Maximize Customer Lifetime Value with Relationship Marketing Strategies and Examples (2024)

When it comes to friends, you’d rather have one really good friend you can count on for support than ten unreliable acquaintances. The reason for this is the high value of long-term relationships, and this concept is important for both brands and customers. One loyal repeat customer who frequently purchases from your brand and shares it with others is far more valuable than ten one-time customers who jumped on a sale. Acquiring these loyal customers is the driving force behind relationship marketing.

What is relationship marketing?

Relationship marketing is a promotional strategy that aims to encourage brand loyalty and repeat business through strong, lasting customer relationships. Unlike other types of advertising that aim to increase sales in the short term, relationship marketing strategies focus on long-term engagement and customer retention. A relationship marketing plan is important because, over time, an engaged customer base tends to make repeat purchases and recommend the brand to others.

Benefits of relationship marketing

Here are some benefits of a successful relationship marketing strategy:

Cost effectiveness

By some metrics, the cost of acquiring new customers can be five to 25 times higher than retaining existing ones. It’s much easier to retain an existing customer base that is already loyal and has bought into your product’s value proposition. People who feel connected to your brand are more likely to buy more from your company over time, increasing customer lifetime value (CLV), or the profit they make during your relationship.

Insights

Nurturing strong customer relationships isn’t just about sales. When brands create a genuine connection and dialogue with their community—whether through direct conversations, social media engagement, reviews, customer surveys, or other customer feedback—they gain insight into their customers’ needs and preferences.

This deeper understanding is powerful because it can generate ideas for new products and more effective marketing strategies, as well as form the basis for long-term business plans.

Brand ambassador

Your customers are your best advocates. Building long-term, customer-focused relationships can create loyalty and a sense of community around your brand. Satisfied customers are likely to recommend your products to others, and that word of mouth can generate growth and new customer acquisition.

Upselling opportunities

Long-term customers tend to be more receptive to upselling (e.g., a premium version of a product they like) and cross-selling strategies (e.g., a suite of complementary software programs). Leveraging data like purchase history and messaging tools like email marketing campaigns can be particularly effective at identifying and maximizing these opportunities.

Relationship Marketing Tactics

Companies can implement strategic relationship marketing tactics including:

Loyalty programs

Encourage customer loyalty by offering points, discounts or exclusive benefits like early access to new products. Some companies also offer “surprise and delight” initiatives, such as sending extra items with purchases or sending surprise gift cards.

Loyalty programs can help build strong relationships because they show your company’s appreciation for its customers. When customers appreciate these gestures, it can in turn foster brand loyalty and encourage them to make repeat purchases.

Two-way social media conversations

Real conversation involves a dialogue between parties, and this is true in a marketing context as well. Stay active and engage with your customers on social media platforms by responding to messages, comments, and mentions of your brand. You’ll gain important information about the customer experience and opinions while leaving a positive impression as an engaged company that cares about its community.

Referral programs

Your current customers are your best brand ambassadors, and you can motivate them to promote your business by offering them rewards for referrals. You can provide referral links that customers can share with friends and offer them a perk like “give $20, get $20.” Or you can experiment with other referral program ideas, such as social media contests and exclusive access.

Personalized communication

Everyone wants to feel special. And you can foster that feeling by showing your customers that you understand and care. Simply mentioning your customer’s name in email subject lines and chat responses can go a long way.

Also consider leveraging customer data, such as information about sales transactions, purchase history, interests, and birthdays. For example, in a post-purchase email marketing campaign, you could ask your customers how they liked a particular product to solicit customer feedback and invite them to reach out if they need help. Another idea: send warm birthday wishes with a 10% off coupon.

Community House

Create spaces for your customers to interact with your brand and each other. These collaborative spaces can be virtual, such as social media platforms, online chats, webinars, or in-person events like pop-up shops, in-store workshops, and industry conferences.

Content marketing

When you understand your customers’ needs, you can launch a content marketing campaign that supports them on their journey. Some of this content may be related to your brand, such as valuable collateral documents for a specific product or tutorials that demonstrate how your service offering works. Some may be external in nature, such as newsletters with helpful links to events in your community or news from your industry.

Regardless of the type and format of the content, it is always about offering your target audience added value that also increases brand awareness.

Examples of relationship marketing

Here are some examples of how today’s brands practice relationship marketing and build lasting customer relationships:

Blume’s Blumetopia Rewards Program

Cosmetics company Blume uses a points system called Blume Bucks in its loyalty program Blumetopia. Customers can earn Blume Bucks by following the brand on social media, purchasing and reviewing products, and celebrating birthdays.

When customers earn Blume Bucks, they gain access to various levels of benefits, including special promotions, invitations to VIP social media groups, limited edition merchandise, early access to new products, birthday gifts, and more. Blume also offers a “Give $10, Get $10” referral program, where you give your friend $10 off their first purchase. When their purchase is complete, you receive a $10 coupon in return.

The Outrage’s POV-centric approach

The Outrage was founded as a clothing company specifically designed to raise money for activists, and that strong stance remains central to its content-focused e-commerce. The brand says it is “a hub for activism… leveraging the power of community and fashion to mobilize our growing network of activists.”

For example, its feminist gift guide covers key issues in the intersectional feminist movement in depth, educating the reader before listing the products they should purchase to support related causes. It also includes links to additional educational and advocacy resources and offers concrete ways people can show their support. The Outrage’s mission-driven purpose is at the heart of its content.

Eevee’s community-building unicycle lessons

Bradley Spence co-founded eevee’s, an electric mobility scooter company, after establishing himself as an expert in Vancouver’s electric mobility community. He became particularly well-known for electric unicycles, hosting group rides and publishing reviews of accessories.

Bradley knew some customers would be intimidated by Eevee’s one-wheeled vehicle, so he invested in educating the community. Eevee offers free electric unicycle classes every weekend, where people are invited to reserve a spot with up to three other friends. The shop is designed to accommodate these classes, and offers customers a dedicated area to learn and try out unicycling. These classes are many customers’ first experience with an electric unicycle, and whether they come with friends or meet new ones, Eevee aims to continue to grow Vancouver’s PEV community.