What Is Relationship Marketing And Why It Matters In Business

Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.

Understanding relationship marketing

Relationship marketing starts with a business understanding their client base. Who are they and what do they buy? What are their values and long term needs?

Like any successful relationship, it is important that businesses use demographic and buying behavior data to understand their customers on a meaningful level.

In the context of relationship marketing, understanding customers means gaining clarity on the nature of their repeat business. Why do certain customers return again and again?

Most businesses assume it is the quality of their products. Yet the real reason may be that their store is the closest to a customer’s home. Alternatively, their business may simply stock a range of products that can’t be found anywhere else. 

Whatever the reason, it will vary from person to person. As a result, businesses should segment their audience based on these reasons to develop an effective marketing strategy for each.

For example, a customer who enjoys the usefulness of a product is different from one who buys from a business because of their philanthropy. Each must be marketed in different ways so that the relationship is maintained and strengthened over time.

Examples of relationship marketing

Swedish furniture maker IKEA has a large, global, and very loyal audience. But after changes to the font used in their brochure drew widespread criticism, the company became fearful of alienating their customer base.

Consequently, they immediately returned to using the old font.

Manufacturer of popular ADHD drug Vyvanse went above and beyond for their customers by creating an online portal for families suffering with ADHD.

The portal features a discussion forum with videos and articles from industry experts.

From a marketing perspective, the portal allows Vyvanse’s loyal customers to interact with each other and form a long-term relationship with the brand.

In perhaps a more visible commitment to long term relationships, ArmorSuit offers a life-time warranty on all of their smartphone screen protectors.

While this may not be the most lucrative deal for the company, ArmorSuit does strengthen their customer relationships and get people interested in other products which don’t carry lifetime warranties.

The importance of relationship marketing

The acquisition of new customers for any business can be costly and time-consuming. In some cases, acquiring a new customer costs a business five times more than retaining an old one.

Furthermore, customers who are familiar with a brand spend more money. Research by Bain & Company found that an increase of just 5% in customer retention ability increased company revenue by 25-95%.

When businesses strive to create authentic relationships with their customer base, they can focus their marketing efforts on where it matters most.

Authentic relationships that are paired with quality goods and services get customers talking about a brand with their friends and family. In effect, marketing budgets are decreased since loyal customers promote the business for free. 

Expanding Your Business Opportunities with Relationship Marketing

For you to know how to grow your business with relationship marketing, you need first to understand or re-educate yourself on what relationship marketing is about.

Simply put, relationship marketing is a strategy that focuses on building long-term relationships with your customers that will, in turn, bring about a triple effect.

The effects include keeping you in business for a long time, increasing your sales and profit margin, and marketing your products through word of mouth for free.

An off-shoot of the triple effects is that relationship marketing fosters trust, and loyalty, two key elements you’ll need to expand your business opportunities.

After all, if your original product and services are not trusted, and you lack a loyal customer base, expansion, would be a bad idea.

Relationship marketing is also that brand of marketing that creates an emotional connection between your customers, and product, and it is far more effective than traditional means of marketing.

How Relationship Marketing Expands Your Business Opportunities

Having the above in mind, the question becomes, what are the ways relationship marketing can help you expand your business opportunities?

Note that the latter does not necessarily mean going into a business, or creating a product other than the one you are known for.

It covers branching out into a new market with the same product. For example, if your products get designed with a certain age demographic, or locality, relationship marketing lets you know when your business is ripe to move beyond where you are, which brings us to our first point.

Provides Information on What People Need

Every business is tailored towards finding a need and meeting it.

Whether you sell insurance, produce beauty products, or you are in the hospitality business, the bottom line is you are following the economic principle that human wants are insatiable. 

In times past, people go into business and expansion without knowing if those they are producing for need their product.

The information was not available because they relied on the traditional means of marketing

However, things have changed, and relationship marketing, lets you know what people are interested in buying. It enables you to understand what’s sellable, what consumers are talking about. It’s the secret to the success of prominent corporations, and how Apple knows that its customers would buy its new iPhone, and when best to release it.

It Makes Available, Useable and Credible Feedbacks

Getting and using feedback is one of the bedrocks of most successful businesses. In business expansion, you need feedback, which is one thing that relationship marketing gives you. 

