Relationship Marketing: Definition, Cost & Examples

Cody Cromwell
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How Relationship Marketing Works

Relationship marketing is an approach to selling that focuses on building relationships with your customers as the goal. Relationship marketing uses one of the principles of influence – reciprocity.

The goal is to create a reciprocity loop in which customers get inspired to respond to your brand’s encouragement and respond in a way that strengthens their brand loyalty.

Harry Beckwith, the president of YouGov, a leading global behavior research and data company, says, ”There are two pillars that will make a relationship succeed: People care about each other and people care about what the other person thinks.”

For example, if your neighbor gives you a CD of the album that she just produced, you’re likely to return the favor and return the CD. So this type of relationship is a positive reciprocity loop.

In addition, there’s also a fact of low-cost high-volume business: When people are happy, they return again and again, and this fosters customer loyalty.

Who Relationship Marketing Is Right For

If you’re trying to build a business that solves a problem for its customers, then the value of a loyal relationship is invaluable. Loyalty is a quality that stems from true value, and your customers want a product or a service that delivers value. If you can make a loyal connection with your customers, then they’re willing to plug into your brand to help you grow your business.

Relationship marketing is the way to do just that. Relationship marketing is a way to establish a mutually beneficial connection with your customers. Here’s the general process to follow:

Help customers solve problems that are important to them.

Create a simple, inexpensive connection to foster a lasting relationship.

Communicate through relevant content, using the ideal channel.

Help customers get what they need faster, whether it’s information or products.

Continue to make your customers successful and profitable.

Encourage customers to continually provide referrals and repeat business.

5 Levels of Relationship Marketing

In recent years, tremendous investment has shifted into relationship marketing, one of the most effective ways to grow your business and widen your customer base. But for many business owners, the concept of relationship marketing is still a mystery.

Here, we breakdown the most common levels of relationship marketing to help you understand what your competitors are doing and popular methods to make the most of your investment in this type of marketing.

Relationship marketing is most commonly broken down into 5 levels:

  • Level 1, Relationship Marketing, focuses on spending money on the customer
  • Level 2, Relationship Marketing, focuses on spending money on the customer to build long-term relationships
  • Level 3, Relationship Marketing, focuses on spending money on both the customer and the media to build long-term relationships
  • Level 4, Relationship Marketing, focuses on upselling your existing customer base; you are doing the job of a salesperson with online tools

Level 5, Relationship Marketing, focuses on doing marketing without selling. You are focused on building a relationship with your prospects, not buying their product.

A lot of people fail to see the significance of these levels because relationship marketing is traditionally thought of as only spending money on raising brand awareness, buying media, etc. The five levels are important because they have a definitive cost associated with them. The first level costs nothing, while the last level takes money.

Relationship Marketing Strategies

Relationship marketing strategies involve providing incentives to loyal customers to encourage them to recommend the product or service to others. One example of a nationwide service company that uses relationship marketing is FedEx, which offers a 25% discount to frequent users of its services.

Another example of a company that uses relationship marketing is the restaurant chain PF Chang’s, which offers a Loyalty Reward program to frequent customers. Customers who are loyal to the restaurant chain can register their card to receive rewards for dining at PF Chang’s restaurants, as well as earn a discount on new purchases. Registration can be done online through a secure website and is only required once.

Customers reward a company’s loyalty by telling family and friends about the products and services that the company offers. Referral marketing has proven to be the most effective form of relationship marketing. Not only is it free, but it is also effective and creates a mutually beneficial relationship between the customer and the company.

Relationship marketing typically occurs during the up-selling stage of the buying cycle. In other words, it is designed to motivate customers to buy more. During this step of the purchase cycle, customers are encouraged to purchase additional products or services to increase return on investment (ROI).

Relationship marketing can also involve employing advertising and promotional campaigns that motivate consumers to recommend the brand to their friends and family members.

Put Your Customers First

Not Your Money!

The trend today is to put customers first, not your money. Relationship marketing sounds too good to be true? It’s not! Somehow, brands have forgotten that customers are their favorite marketing tool. Why should you put money first before your customers?

The answer would be simple that you’ll make more money if you put your customers first. In a nutshell, relationship marketing is combining the companies’ brand value, with consumer’s personal needs.

