Relationship Marketing: What It Is and How to Do It Effectively

Illustration of two people shaking hands in an office

Ever heard the term relationship marketing before? If not, you just might be throwing a good chunk of your company’s hard-earned cash out the window. But fear not! We’re here to put them bills back in your pocket.

After reading this blog, you’ll have a deep understanding of what relationship marketing is, why it matters, and how to implement it at your company. Here we go…

What Is Relationship Marketing?

Is it selling products to your significant other? Or marketing a company in the dating niche? Not at all, actually…

Relationship marketing is the opposite of its transactional counterpart. Where as transactional marketing focuses on short-term goals such as attracting new consumers and increasing sales, relationship marketing is the art of engaging customers in a long-term relationship with a brand.

It’s what keeps a customer a customer; returning to a brand to buy their products or services again and again.

Both relationship and transactional marketing strategies are important to the overall success of a company. But in a world of (literally) infinite choices, the forging of deeper relationships between brand and consumer is becoming much more important.

Why Does It Matter?

I know what you’re thinking, “does my company really need to invest in relationship marketing? We already do social media, send emails, write blog posts… Now you want us to do more?”

Well consider this my overworked friend: it costs five times more to attract new customers than it does to keep the ones you already have. FIVE TIMES! If you don’t have a plan in place to retain buyers, you’re basically flushing money down the toilet.

But despite the existence of this jaw-dropping, eye-popping statistic, studies show that only 40% of businesses put an equal amount of focus and effort into keeping their customers.

The truth is, we’re all so focused on getting new people to purchase our products and services, we’ve neglected the people who actually allow us to be in business in the first place.

Crazy? Completely. Fixable? Definitely!

So that’s what we’ll focus on for the rest of this blog: implementing an effective relationship marketing strategy for your business.

Implementing an Effective Relationship Marketing Strategy for Your Business

Relationship marketing is all about retention. The goal isn’t to sell them a product or service, but to keep selling it to them for years to come. But how is this accomplished? With an effective strategy that builds a bond between your company and the people it serves, of course!

Let’s talk about how your business can develop a relationship marketing strategy:

Focus on the Complete Customer Experience

Each of your customers will travel through a series of steps before they actually agree to whip out their wallets and do business with you. We call this the buyer’s journey and it consists of a few stages:

  1. The Awareness Stage: This is where your prospects (they’re not customers yet, remember) are identifying the challenges they face and beginning to decide how they should address them.
  2. The Consideration Stage: In the consideration stage, the prospect has a clear idea of the challenges they face and they are evaluating each and every option available to them to solve their problems.
  3. The Decision Stage: Finally, the prospect reaches the decision stage. They know their challenges and how to best address them. They are now simply looking for the best product or service to help them do so.

As you can see, this buyer’s journey is completely focused on the initial sale. It’s transactional marketing at its finest. But your customer’s experience with your company doesn’t end with the first sale, right?

Unless you sell caskets or tombstones (if you do… creepy!), you typically have an opportunity to sell to customers a second, third, and fourth time. Depending on your business and the products or services you sell, you may be able to sell to your customers dozen of times!

But the only way to do this is to focus on the complete customer journey. To make your customers love you and increase their loyalty so they buy repeatedly.

Listen to Your Customer

Today’s consumer isn’t shy about letting companies know what they think. Social media gives us a worldwide stage and access to any one person or business.

And while some crotchety, old school business folks may not like it, this really can be viewed as an incredible advantage for your company!

Your customers are literally telling you what they want and how they want it. This is marketing gold for those who take the time to listen. So read forums and social feeds, search news articles and hashtags related to your brand, maybe even (gasp!) ask your most loyal customers directly their opinions on certain things.

The answers you get will be invaluable.

Provide Extra Value

So how can you make sure that your customers won’t make like trees and leave you after the first sale? Give them something they can’t get anywhere else. Provide extra value.

We’ll discuss specific tactics to try in the next section of this post, but “extra value” could come in the form of coupons and discounts, insightful blog posts, special events, and more.

Profess Your Values

What does your company stand for? While professing your values, may turn certain customers into enemies if they don’t agree with your stance on specific issues, it may also turn casual customers into passionate, lifelong brand ambassadors.

As the old saying goes; quality over quantity. Decide if it’s better to have many half-hearted customers, or have a smaller, but psychotic (in a good way) cult following.

A Few Tactics Worth Experimenting With

Well, we said we’d talk about specific tactics you can use in your relationship marketing efforts… Guess we better deliver! Here are a few ideas for you:

Sales and Discounts

Ain’t nobody sad about saving some money. If you want your customers to come back, wallets open; consider giving them a financial reason to do so. BOGOs and percentage discounts get people in the door. And the money you “lose” per transaction is generally made up in an elevated number of sales.

Free Education

What’s better than discounted education? Free education! And the more of it we can cram into our tiny skulls the better. Give your customers what they want and help them solve their most pressing problems.

This can be done through a company blog, YouTube channel, Facebook Live Videos… Even a nifty infographic or Slideshare. Just choose whichever platform your specific audience uses and then deliver quality educational content they’ll enjoy.

Piece o’ Pie!

Use Technology

Technology can turn the smallest of companies into mighty goliaths when put to work correctly. So why not use it to your advantage and build better relationships with your customer base?

Chatbots will allow your company to “interact” with customers, even after all your human employees have clocked out for the day. Though they can’t be used for everything, many initial, simple questions can be handled by the bot of your choice.

