The goal of every organization is to have their prospects turn into customers and grow with the business to maximize customer lifetime value.

Best case scenario; have them become your brand advocates. This depends greatly on the stage they are on, the customer’s journey, and the experience they have had with your brand.

Understanding where your customers are in that journey is vital to providing them with the right services and content, managing expectations, and increasing the breadth and depth of your commercial relationship. That said, here are the four stages of your relationship marketing maturity.

Stage 1: Grassroots Online Relationship Marketing

As you’d imagine, the grassroots stage represents the earliest part of relationship building and encompasses basic marketing activities.

At this stage, most marketers aren’t knowledgeable or ready to use sophisticated marketing techniques and mainly rely on the website and basic marketing tools.

Picture a budding company looking to establish a footing in the industry or an existing company switching from outbound to inbound marketing. These companies will likely have no advanced knowledge of inbound marketing and will start at the “grassroots.”

At this stage, you’re mainly interacting with your audience via the website and email.

Email newsletters, in particular, are preferable because they are affordable and easy to set up. Newsletters also reach more than existing customers and are effective at drumming up new business for any company.

Web forms are another tool that businesses use in this phase to reach a new audience.

Forms provide an easier way for businesses to capture their website visitor details—their name, email address, location, preferences, feedback, etc. They are also a powerful tool for website visitors to contact a company, place an order, and send inquiries.

And since the company is operating at the “grassroots,” it’ll likely have a limited number of sales reps supervised by a sales manager or a general foreman.

And since, in most cases, the business is usually at a nascent stage, there is typically no marketing or full-time responsibilities. Website management and promotional initiatives are done in-house or with the help of a small marketing agency.

Common Challenges of Grassroots Online Relationship Marketing

• Grassroots marketing has its fair share of challenges that may limit business growth. One of the top challenges is growing the subscriber base. At this stage, the business doesn’t have the resources (manpower and budget) to reach a wider audience at once. As such, the company may face challenges in growing and segmenting the subscriber base. It may experience growth but at a very slow rate.

• Secondly, the ROI obtained from the newsletter strategy might not be adequate to push the business forward. Businesses often improve ROI through a comprehensive multichannel marketing strategy, which might not be practical at this stage. There’s also the problem of tracking marketing engagement performance.

Opportunities and path to the next stage

Businesses can expand reach and engagement with the following strategies.

• Implementing an E-Commerce Transaction Website

You can up rev up your marketing efforts by launching an e-commerce website. This would allow your customers to complete transactions online and enjoy the many benefits of online shopping.

• Segment Database

Segmenting your database will allow you to create different customer profiles and send personalized communication to each customer segment.

• Rev Up Your Online Marketing Efforts

Launching an aggressive online marketing campaign can go a long way in increasing your subscriber base. Aim to create an online presence on all the major social media accounts and interact with your followers regularly.

Stage 2: Transactional Relationship Marketing

As your knowledge of online marketing advances, you start leveraging the most appropriate mix of marketing variables to drive conversions. You’ll build an e-commerce portal to facilitate online selling and start tracking and measuring conversions.

In addition to implementing an e-commerce portal, businesses at this stage usually adopt the following practices to improve online sales:

– Simplify product search and store navigation
– Optimize the store speed
– Display product recommendations
– Offer multiple payment options
– Offer shopping assistance

Most online businesses are in the transactional relationship stage, even though they may not be aware of it. Marketers optimize their websites for sales and use analytical tools to measure conversions and other relevant metrics, such as cart abandonment rates.

Additionally, businesses increase the modes and frequency of communications with customers to increase engagement. For instance, once a transaction goes through, or a cart is abandoned, the company sends notification emails to the shopper—a strategy that helps to drive engagement and sales.

Usually, the company has a central database that sends an email to subscribers once or several times a month. The company may hire a small in-house team or work with an agency to manage the website and online marketing campaigns.

Common Challenges of Transactional Relationship Marketing

• Businesses in this stage often face many challenges, including a high shopping cart abandonment rate, low repeat customers, and limitations in segmenting subscribers.

• Cart abandonment rate is a common problem among e-commerce retailers. Research from Baymard Institutes shows that 69% of online shopping carts are abandoned. Brands can overcome cart abandonment by simplifying the checkout process and offering help where it is needed.

• This stage is also plagued by the limited ability to personalize customer communication to maximize ROI from email marketing.

Opportunities and path to the next stage

You can overcome these challenges and improve conversions by.

• Improving Shopping Cart Abandonment Rate

Shopping cart abandonment is a phenomenon where a shopper on your e-commerce store adds items to their cart but leaves the platform before making a purchase. Some of the reasons for cart abandonment include:

– Unexpected shipping costs
– Absence of preferred method of payment
– Complicated checkout process
– Unsatisfactory return policy
– Website errors/crashes

Marketers can improve shopping cart abandonment by offering free shipping, adding alternative payment methods, simplifying the checkout process, making the return policy transparent, and fixing website errors.

Writing targeted abandonment emails is another effective way to reduce cart abandonment. It’s by far the most impactful strategy for recovering abandoned carts. According to a 2015 SalesCycle Remarketing report, 44% of abandoned cart emails are opened by users.