To put things in a real-life example, whenever you’re with your best friend and you’re craving for a bowl of ice cream, you visit a store that sells ice cream. You don’t want to hit the road just for that. What if the place down the street sold it at cheaper prices? Should you still buy there?

Sounds logical, right? But do you think the same things will apply in a business scenario? Indeed, there are still some companies that think that way. But to be on the safer side and to create a sustainable relationship with the customers, let’s just put your customers first.

Give Customers More Than What You Sell

Relationship marketing refers – the practice of creating and maintaining a trusted personal relationship with a customer. The key to this type of marketing is building a customer’s trust.

Relationship marketing gives you several advantages. You’ll develop long-lasting and profitable customer relationships, providing a boost to your company’s bottom line.

Most importantly, you’ll be able to develop new and cost-effective products, services and support that are highly dependable, fair and reliable.

If you’ve read the 4Cs text above, you’ll already know that love + trust is the most important aspect of any relationship. When it comes to your brand your customers will only pay attention to this if you have the moral authority behind your promises.

But, it’s only by building trust with your customers that you’ll also be able to keep their loyalty as they don’t take kindly to taken advantage of and then abandon.

A customer will always remain loyal to a brand if the needs and satisfaction with the product or service is included in their minds upon every single purchase.

Companies can take advantage of these types of relationships by providing loyalty points, bonuses and discounts to their clients in ways to promote stronger relationships.

Personalize Communications & Offers

Relationship marketing is all about personalizing communications and offers for current and prospective customers. It’s a marketing approach where the focus isn’t on passing out messages, banners and coupons but rather on providing those interested with valuable content which they appreciate.

In other words, it’s about adding a personal touch to the way a business interacts with its customers. It’s the term used to describe customer interactions that are designed to build and nurture relationships with existing and prospective customers.

According to the Michelin Man campaign, it is “the tireless effort taken by marketers to make their customers feel special.”

Relationship marketing demonstrates an understanding of the needs and wants of the consumer within a particular target market. Without this understanding, the marketer will be at a loss when trying to design a value proposition or provide personalized communications. A good relationship marketing solution will allow the business to meet the needs of the customers in terms of providing:

  • Information
  • Promotional offers
  • Help
  • Concerns

Provide Great Customer Service

Relationship Marketing Tools

Referral Marketing is one of the best and most trusted form of leads or customers are market to know more about you,.

Word of mouth is one of the most trusted forms of advertising & moving more on internet, most of people are looking that that is why they done the activities like word of mouth, Its also known as strength of second opinion.

Social media is another of the best ways to spread the word about your business, which includes creating your first bounce. Social media is also one of the fastest way of growing your list and expanding your reach across the globe.

Now the next thing that is going to be discussed is, referrer is going to refer your business to their friends and social networks.

Currently, there are so many referral marketing platforms service online. As an online marketer, you can choose any popular platform that can help you gather the information about your clients, and you can also integrate them into your best referral marketing tools.

Social media is also a great way to maintain your connection with your existing clients as well as to build a strong database of new leads/customers. Marketers have the opportunity to show the value they bring in close relationships. Social media also becomes more than business tools–they become a crucial part of creating an online community that is friendly and engaging beyond the message.

Pros & Cons of Relationship Marketing

Relationship Marketing is defined as affilations of two or more individuals and their interest to each other, and how it is used with commercial purpose. It is a combination of the art of marketing with a strong influence of personal relationships and that of activities in which one party has a personal, professional, or financial interest in another. It is the use of your relationships to do business.

Charitable Foundation

SBU: Student Body UTM

Commercial Initiative

SBU: Strategic Business Unit

It Is a Combination of Relationship Marketing that Helps You Build a Marketing Plan

This marketing plan focuses on the interests and needs of consumers.


Customer service.

Brand awareness.

Consumers Will Be Loyal to Brands when provided with High Quality and Timely Service

Faster scaling, creating more productive business relationships.

Digital relationship marketing (e.g. e-mail marketing).


Relationship Marketing has three key concepts:

Community Building.

Customer Relationship Management.

Relationship Marketing.