Feedback lets you know a lot of things; it’s how you get to find out what people need, and are willing to pay money for.

Never underestimate the power of positive feedback. With it, you know the ripe business opportunities, and when and how to key into it.

If for instance, your business is not doing as well as it should, relationship marketing would give you an insight into the reason.

And what more you can do to complement and make it better. Sometimes, it’s not about breaking into a new market, but improving what you already have.

Gives You Insight on the State of the Market

Business opportunities abound, but a person without insight might miss them.

But don’t fret, because with relationship marketing, you will have tons of ideas on the state of the market, and the business to invest in, that guarantee you a return on your investment.

The insight will also let you know the sustainable business plan to follow. What to do to ensure your expansion is in and for the right market.

It equally provides you with workable data that does not only cover the readiness of the market, but the people.

It Gives You Insight on Customer Expectations

Firstly, needs and expectations are two different things; both are important. While needs cover products and services, expectations deal with the delivery.

Bringing it down to how it expands your business opportunities; insight into customers’ expectations lets you know what’s lacking in terms of delivery, and how you can capitalize on it.

Think about brands, like DHL, that offer courier services; they capitalized on relationship marketing to know that not all companies can deliver their products.

Also, they understood that people expected the existence of a company whose sole purpose is to deliver goods around the world and they get it.

What Else Can Relationship Marketing Do for You?

The knowledge gotten from relationship marketing is endless, with infinite opportunities.

However, in addition to the four mentioned above, here are some other ways relationship marketing contributes to business expansion opportunities:

  • It gives you an in-depth knowledge of the target market, and audience.
  • It gives you an understanding of the core values of the target market.
  • It brings to light people in a different locality who wish they had your product. Referrals, which is one of the advantages of relationship marketing, will deliver this to you.

In conclusion, there are some things you’ll never know without the right information.

When Jeff Bezos started Amazon, all he wanted was to create a platform for people to buy books with ease, but with relationship marketing, he branched out into delivering online services for different products.

Relationship marketing has recorded more testimonies and started more businesses than any other form of marketing, so capitalize on it, and use it to expand your business opportunities.

Key takeaways:

  • Relationship marketing seeks to foster customer loyalty, interaction, and engagement with exemplary products and services.
  • Customers have different reasons for entering into long term relationships with brands. Therefore, marketing departments must develop strategies that speak to each customer individually.
  • Relationship marketing is a cost-effective marketing strategy since existing customers cost less to retain and spend more money over the long term.

Key Highlights:

  • Definition of Relationship Marketing: Relationship marketing focuses on building long-term, meaningful relationships between businesses and their customers. It emphasizes customer loyalty and engagement through the delivery of high-quality products and services.
  • Understanding Customers: Relationship marketing begins with understanding the customer base, including demographics, buying behaviors, values, and long-term needs. This understanding enables businesses to create personalized marketing strategies.
  • Segmentation: Businesses should segment their audience based on the reasons why customers return, as these reasons vary from person to person. Tailored marketing strategies are then developed for each segment.
  • Examples of Relationship Marketing:
    • IKEA: Maintained customer loyalty by reverting to the old font in response to customer criticism.
    • Vyvanse: Created an online portal to support families dealing with ADHD, fostering a long-term relationship with customers.
    • ArmorSuit: Offers a lifetime warranty on smartphone screen protectors to strengthen customer relationships and encourage interest in other products.
  • Importance of Relationship Marketing:
    • Customer retention is cost-effective, as acquiring new customers can be more expensive.
    • Research shows that increasing customer retention by a small percentage can significantly boost revenue.
    • Authentic relationships with customers lead to word-of-mouth marketing, reducing the need for extensive advertising budgets.
  • Expanding Business Opportunities with Relationship Marketing:
    • Relationship marketing provides insights into customer needs and market conditions.
    • It offers credible feedback for improving products and services.
    • It gives insights into the state of the market and the right business opportunities.
    • Understanding customer expectations can lead to innovative service offerings.
  • Additional Benefits of Relationship Marketing:
    • Provides in-depth knowledge of the target market and audience.
    • Understands the core values of the target market.
    • Reveals potential customers in different localities through referrals.