• Increasing the Value of Shopping Carts and Re-Engaging Customers

Some practices marketers can engage in to improve the value of the shopping cart would be to send out promotional emails with sales messages related to:

– Free shipping
– Cross-selling
– Up-selling
– Discounting

Marketers can also engage in re-targeting campaigns to engage past customers with new deals to boost sales.

• Segmenting Database

Marketers can categorize their audience by age, demographics, income, location, etc., and provide personalized content to drive engagement. They can also personalize the content on their websites and re-target on social media with relevant, personalized messages related to their purchase history.

Stage 3: Personalized Relationship Marketing

In the transactional relationship stage, the company may grow in size and profitability and move on to stage 3 (personalized relationship marketing stage).

The goal of personalizing your marketing is to cultivate more meaningful customer relationships to foster long-term satisfaction and brand loyalty.

Ideally, you’ll leverage cross-channel messaging to improve engagement and loyalty in the long term. Multiple channels and systems of driving engagement are used, including websites, mobile apps, customer portals, and CRM.

Unlike transactional relationship marketing, which aims to drive conversions, personalized relationship marketing aims to enhance customer lifetime value. This involves marketing initiatives focusing on customer retention and satisfaction over transactions.

Personalization is critical at this stage. Marketers capitalize on personalizing communication per channel based on the available data collected through the CRM. Ideally, at this stage, the company will have several databases containing the customers’ data.

And unlike in the grassroots stage, where the company may not even have an in-house team to coordinate marketing operations, the relationship marketing stage involves large marketing teams with individuals from multiple departments and expertise.

Common Challenges of Personalized Relationship Marketing

• Marketers often face the problem of a high churn rate as the number of customers grows.

• The lack of a unified view of customers and manual labour to aggregate data also stifles growth at this stage. Also, the inability to effectively run multichannel campaigns and personalize triggers and messaging along the customer journey is a challenge to many marketers.

• Some marketers, especially those new to the personalization game, may not know how to manage the customer journey across multiple channels.

• Moreover, personalized relationship marketing requires the cooperation and support of other departments, including IT. For instance, IT support might be needed for setting up and maintaining the marketing stack.

Opportunities and path to the next stage

Brands can improve personalized relationship marketing in many ways, including:

• Implementing Customer Data Dashboards

Marketers can improve the customer relationship journey and increase lifetime value through customer data dashboards. Analytics from the data dashboards give a 360-degree view of the customer and can provide valuable insights into the individual customer journey, channel performance, and more.

• Automating Campaigns

Automation can help marketers to measure what matters, simplify processes, and save time, allowing them to focus more on the tasks that matter.

Stage 4: Integrated Relationship Marketing

Integrated marketing is the highest level of your relationship marketing maturity and integrates communication and interactive experiences geared toward fostering retention, growth, and brand advocacy.

Integrated relationship marketing leverages multiple channels and systems for driving engagement and conversions, including website, mobile applications, loyalty programs, ecommerce portals, customer service, and CRM.

It requires the use of Data Management Platforms (DMP) to process and personalize customer data. This relationship marketing stage involves coordination between departments and a large sales team for lead generation and social selling.

Marketing and Sales usually rely heavily on support from IT to develop use case for the DMP, provide analysis capabilities (for dashboards and predictive analysis with AI algorithms) and manage data security and integrity.

Through automation, marketers are able to launch multiple campaigns across channels and manage them effectively as the can personalized multichannel communications through robust algorithms tapping into available 360-degree customer data.

Common Challenges of Integrated Relationship Marketing

Despite the many advantages of Integrated Marketing, companies often face a number of challenges when trying to implement and manage it effectively.

• One of the biggest challenges is customer churn, or the loss of customers over time. This can be caused by a number of factors, including poor customer service, a lack of personalized communications, or a lack of engagement with customers. Additionally, companies often struggle to support a wide variety of audiences, beyond just leads and customers.

• Another major challenge is the high complexity of systems and data sources. With multiple channels and systems in place, it can be difficult to orchestrate interactions and campaigns for multiple audiences on multiple channels. This can lead to a lack of consistency and coordination, which can negatively impact customer relationships.

Opportunities and path to the next stage

Despite these challenges, there are many opportunities for companies to improve their Integrated Marketing efforts.

• Automation

One of the biggest opportunities is the ability to more easily automate campaigns where current systems lack flexibility or access to aggregated customer data to operate effectively. This can be done by using light touch integration tools that allow for faster and more efficient campaign launches.

• Experimentation

Another opportunity is the ability to develop agility when launching engagement campaigns. This can be done by using rapid experimentation to develop proof of concept for new campaign initiatives before integrating them into the current Martech stack. This allows companies to test and refine new ideas before committing significant resources to them, reducing the risk of failure.

In summary

The Four Stages of Your Relationship Marketing Maturity guide is a valuable tool for organizations to understand their customer relationship management level of sophistication and identify common challenges they may face as well as understand the path of opportunities for growth to improve their customer relationship management strategy.