Both companies and non-profit organizations are utilizing Relationship Marketing to grow and are very effective at it. Businesses are working to build personal relationships with their customers to build brands and grow a business.

There are three different types of Relationship Marketing:

Personal Relationships:

Pros of Relationship Marketing

The ROI of relationship marketing is quicker than that of a traditional ad. Usually, a new customer will see your ad for an average of 8 minutes per visit to your website. However, a customer that’s already made contact with you may see a third of that time. So if you advertise with your existing customers, your cost per customer is a lot lower than that of a traditional marketing campaign.

It works!

Your customers and their friends and family are the best people to sell to. Since customers come back to your website regularly, you’ll be able to sell to their friends and family as well.

You Sell through Word of Mouth and Win with People’s Passions

Rather than selling through your most expensive advertising method, your marketing campaigns are sold because of your customer’s passion for your product, service or company. You’re creating an experience for your customer that’s worth talking about.

Cons of Relationship Marketing

It’s working for you, now you have to keep it!

Cons of Relationship Marketing

Relationship marketing is a very popular strategy because it’s basically a cost-effective, time-effective…. win-win situation. However, there are also some cons of relationship marketing; mainly that it is not right for every business, and it can be all or nothing.

Relationship Marketing Pros

We’ll go over how relationship marketing can help you achieve your marketing goals.

Wins Employee Buy-in

Employee buy-in is essential to the relationship marketing process. Employees are the heart of any successful company. A great company employee is aware they are part of something special and can make an impact. If you have a marketing campaign in progress, your employees will be on board and will participate in any/all aspects of the marketing campaign.

Employees Are Your  Ambassadors

Your employees are your brand ambassadors. They can help promote your business and make great impressions on your customers. Your employee outreach campaigns and social media activities should also be in this vein and help your business grow and make a difference where you work.

Customers Justify the Cost

You will likely be able to satisfy the wants, needs, and desires of your customers which in turn will justify the cost of the marketing. They are buying into what you are offering and your business.

3 Examples of Relationship Marketing

Relationship marketing is closely related to loyalty marketing. The goal of both marketing strategies is to keep customers, prospects, and even current customers returning to a business. According to Chris White, relationship marketing has been instrumental in successful sales, but it can be effective with questionable products.

Chris White explains that it’s important that you don’t forget one of the most important factors when it comes to relationship marketing – the contract. –It’s important to have a contract that states what can and can’t be done to the product, and what your rights are if there is a problem.

As with all contracts, every deal should be made in writing. A good place to start is to use the description of your product as a basis for your contract.

Lay’s: ‘Do Us a Flavor’

Lay’s is an American brand of potato chips that has been selling in the United States since the 1930s. There are more Lay’s sales women than there are in men in America. What do men and women do differently when they shop for chips?

In an attempt to explore the gender gap in snack foods, Advertising agency, Wieden + Kennedy came up with three new flavors.

The three flavors were Cinnamon the second-most popular flavor, Teriyaki, which means ‘boy’ in Japanese, and then Sriracha, a popular sauce which originates in Thailand.

Lay’s asked men and women to evaluate various brands of potato chips for memory formation … (on a scale of 1 to 10 …) how memorable all of these chips.

As they said in the campaign, ‘What is the difference between a nice, thick steak and a Thinly Sliced Filet Mignon? Flavor!’

Then they asked the same question of men and women … What are the differences between a nice, thick steak, a Thinly Sliced Filet Mignon and a Flavor? Flavor!’

Amazon: Prime

Relationship marketing:

Business model in which the customer (customer relationship management) is key

First task: direct net profit from all research and relationship in the marketplace

Second task: Identify first of all that information and align the best interest of all of your affiliates

In the business model where relationship marketing is key is purchasing behavior, purchases, and customer attitudes. The key is to focus on the customer's feelings, attitudes and purchasing behavior so that the company can make its products and services more meaningful, and thus providing more value and satisfaction to the customer. By focusing on the customer relationship, the company can use direct and indirect marketing to attract customers to themselves.

BEST example:

Prime membership service in Amazon.

When you order an item on Amazon, you get the possibility to wait a few hours and do not have to pay until canceled. Amazon sends a link to your email, so that you can pay later, and so you can not wait. When you do so, you will be billed $ 2.99 for the item you order. If you buy even more expensive products on the site, Amazon gives you free shipping. Amazon does not have a store, and there is no one to sell you. That is why it is better than e-commerce.

