It seems retailers just can’t catch a break. Having only just begun to regain footing after a disruptive few years marked by pandemic closures, supply chain challenges, and a labor pinch, we now have a potential recession on the near horizon.

Compounding matters is the changing landscape of digital marketing business. Google is moving away from third-party cookies, while Apple has implemented far-reaching anti-tracking and privacy measures. The trend is clear — marketers need new ways to efficiently reach and consistently engage customers at scale.

Unsurprisingly, retailers are making every effort to rethink both their budgets and their strategies. As a result, one area of marketing poised for continued, if not increased, investment is relationship marketing, as it speaks to both concerns.

Consider the following global trends that surfaced in Marigold’s Retail Forecast: The 2023 Consumer Trends Index:

• 60% of global consumers are very pessimistic about the economic outlook.
• As a result, 51% are doing more research before buying, with 47% waiting for items to go on sale and 50% “show rooming” (browsing in-store before buying online or elsewhere).
• Nearly half (49%) of global consumers are frustrated with irrelevant content. That means the importance of understanding customer needs and communicating with them appropriately could be the make-or-break difference between which retailers survive and which don’t.
• 46% of consumers said they will rely more on loyalty program benefits in 2023 before making a purchase. As pursestrings tighten, the benefits and bargains offered by loyalty programs can carry retailers through the toughest of times.
• 52% of consumers said they have made a purchase directly as a result of an email they received within the last year, while 55% used their mobiles to research potential purchases.

Relationship marketing speaks directly to these trends by focusing on developing personalized conversations with each customer through a continuous value exchange across multiple channels, as opposed to broadcasting largely undifferentiated messages to large groups of people, hoping some will notice.

For example, Danish retail giant, Salling Group, leverages Relationship Marketing to interact with its customers on a deep level. It offers multiple types of coupons, from basket-size coupons to category coupons and coupons customers can personalize to their favorite products. All of which give Salling Group important information about why customers buy and what they like. But the company also takes the next step and learns what customers don’t like as well. Its Digital Refund feature allows customers to simply take a picture of a product they didn’t like and issues a refund directly through its mobile app.

But getting to this stage doesn’t happen overnight. Successful relationship marketing requires four distinct stages: Acquisition, Engagement, Personalization, and Retention. Collectively, they trace the journey from an unknown consumer to a loyal advocate, and can be the key to sustained success for your business.

Acquisition:

You can start a consumer relationship pretty much as you do in person, by starting a conversation. Ask questions to understand a visitor’s wants and needs. Be honest about what you’re doing. And give them something of value as they give value to you. As you gather the information they share, create a new record on each visitor, then build.

Layer in web-browsing behavior, previous online and in-store transactions, and use of your app, site and loyalty programs. This helps you personalize offers and improve messaging, while reducing advertising costs. Remember, data acquisition and enrichment never stops. You’re cultivating relationships. You need to be an active participant.

Personalization:

The next step is personalization. Use data signals to trigger customized messages, content, and offers. Machine learning can spot consumer patterns across channels, so your system can respond consistently, quickly, and comprehensively. This advanced decision-making helps customers feel understood, and that their data is safe. It also positions you to respond smartly in the moments just before and after a purchase. If a customer is abandoning your site or cart, can you deliver an offer or discount that brings them back to convert a sale? Listening across channels allows you to deliver crucial information wherever the customer is, and respond smartly.

Engagement:

Then, expand your relationship across all channels – including email, SMS/MMS, website, apps, wallets, chatbots, and direct mail – and build a consistent experience everywhere. Pay attention to your customers’ real-time signals. You can build customized journeys for each customer based on their needs, delivered at the best time. Even mass messages can be optimized by dynamically segmenting your audience. To get scale and streamline your work, consolidate data across all your channels.

Loyalty & Retention:

This is the Promised Land, where customers trust you to deliver consistently useful and delightful experiences. These sustain a powerful long-term, two-way relationship, built on emotion and connection. The levers of loyalty can be as simple as sending a text message acknowledging a visit, or providing fun or useful content. Identifying your best customers, and keeping them engaged, creates powerful brand ambassadors. Even a 5% improvement in retaining these top customers can translate to a 95% jump in profits.

The modern loyalty program moves beyond points and rewards to include personalized experiences, gamified status achievements, and recognition that tells customers they’re seen and appreciated. Remember, the real customer value isn’t in the first transaction; it’s in all the subsequent ones.

Terri Gaughan has over 30 years experience in the loyalty and marketing industry designing, optimizing and enabling best customer strategies and experiences. Her expertise spans across both consumer markets and B2B programs where she has served clients across all verticals bringing a deep understanding of alternative consumer identification and segmentation approaches and consumer engagement management.

As Director, Enterprise Strategy at Marigold, she is responsible for designing customer and B2B-focused, data-driven, financially sound loyalty marketing and best customer strategies intended to drive profitable, incremental and desired behaviors while building emotional connections through engagement.

Terri has an MBA in Market Research and Quantitative Analysis and is a proud member of The Loyalty Academy where she is recognized as a Certified Loyalty Marketing Professional (CLMP).