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Relationship marketing has always been a term in the marketing world.
For decades it’s been a part of customer loyalty and customer marketing — emphasizing relationships over transactions.
But today, relationship marketing is even more important than ever. Here’s why: as software continues to eat the world, more and more businesses are making the shift to subscription-based revenue models with SaaS.
And with subscription-based revenue — think of services you pay for month to month like Spotify or Dropbox — that means that a larger percentage of this year’s revenue will come from existing customers. The more customers that you keep happy, the more customers that keep paying you every month.
This is the main reason that marketing software needs to change, and that’s what we’re focused on at Drift — relationship marketing.
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What Is Relationship Marketing?
While traditional marketing is focused on marketing to strangers (prospects and leads), relationship marketing is focused on marketing to customers.
Depending on the organization, this could be the responsibility of the product marketing, growth marketing or customer marketing teams.
Instead of trying to move one of those strangers further down the funnel, relationship marketing is focused on creating a long term, valuable relationship with an existing customer — an ultimately getting more revenue out of that customer or account.
And valuable is not just a buzzword — a five percent increase in your customer retention rate can increase a company’s profitability by 75 percent.
Or to break it down even more: renewing a happy customer on average costs just 11 percent of what it would cost to acquire a new customer.
No wonder there’s more interest than ever on the topic of customer success:
Source: Google Trends.
The Future Of Marketing
Back in 2009 when we started Performable and throughout our time at HubSpot, we focused on the top half of the marketing funnel — building tools that helped marketers attract more leads and sales reps convert more leads. Today, those tools have been used and loved by tens of thousands of customers.
But there’s one thing that Elias and I kept coming back to: if customer experience is the new marketing, why does marketing end when someone becomes a customer?
And this is a big part of what we’re focused on today at Drift. Building tools that can help marketers transform the relationships that they have with their customers.
This is something that modern businesses are all thinking about today, from Slack to Buffer to Quip to Trello and more.
Those modern businesses believe helping is the new selling.
And they certainly believe that customer experience is the new marketing. They have changed the way they do marketing and sales to match the way that people actually want to interact with a business today.
Interested in relationship marketing? Learn how to keep your customers happier with Drift.