What is the Business Model for Amazon?

Dollar Shave Club: Customer Interviews

Face your fear.

Don’t put all your eggs in one basket.

It’s a business strategy that has worked time and time again. Think Mary Kay, Tupperware, and Tupperware parties. But the phrase … …is actually a common expression of warning to be careful of taking all your eggs or your bets in one basket because this is the best way to lose everything. As businesses have worked to tighten their budgets by spreading the allocated funds out over different sources and areas, they have seen their profit margins grow as well as their company’s longevity.

7 Pro Tips on Relationship Marketing

Relationship marketing is the beginning of a whole new era of marketing. While social media sites are now struggling amongst ad fraud and attention-span crisis, email marketing has been still a very robust marketing technique which has the power to bring you more new customers than your social media sites can ever do. A strong relationship with your clients and friends can make your business grow in a much shorter span of time than you ever expected.

How do you build such a relationship with your customers?

Convince them first

If you just start trying to sell to people, most of them will be turned off. Before you ever start the sales pitch, make sure that they’re already convinced of your product or service.

Do that by offering them a trial version and your best testimonials. Give them a reason to trust that you’re right for them. This is why relationship marketing in email marketing is so successful. It’s because the marketer takes time to show their customer the benefits before even trying to sell to them.

Explain how they can get it.

Make Customers Feel Cared For

Relationship Marketing is an effective way to help corporate marketing activation teams to make their customers feel cared for, driven and even involved.

Relationship Marketing is a strategy to take your brand’s relationship marketing objectives to another level by converting them into short and long term goals. Through relationship marketing you create, collect and analyze customer data, in order to deliver more relevant and interactive content.

One of the great values created by relationship marketing is the actual knowledge about your customers’ preferences, which makes it easier for you to connect with them in a more personal manor.

Some companies have even gone as far as to create in-house customer support teams to answer their customers’ emails, manage their online presence and follow up on social media.

Relationship Marketing is always recommendable for companies to create loyalty and emotional attachment with its customers. Feels good, does good.

Give Your Customers Ownership of Your Brand

Product, or Service.

Whether you are just beginning to think about using content marketing, you are already in the midst of using it, or you would like to take the advice contained in this post to another level, it’s a must for your content marketing strategy to create a relationship between you and your customer by allowing them to become your ‬venture partner.’ When done successfully, it will increase sales, drive referrals, and more!

This type of relationship marketing is sometimes referred to as ‬marketing 3.0’ because it is important to keep customers engaged with each additional service or product. Clients have so many choices available to them in the world today, and they need to be able to gain word-of-mouth recommendations from their peers. By converting a client to a you-seller for your product or company it will go a long way in building an ongoing customer-customer relationship.

When customers feel in control of their relationship with your company, they are also more likely to purchase a higher quantity of products or services at a time and they will make recommendations more regularly.

Use Micro-influencers

What are micro-influencers? They are influential people who are generally 18-40 years old. Instead of targeting your current customers, you hire these micro-influencers to promote your brand by sharing your content with their extensive networks.

What are the benefits of using micro-influencers?

Micro-influencers will share your content at a much more affordable rate than a celebrity influencer would. But what you do have to worry about is their type of engagement. On Twitter, for instance, they like to retweet your content without providing a link back to your original post. And if you have a big spotlight on your brand, you’ll also have to be cautious about potential haters.

The bottom line is that micro-influencers can help you create an environment of preferential sharing and engagement. What’s important to keep in mind is that when using them, it’s your responsibility to gauge their impact on the number of clicks and engagements.

When looking over your analytics for the week, you should be able to witness your post rate and average engagement increasing or decreasing after sharing the post.

How do you find micro-influencers.?

Understand Your Customers

Relationship Marketing just means that you have a very close connection with your customers. In this post, we look at the definition, cost and examples.

Have you ever experienced the pain of being rejected at least five times just to get one point to your big boss’s attention? Have you ever been like ‘Sorry. Didn’t get the job.’ I’ve kind of felt this way before, and I really think it is very frustrating.

