Identifying the pros and cons of relationship marketing helps businesses to make a clear decision whether the relationship marketing method is suitable for the profit maximization of their product. Relationship marketing has become a new trend in the modern business world that has the ability to create a long-term bond with the customer by providing ultimate customer satisfaction.
Since the concept of relationship marketing is aiming to create customer loyalty and to retain the customer with the business for a long time through creating a unique bond with the customer, it is important for the businesses to understand the pros and cons of relationship marketing and the impact it can create on the sales of the product.
Based on the product type, market type, and customer preference type, the marketing method that should be used to achieve a competitive advantage in the target market can differ. The marketing team of the product has the responsibility to analyze each marketing method that is suitable for the product and find the best possible marketing method that has the capability to provide maximum return.
The pros and cons of relationship marketing can be elaborated as below.
Pros of Relationship Marketing
01. Possibility to sell more
Generally, returning customers purchase more than first-time customers. Due to the pleasant relationship created through relationship marketing, the per-person average sales can be increased. This can help the business to increase sales as well as customer loyalty.
02. Works as an advertising method for the product
People who are completely satisfied with the product tend to leave good reviews for the product and they communicate to others in the society about the positive experience they gained from the product. This can work as a word-of-mouth advertising method for the product and can be considered as one of the most powerful methods to gain a strong customer base.
03. Ability to increase sales with a minimum investment
Once the customer becomes loyal to the product, they tend to come back for the product even without advertising. Apart from that, loyal customers tend to purchase new and upcoming products as well due to the positive experience they have gained in the past. This saves the business from costs of advertising while increasing the sales revenue.
Cons of Relationship Marketing
01. Priority is not given to new customers
Since the relationship marketing concept prioritizes creating loyalty on existing customers, new customers can be treated as a secondary commodity to the business. Retaining existing customers and supporting them by giving them a priority can make the new customers feel ignored. However, as any business needs new customers to meet its budget goals, this can create an adverse impact on the sales of the business.
02. Adverse impact caused by negative information
The world is highly relying on information and social media. When conducting a relationship marketing campaign for the product, a single negative comment on the product can create huge damage to the business’s reputation and sales. Since many customers are expecting short-term, immediate values, to create brand loyalty through relationship marketing, the business should be highly careful about the negative comments and how to handle negative comments from the customers.
03. Requires time for the marketing method to be successful
Trust cannot be built overnight. Gaining customer trust takes a certain time for the business. Many customers believe that a brand or product that needs to maintain a relationship with them has to make time for them always. The mutual understanding between the business and the customer should grow over time, by getting to know more, clearing doubts about the product, asking questions, understanding the customer behavior patterns, and understanding the product functions.
This is a step-by-step process and requires a certain amount of time-based on the nature of the product. Keeping the customer attracted to the product until loyalty is established is a difficult task for the business in the competitive market.
The above-elaborated pros and cons of relationship marketing can help the business to analyze and understand whether it is the ideal marketing method to promote the business in the target market.