What Are The Benefits Of Relationship Marketing

Relationship Marketing

One of the most expensive and difficult tasks facing any business is acquiring new customers. Acquiring a new customer can cost five times as much as retaining an existing customer. Research has shown that 2% increase in customer retention can decrease costs by as much as 10% for a business. To retain current customers, businesses engage in relationship marketing strategies to continually attract repeat business. The ultimate goal for every business is to turn every new customer into a returning loyal customer. Relationship marketing is about forming long term relationships with customers rather than trying to persuade a one-time sale. Relationship marketing tries to encourage customer loyalty by providing excellent products

This might be something that McDonald’s might want to consider as many corporations are focusing a lot more on relationship marketing. There are many benefits of relationship marketing. For example a benefit of relationship marketing for a company is that there are no acquisition costs which are far higher than retention costs. Good relationship marketing means that a company is less likely to need to offer incentives such as discounts to its customers. Loyal customers tend to be less price sensitive and are usually happy with the value they are getting. Good relations with customers will result in loyal customers recommending the company to other customers (referals). Companies receive free advertising through word-of-mouth from their loyal customers. Also individual revenue growth exists as trust increases. Other benefits of good relationship marketing is that there is increased purchasing from loyal customers. Repeat purchasers tend to spend more each quarter/year as the relationship develops overtime. There are lower costs with effective relationship marketing as many marketing and administrative costs are once off. Customers require less personnel attention because the customer knows the service process better; therefore they have less questions and problems. The biggest benefit of good relationship marketing is that a business achieves employee

McDonald’s is a big formula that is broken down into little steps that enable McDonald’s to operate at an international level. McDonald’s has made itself largely known by being present and easily accessible in 121 countries with over 36,000 restaurants.

McDonald’s is one of the few corporations that have been able to highlight both the benefits of standardisation and adaptation. McDonald’s has skillfully managed its franchise model by delivering consistent customer service and branding to all of their customers around the world. McDonald’s chose convenient locations for all of their franchises. This includes airports, shopping centers, busy streets, etc. In the entire history of McDonald’s, not once has a franchise closed down. This alone proves that McDonald’s does things right and have made the necessary adaptations in order to accommodate their customer’s preferences and needs in each country. This is amazing considering that there are so many different cultures with completely different preferences and needs. McDonald’s serves on average over 65 million people worldwide each day. This is far more than any of their competitors