According to the dictionary a relationship is defined as aclose connection between two or more people or things. Despite the “R” being atthe centre of CRM many companies don’t understand customer relationships atall. The focus of CRM Marketing should be the customer relationship and not the number ofsales generated, the sales will come as a result of building the relationship.

Relationship marketing should not be focused on short-termwins, it should be focused on delighting an audience and your customers for thelong-haul. CRM Marketing is based on the idea of the brand knowing its consumers. It usesdata and insights to develop relevant customer relationships that create deeperemotional bonds to deliver long term growth. This blog is all about how to putthe R back into CRM.

Don’t think Gold, Silver & Bronze, think Family,Friends & Acquaintances

Many companies still think of customers as just resources tobe harvested for the next up-sell or cross-sell opportunity rather than asindividuals looking for certain kinds of interactions. So instead of thinkingabout customers in terms of value like high, medium and low, think about themin terms of relationships. Think about how you divide up your ownrelationships. Most of us would see our most valuable relationships as thosewith our family, then comes our friends and finally our acquaintances.

With family you never miss their birthdays, you always spendmore on them at Christmas than you planned, you tell them momentous news first.Your family get hurt if you don’t ring or text and they enjoy taking an Active role in yourlife.

Friends on the other hand are an Important part of your lifebut they’re not family. You buy them presents but you don’t go mad and you haveto make an effort to keep in contact. Your best friends can eventually almost becomefamily.

Finally, acquaintances are many people you meet in your life- colleagues, neighbours, friends of friends etc. You acknowledge them, you arepolite and friendly to them but there’s no real attachment yet. Being overfamiliar with acquaintances can put them off, after all you don’t really knowthem. Acquaintances can become friends over time once you know them better, butmost of them don’t.

I’m not saying you have to use friends, family and acquaintancesas some form of segmentation, it is merely a great way to get companies to thinkabout the different types of relationships they should have and will have withtheir customers. It’s a great to think about how to treat customers based on thosedifferent relationships. Your loyal and high value customers should be andexpect to be treated like family and don’t put off your new or infrequentcustomers by being too familiar, you haven’t earned that right.

Learning is key to building relationships

There is a lack of relationship intelligence. Many companiesare not aware of the variety of relationships customers can have with a companyand don’t know how to reinforce or change those connections. They may be verygood at capturing simple demographic data—gender, age, income, andeducation—and matching them with purchasing information to segment customersinto profitability tiers. But this is not a view of customer relationships. Peoplenow expect companies to understand what type of relationships they want and torespond appropriately—they want firms to hold up their end of the bargain.Unfortunately, many brands don’t meet those expectations.

As a consequence, companies often managerelationships haphazardly and unprofitably, committing blunders that underminetheir connections with customers. A person wanting to be treated like a friendis more likely to be treated as a mere party to an exchange or, even worse, asan opportunity. It goes the other way too, a customer looking for a mereexchange may get an off-putting attempt at building a friendship. In studyafter study, it is found that customers are frequently frustrated by companies’inability to meet their relationship expectations.

Through on-going interactions with a customer the brand canlearn how the customer wants to be treated. All relationships should be learningrelationships. The relationship should be a continuous cycle of interaction,learning and understanding so that the customer finds it more convenient andbeneficial to deal with the brand. The brand is able to become smarter withrespect to the customer’s individual needs and treat the customer in a morepersonal and relevant way. This will lead to customer loyalty because the customerwill be disinclined to start a fresh relationship all over again with anotherbrand. The customer does not want to re-teach a competitor brand what hasalready been learned by the relationship focused brand.

Building a relationship proposition

A CRM Marketing programme must have longevity, its content and thememust be driven by your customers’ wants, needs and interests and offer theright balance of emotional and rational benefits. To do this you should developa Relationship Proposition. In simple terms this is the customer benefit or reasonfor interacting with the CRM Marketing programme.

What kind of relationship should your company have with thecustomer? Are you there to educate or to entertain? Are you there to inspire orsupport? The relationship proposition should identify and prioritise keycommunication themes or stories most relevant to the customer or customer segmentand be key to bonding the customer with the brand.

It builds upon the brand and uses its tonal values but it isalso based upon a human emotional insight (not product features or benefits).Ideally the proposition should offer a two-way value exchange and be trusting,reciprocal, engaging and honest. It should develop an ownable creative devicefor dialogue. Relationships last longer than advertising campaigns.

Make sure your team understand the psychology ofrelationships

It’s critical to regard relationships as long-term assets.Too many companies put their CRM Marketing databases in the hands of the IT department oroutside software consultants, base their customer service responses on simplealgorithms, relegate crisis management to the PR function, and fill theirmarketing teams with people who have inadequate emotional intelligence and apoor understanding of the psychology of relationships.

We’ve found that the optimal approach involves reorientingthe CRM team around relationships, creating relationship-oriented roles foremployees, and expanding the team’s relationship understanding. Marketers needto educate staff, change their hiring practices, establish appropriateincentives, and shape processes around relationships.

In most marketing organizations, it’s no one’s job to thinkabout relationship segments or take steps to bolster or otherwise manage thevarious types of bonds that customers form with the brand and company.

The CRM team should spend time putting themselves in thecustomer’s shoes, understanding their needs and wants. They should look beyond performancemetrics like engagement rates and also look to understand how the customer feelsas a result of their CRM Marketing activity.

Now, more than ever before, it’s time to focus more on the Rin CRM – the Relationship.

Because relationships matter.

Further Reading

If you have any questions about why CRM Marketing is a more profitable way to run your business and your struggling to break away from performance marketing.  Then read this article on why the danger of focussing on program efficiencies is losing sight of long term customer value (LTV).