you how well you interact with your audience. The customer's average life value indicator, i.e. the total value that he generates for the company throughout the duration of the relationship with it. CLV indicator it will also show you how much your customers like your products or services. It will also give you a picture of what you do well - and also what you can improve.

Relationship Marketing Tools

Consider customer relationship marketing as a strategy and customer relationship management as an activity. Where to start? All it takes is five simple steps. They will help you not only in building lasting relationships with your customers. They will also allow you to smoothly go through the process of increasing the CLV ratio. 

Calculation of the indicator CLV

There are many different methods of calculating the CLV ratio. Most of them are based, among others, on on information about: 

- the average order value, i.e. the amount that the customer spends on average on a single purchase,

- the average repeatability of transactions, i.e. the average number of purchases made by the customer in a specific period of time,

- the length of the retention time, i.e. the period in which the customer once acquired continues to use the company's offer.

Sounds complicated? So how do you fight for relationship marketing? Nobody says that you have to do the CLV yourself. There are many business owners, managers, and marketing and sales managers who outsource this. For many reasons. For example, in the crowds of classes, they do not have additional time that could be spent on making precise calculations. They then turn to a trusted business partner. Professional PR agency takes care of the entire process. It will present not only the results, but also solutions that are worth implementing. We know this from our own experience.

Relationship marketing versus the sales funnel

Customers in the era of the Internet, social media and a million news items a day are not easy. They are bombarded from everywhere with an excess of stimuli and information noise. As the research conducted by ARC Rynek i Opinia for REDLINK shows, the data are alarming. Until 32% of Poles finds 11 to 20 offers a day in its inbox! And every tenth person more than 20. What is the conclusion? How you communicate with your client shouldn't be overwhelming. Usually, pushiness does not go hand in hand with loyalty. 

Analysis of customer acquisition channels from individual sources

Do you know what the click-through rates of your communication channels show? It is worth taking care of them. Valuable content is the key to keeping your audience interested. An important part of relationship marketing. On the one hand, the optimization of activities and verification of the effects will increase the engagement and conversion rate. On the other hand, it will also extend the retention period. 

Relationship marketing and the development of the competences of the sales department

So what if most companies declare that they understand the mechanisms of building a long-term relationship with the client. In practice, many of them are failing to do the most essential thing. It does not develop the competences of employees who are personally responsible for these activities. Who are in the front line when it comes to relationship marketing. Effect? Triple painful. No commitment. Losing customers. No income. 

Testing the effectiveness of undertaken activities 

It is not a good idea to research various methods of customer retention and verify the results. It is a must! Example? As part of relationship marketing, you introduce a loyalty program. The results of a study by Forrester Research Paper showed that the average loyalty program participant spends on average 13% more than the average consumer. On average. It doesn't mean that it will be the same for you. It can be worse. Or better. But to know it, you have to measure it.

In conclusion, please note that: - By building relationships with customers, you increase your competitive advantage. You reduce your marketing and advertising costs. You open your business to new opportunities- summarizes Bartosz Zieliński, an expert from Commplace. Even when you're targeting an entire audience or customer base, you're still talking to one specific person at a time. It starts here relationship marketing. Contact us to get started right from the start.