Relationship marketing

Don't take it personally, it's just business. On the contrary, personal relationships are key to success in any business, especially small businesses.

I'm not talking about maintaining close friendships with all of your customers, just enough to develop the kind of relationship that gives them trust in your ability to provide them a quality product or service. This kind of relationship can go a long way. Here's why.

Your best source of advertising

Take a look at any successful small business. Chances are, there is more to their success than just having the best product or cheapest service. They will tell you that most of their business comes from word of mouth and referrals from their best customers.

Advertising is expensive and when a business can let its customers do it for them, this is a benefit for two reasons. First, advertising expenses are reduced and turned into profit instead. And second, people are more likely to do business with someone referred by a friend, co-worker, or acquaintance than they are as a result of an advertisement.

People do business with people they like

This is especially true in business to business marketing. If you are selling your product or service to someone who has to make a critical purchasing decision, that person must have a high level of confidence and trust that you can do the job.

If this is a potential customer, that confidence and trust can be established by getting to know the key decision makers better. Often this entails only a phone call or meeting once in a while to keep in touch, find out what business opportunities might exist, and make small talk. Over time, you become more of a known entity, and that confidence and trust will help you get business.

This type of marketing strategy, referred to as "relationship selling", may take a while to generate an initial sale, but often results in finding customers who will be loyal to you for the long term.

Effective networking
Traditional sales techniques such as electronic or print advertising, direct mail, or telemarketing often don't yield long-term loyal customers. This is because the initial contact is based on a specific purpose, such as a response to an ad. When the initial contact is through a mutual acquaintance, there isn't as much pressure to prove yourself because you already have that recommendation.

One way to build a customer base through relationship selling is to network with other businesspeople in organizations such as chambers of commerce or leads exchange groups.

The chambers have a local focus toward businesses in the immediate town or city, such as Concord or Walnut Creek, and their mission is generally to promote commerce in their area. Although they do become active in important local business issues such as taxation or zoning, many of their meetings are social events to help local businessowners meet eachother.

Leads exchange groups are oriented toward helping businesspeople find new customers by maintaining a structured group of participants who are obligated to help find business leads for other members of the group. Since the group typically meets at least once a week, members get a chance to know eachother and develop the kind of trust it takes to recommend them to their customers and business associates.

These two types of organizations are good examples of how small business people can market their businesses through relationship selling rather than using the more traditional forms of advertising. Granted, this kind of marketing probably takes more time than the traditional methods, but depending on the type of business you're in and how sociable a person you are, the benefits can be outstanding.