Visual Marketing Glossary

Account-Based Marketing

Account-based marketing (ABM) is a strategy where the marketing and sales departments come together to create personalized buying experiences for high-value accounts. Account-based marketing is a business-to-business (B2B) approach in which marketing and sales teams work together to target high-value accounts and turn them into customers.


Ad Ops – also known as Digital Ad Operations – refers to systems and processes that support digital advertisements’ delivery and management. The concept describes any process that helps a marketing team manage, run, or optimize ad campaigns, making them an integrating part of the business operations.

AARRR Funnel

Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.

Affinity Marketing

Affinity marketing involves a partnership between two or more businesses to sell more products. Note that this is a mutually beneficial arrangement where one brand can extend its reach and enhance its credibility in association with the other.

Ambush Marketing

As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.

Affiliate Marketing

Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.

Bullseye Framework

The bullseye framework is a simple method that enables you to prioritize the marketing channels that will make your company gain traction. The main logic of the bullseye framework is to find the marketing channels that work and prioritize them.

Brand Building

Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.

Brand Dilution

According to inbound marketing platform HubSpot, brand dilution occurs “when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.” Brand dilution, therefore, occurs when a brand decreases in value after the company releases a product that does not align with its vision, mission, or skillset. 

Brand Essence Wheel

The brand essence wheel is a templated approach businesses can use to better understand their brand. The brand essence wheel has obvious implications for external brand strategy. However, it is equally important in simplifying brand strategy for employees without a strong marketing background. Although many variations of the brand essence wheel exist, a comprehensive wheel incorporates information from five categories: attributes, benefits, values, personality, brand essence.

Brand Equity

The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.

Brand Positioning

Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.

Business Storytelling

Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.

Content Marketing

Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.

Customer Lifetime Value

One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.

Customer Segmentation

Customer segmentation is a marketing method that divides the customers in sub-groups, that share similar characteristics. Thus, product, marketing and engineering teams can center the strategy from go-to-market to product development and communication around each sub-group. Customer segments can be broken down is several ways, such as demographics, geography, psychographics and more.

Developer Marketing

Developer marketing encompasses tactics designed to grow awareness and adopt software tools, solutions, and SaaS platforms. Developer marketing has become the standard among software companies with a platform component, where developers can build applications on top of the core software or open software. Therefore, engaging developer communities has become a key element of marketing for many digital businesses.

Digital Marketing Channels

A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.

Field Marketing

Field marketing is a general term that encompasses face-to-face marketing activities carried out in the field. These activities may include street promotions, conferences, sales, and various forms of experiential marketing. Field marketing, therefore, refers to any marketing activity that is performed in the field.

Funnel Marketing

interaction with a brand until they become a paid customer and beyond. Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898. Funnel marketing typically considers three stages of a non-linear marketing funnel. These are top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Particular marketing strategies at each stage are adapted to the level of familiarity the consumer has with a brand.

Go-To-Market Strategy

A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.


The term “greenwashing” was first coined by environmentalist Jay Westerveld in 1986 at a time when most consumers received their news from television, radio, and print media. Some companies took advantage of limited public access to information by portraying themselves as environmental stewards – even when their actions proved otherwise. Greenwashing is a deceptive marketing practice where a company makes unsubstantiated claims about an environmentally-friendly product or service.

Grassroots Marketing

Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience.

Growth Marketing

Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.

Guerrilla Marketing

Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.

Hunger Marketing

Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.

Integrated Communication

Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.

Inbound Marketing

Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.

Integrated Marketing

Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.

Marketing Mix

The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.

Marketing Myopia

Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail.

Marketing Personas

Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.

Meme Marketing

Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s.


Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior.

Multi-Channel Marketing

Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.

Multi-Level Marketing

Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.

Net Promoter Score

The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.


Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data. Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.


Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.

Niche Marketing

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.

Push vs. Pull Marketing

We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand.

Real-Time Marketing

Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.

Relationship Marketing

Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.

Reverse Marketing

Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.


Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.

Sensory Marketing

Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.

Services Marketing

Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.

Sustainable Marketing

Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.

Word-of-Mouth Marketing

Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.

360 Marketing

360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.

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