But chatbots aren’t the only customer-retention-boosting technology out there. Analytics software can give you gloriously detailed insights on how your customers interface with your brand. Study those findings and you’ll glean a wealth of knowledge you can use in your relationship marketing efforts.

Some companies are really going hog-wild on the customer retention front and deploying AR (augmented reality) and VR (virtual reality) experiences to better engage their customers. That’s right, VR isn’t just a plot point in some forgettable science fiction novel anymore!

In 2017, Guinness, your favorite favorite Irish brewery, used VR in its marketing efforts. Basically, participants donned a VR headset and experienced a 360 degree, virtual environment while master brewer, Peter Simpson, told them when to taste and smell each beer on the sample tray.

How’s that for outside-the-box thinking?

Personalize and Thrive

Each of your customers is unique, and they know it. If they think, even for a second, that you don’t respect their individuality, they’re likely to find a different brand that does. Fortunately, personalizing your communications with each customer isn’t as difficult as it sounds.

Here are a few ideas:

  1. Segment Your Email List: Modern email marketing technology (one more hip-hip-hooray for technology!) allows brands to easily personalize their emails through list segmentation. For the uninitiated, segmenting a list is the simple act of grouping together similar customers in order to send subscribers more relevant content.
  2. First Names Please: One of the easiest ways to personalize your communication with your customers is to use their first name in your correspondence. It’s also one of the most effective — just don’t misspell it! This tactic is used heavily in email marketing.
  3. Targeted Landing Pages: Want to sell a current customer a new product? Make sure you send them to a landing page that will resonate with their world views. How? Use those analytics, brah! Then craft different landing pages for each buyer persona you sell to.
  4. Appreciate the Automate: Not sure why we’re so into rhyming and alliteration today… But just roll with it! Use automation to send customers the right offers and content. If they clicked on link X, don’t send them to web page Y. With a little bit of elbow grease, automation can make your marketing efforts much more convenient, consistent and personalized.

Get Social

Social media, even with all its flaws (fake news!), is one of the greatest things to ever happen to businesses. But so many companies use these networks as one-way announcement boards. Lame!

Never forget, social media is supposed to be SOCIAL. Which means your company needs to interact with your customers, not just ask them to spend money on your products or services. So respond to their messages and comments, ask them questions and listen to their answers, share things they’ll find interesting — even if they aren’t necessarily about your company.

Another tactic you can use to give your customers a better brand experience via social is to use Facebook groups. Maybe you create a specific group for your VIP customers; those that really appreciate your brand, and give them special discounts or company insights.

Relationship Marketing For Your Business

Getting new customers is great, but if that’s the only goal of your marketing efforts, we suggest you reconsider. Like right away…

Use what we’ve discussed in this post to create an effective relationship marketing strategy for your business. It really isn’t that difficult when you set your mind to it! Especially when you think about all that money you can potentially save.

Just remember, to focus on the complete customer experience, listen to what they have to say about your brand and industry, provide them with above-and-beyond value, and maybe even consider emphasizing a few company values.

Then use a few of the tactics we outlined and you’ll be good to go. Now get out there; you’ve got customers to retain!

November 29, 2018

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Why We Spend 40,000+ a Year on Our Remote Team Meetings

Toggl currently has 37 employees – 11 of them work remotely from other countries. That number is only going to grow in the future, as we’re steadily but surely working towards building a global team.

The main reason we’re moving towards a remote team is to have a hiring pool much much larger than our immediate geographical area.

What we are not building a remote team for, is cost-cutting or trying to get by as cheaply as possible.

Building a remote team is not about cutting costs.

In fact, we spend well over 40,000 Euros per year on our remote team meeting trips and team challenges. And this is not including the 30+ annual client meeting trips and other company events.

Toggl team members from Spain, Belarus and Estonia working together in Tallinn (August 2015).

A lot of business people have asked me if there is any tangible benefit we get out of these meetings and trips? Is there a real and immediate monetary value that we can take out of it? Where is the ROI?

There are two ways you could answer that question.

In terms of costs, our calculations have shown that it is indeed more cost efficient for our teams to travel, rather than have established offices in different countries. That difference is expressed by an order of magnitude. We’ve done the math and according to our estimates an office in New York would equal at least 200 trips per year. As for the travel option – we’re currently doing about 30 client trips and 20 team meeting trips per year.
But the bigger question is – and that’s what people usually have in mind when they ask the question – do remote teams need to have offices or physical meetings at all?

This is where long term thinking comes in, as you need to look beyond maximising your immediate positive cash flow.

The ROI of a handshake

The idea of doing regular team trips wasn’t our own. The inspiration for the model came from remote work “giants” like WordPress, Github and 37Signals. We carefully analysed their experiences before starting out with the remote system, and quickly noticed one striking conclusion shared by all these companies.

Each of them found that having regular face-time is an absolute must have.

Every Toggl team member makes hundreds of small decisions about Toggl and its business each month. I am absolutely certain (and our experience also shows it), that these decisions are better informed and motivated if people have a better, more personal understanding of not just their teammates, but also their customers.

It’s very difficult to get to know another person via video or a Slack channel – let alone learning to trust that person. Building a team without trust is very difficult, if not impossible. The only way to build that trust and gain a deeper understanding of the other is to physically meet on a regular basis.


The remote mindset goes much, much deeper than basic costs.

It’s true that when done right, you can operate more efficiently than with a traditional office setup. But ultimately, the real benefit lies in having access to people with different language skills, viewpoints and cultural backgrounds, covering different time zones – all that without the hassle of setting up offices all over the world.


Do you manage a remote team? We’d love to hear from your experience in the comments below.

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