The difference between the two examples is not the rejection but how we handle it. This difference depends on your relationship with your boss. Let’s take a look at it.

A Five Point Plan to Survive the Perpetual Rejection is a pretty popular book written by Robert Waldinger’s. It was published in May 2010 and has sold a total of 2.6 million copies worldwide. It has been translated into 27 languages. If Waldinger could write a book about rejection after going through interviews and countless rejection, then you don’t have to be working anymore because you are going to be promoted because of the great book.

As miserable as rejection can be, a relationship with a customer can go on to become a strong and ongoing relationship.

Take Your Time

Relationship Marketing defines the process of building and maintaining relationships between marketers and customers.

Relationship Marketing relies on forming relationships with prospective customers before trying to sell to them.

Once a relationship has been built, your company can begin to send out salespeople to turn that relationship into a sale or increase the value of the relationship. Relationship marketing is a great way to build relationships between a company and its customers, but it takes time and effort to build those relationships. Relationship marketing can be difficult and challenging. Some companies and businesses may not want to build a relationship marketing business. Others may not be able to manage clients or customer relationships on their own. Whereas some companies may be well suited for relationship marketing, but will not have the time or resources to manage those relationships over the long-term.

Relationship marketing has many challenges, challenges that can be managed, but take time. Once you have built a relationship and gained that customer’s trust, you can begin to sell your product or service. But to maximize your selling power you need to keep building relationships.

There are three main components to relationship marketing: relationship, communications, and business. The first step to relationship marketing is to build a relationship with your customer. Next, you need to keep in touch.

Connect With Customers in Person

Relationship marketing is the art of working with your customers to develop and reinforce mutually beneficial business relationships. It’s about the long-term benefit to a company, your business relationship, and your customers.

With relationship marketing, companies focus on addressing the wants and needs of the customer instead of just taking orders. Many organizations don’t have time to spend each day thinking about their customers’ wants and needs. However, this is a very important part of the process for helping build customer loyalty and building word of mouth buzz.

Relationship marketing is very much like interpersonal communication. The only real difference between the two is how and when you develop relationship marketing as a business.

However, companies sometimes can get in trouble when they bring relationship marketing to the point where it’s inappropriate. There’s a distinct line between “relationship marketing is everything we do” and “relationship marketing has replaced traditional marketing”.

Relationship marketing works best when the company and the customer understand their needs and wants and that the customer recognizes that there is a need for a relationship. If the relationship is one-sided, then it is something that must be developed. Therefore, it can take some time.

Tailor Your Services to Your Clients

The relationship marketing strategy boils down to limiting the customer and enterprise resource competition, not increasing or creating more of it, which in turn allows you to attract customers, deliver your services, and then position your company as a partner who can help solve all of your client’s business problems. The basic premise of relationship marketing is to provide you higher valued services at a lower cost.

The bottom line is that there isn’t one relationship marketing strategy. That’s because there isn’t a one size fits all approach. In fact, there are so many variations of relationship marketing that it starts to defy classification and explanation.

Everything from developing client relationships through referral networks, helping your existing customers or partners gain visibility and marketing connections, partnering together for a joint marketing campaign, building long term client relationships through customer loyalty programs, to partnering with industry trade associations, or negotiating joint ventures for a revenue share all count as relationship marketing.

Regardless of how you approach relationship marketing, the one ingredient that’s common to all relationship marketing strategies is the need to differentiate your offerings from your competitors. Then in order to do this effectively, you need to have some understanding of what your particular market is looking for.

Frequently Asked Questions (FAQs)

Relationship Marketing is defined as the effective and appropriate use of mutual understanding to achieve desirable business, brand, or product outcomes.

Here are some Other Frequently Asked Questions (FAQs) about Relationship Marketing:

What is relationship marketing?

Relationship marketing is the quality of getting to know a target audience and their needs so that you can take actions that are easily embedded in their daily life. This relationship will also lead to providing businesses with those vertical opportunities. Every business strategy that is design to achieve the pinnacle in most effective way is relationship marketing.

What are its features?

Solution oriented marketing is the way to get to know the business and their audiences.

The main features of relationship marketing are:

{1}. Attracting the target audience…
{2}. Practicality of the marketing practices.

