“Relationship marketing is marketing seen as relationships, networks and interaction” – (Gummesson 1936)
For a relationship to exist two-way communications are required. Both parties play the role of sender and receiver. Integrated Marketing Communications aims to remove any noise that may interfere with the signal/message. Once a relationship is established it can multiply into a network of messages and signals which is a hugely powerful marketing notion.
Relationship Marketing is the move from the traditional short-term transaction based focus on the consumer to a long-term relationship focus. However, for a long time now many organisations have still ‘focussed on customer acquisition rather than customer retention.’
One of the key reasons for building and maintaining relationships is to ascertain loyalty from the consumer. With so many brands competing in the marketplace consumers are easily swayed by price, service, quality, brand image/identity, advertising mediums or innovation.
The objective of relationship management is to create customer loyalty to one brand and have competitive advantage within the marketplace. “From a turnover perspective, it is accepted that both turnover and prices are positively impacted by customer retention”. MBNA American Bank found that a reduction by 5% in customer losses leads to an increase of profits of 60% over the following five years.
However, companies regularly lose customers; it is more expensive to gain new customers than maintain current ones. Customer loyalty is built over time. It is based on favourable customer experiences, trust, and allegiance. Understanding the customer can allow marketers to tailor loyalty programs that reward the right customers and drive up profits take for example Tesco reward cards.
As previously mentioned relationships require two way communications where the consumer responds to the supplier’s message and provides feedback. The challenge therefore for the modern marketer is how to nuture relationships when primary communications are becoming more and more digitised?
The Role of the Website
The role of business activity and technology has grown hand-in-hand. New technology has enabled businesses to transmit information in new and innovative ways. Because the internet has grown so rapidly, strategies for integrating the internet into business activity must be flexible.
Coupey, 2005, states that the word ‘Internet’ is a contraction of the words International and Network; it is simply a means of communication between consumers, companies and millions of other organisations.
Websites are portals that consumers can access 24/7 and communicate with businesses. They can shop, research, browse and contact at free will. To some extent the communications process is one way as the consumer decides upon where they click, however there are certain techniques that web developers UX designers can adopt to persuade consumers to click throughout the site, guiding them through the user journey.
The website also acts as a tool for loyalty programmes when data is collected through statistic monitors on consumer behaviour patterns. Digital marketers can access all sorts of data such as how many hits per day, what pages, what search terms used, what type of consumers, what interests and even location of access point. All these stats build consumer profiles which will inherently affect the design and layout of the site, which emails he or she receives or what offers he or she receives etc.
E-CRM (Electronic Client Relationships) represents a shift from employees taking care of customers directly allowing customers to use self-service tools that make them an active part of the buying and servicing process.
This shift has allowed marketers to be more creative in the way they communicate with clients and other business. Technology such as social media, third party review sites, virtual reality, smart tv, voice control, onsite pop-ups, online conferencing, eMail data capture and automation, display advertising, video streaming, self-service dashboards and much more has made the ‘website’ a powerful and interactive tool for users.
“E-marketing is not about building a website, but building a web business, harmonising the power of customers” (Siegel 2000).
Mori Technology Tracker has been tracking internet usage since 1997, current figures state that quarter on quarter increases in mobile usage for people accessing the internet is now at 76%, closer to the number of those accessing at home (81%). This is due partly to the decrease in cost of technology and the rise in disposable income but also because as businesses have adopted the internet as a marketing tool, consumers also require the same technology to research products remotely, find alternative brands and even purchase online without having to deal with a sales advisor.
% HOW PEOPLE CONNECT TO THE INTERNET
Source: Tech Tracker Report 2017
To some extent, the effectiveness of a website is a result of function, content, form, organisation and interaction. It’s a circular process that is based upon client profiling. As previously discussed data is collected and consumer profiles are made. Data is affected by design and design is affected by data. It is very rare that the first update of a website will be the last. Websites are there to evolve with consumer feedback so that the information can be easier to access, maintains retention so that the consumer doesn’t click away, enjoys a better online user experience and eventually helps them buy from the site.
A Forrester survey of 8600 US consumers showed that web users believe four main factors encourage them to return to a site (Which has direct impact on web conversion):
- High quality content
- Ease of use
- Quick to download
- Updated Frequently
But a website is only useful if a consumer can find it. “Creating a website is not your ticket to success. You are competing against 100million other pages of content”. You have to make your website visible to search engines before they make it visible to consumers.
So, to summarise
The shift of digital communications has meant consumers are more demanding and require more information than ever before online. However, this search for greater knowledge is also matched by an expectancy of great a ‘user experience’. It is far more cost-effective to retain customers than acquire new ones and websites act as a gateway to engage and nurture relationships online at all stages of the sales funnel.
We typically find with many clients that although Google Analytics can identify the ‘what’ is happening on your website we, as marketers, often miss the ‘why’ users behave in certain ways. To understand this further part of our process is to undertake user testing to really drill down into analysing web user journeys and understanding how your website can help build two-way relationships with your customers.