How can relationship marketing help the business?

A good relationship with a target audience makes that person closer to the business. It provides the audiences with the practical value of the business and its products and services. It blows a customer’s mind in right way by continuously providing them with new experiences. The audience would easily remember anything shared with them.

Why would a business not want a good relationship with the target audience?

What are the levels of relationship marketing?

As time passes and computers become more mass-produced, mass marketing becomes more readily available to the public, for both business and personal use. However, in order for marketers to remain successful and profitable, technology must be used to its full advantage, and there is enormous opportunity in the market for companies using relationship marketing strategies.

Relationship marketing is the art of building relationships with niche markets, so they view the brand favorably, that result in a higher return on investment. (ROI).

Knowledge is a key factor in any relationship, and one of the most important things to be learned is the value of a customer’s loyalty to you. This information can give a great advantage in possible competitions.

Brands need to evaluate their competition and by doing so, begin to understand what their customer wants and how to interact with them, to gain their loyalty and create a lasting relationship.

What are the goals of relationship marketing?

Relationship marketing is a marketing technique that focuses on building long-term customer relationships. Relationship marketing creates customer loyalty and sustained brand loyalty. The goals of relationship marketing can be divided into two categories – brand building and customer retention and acquisition.

Relationship marketing is a proactive marketing approach, and buyers are treated more as customers than transactional targets, with a focus on long-term customer relationships instead of short-term sales conversions. Relationship marketing is also considered a customer-centric marketing method, which deals with customer needs.

Relationship marketing uses the following three basic marketing strategies:

{1}. Developing and nurturing customer loyalty by enhancing customer satisfaction.
{2}. Creating brand loyalty by treating a person more like a customer than a mere transaction.
{3}. Developing and maintaining customer relationships through ongoing customer satisfaction and the identification of customers’ requirements.

Relationship marketing focuses on distinguishing the company from the competition through marketing communications. Relationship marketing also helps companies market sustainably to customers who are prone to change, no longer buy from the company, or have not yet bought from the company.

Relationship marketing is well suited for building a company’s brand, realizing a company’s sales objectives, and understanding customer needs.

What are the benefits of relationship marketing?

There are a few benefits of relationship marketing. Your customer will trust you and buy from you more often because of the relationship you have built with them. For example, if a customer knows you are a serious manufacturer of home goods, they will know that your products are of good quality.

The customer will also want to buy from you because of your company’s reputation. The customer will know that your company is committed to their satisfaction by putting their customer in the spotlight and caring about how that customer feels.

Your customers will also become loyal and more connected to your business because of the prominence you give the customer. They will feel a sense of ownership for your work. If you include important customer information in your marketing campaigns, your customers will feel like your company is giving them the attention and respect they deserve.

By making sure your customers are satisfied, you will increase the chances of them coming back to you for a second order and a third order, and so on.

What is the main difference between personal and relationship marketing?

Personal marketing can be broken down into three main components:

Customer-Based Personal Marketing

Customer-based personal marketing involves using personal information about your customers to develop relationships with them. Your aim is to help your customers make more informed decisions and offer them more tailored products, service and advice.

Customer-to-Customer Marketing

Bottom Line: Relationship Marketing Definition

Cost & Examples.

The Relationship Marketing model is a three-step process with six phases of action. The relationship process has many forms, such as a win-win, transfer of value, core competency, network of customer relationships, or business to business.

In the Relationship Marketing model, the focus is on keeping the client company in business, meeting their needs, solving problems, identifying untapped needs, presentation of value, relationship with the client company; in addition, relationship marketing deals with customer service and loyalty. There are many key phrases of the relationship marketing in customer relationship management-CRM- software industry such as relationship marketing, customer relationship management, customer retention, relationship marketing and customer relationship.

The general product of a relationship from time to time which we give (A) is absolutely an ongoing process of a very close observation of the customer relationships with the use of customer relationship management software. A customer relationship is in essence the aggregation of two or more individual client relationships.

The customer relationship management software is used to organize the continuous flow of customer relationship data. It helps in the capture of the data such as customer file details, products sold, services offered, budgets, sales information, marketing information, subscriptions, training: etc. etc.