Marketing firm: Relationships drive profitability
June 17, 2010
Grand Valley Business Times – By Phil Castle, Business Times
Tom Sawyer believes that profitability increasingly depends on relationships.
And business that employ marketing strategies that promote relationships with their customers enjoy increased sales and higher margins at lower costs, Sawyer said.
The president of a Grand Junction-based marketing, advertising and business development firm, Sawyer led a presentation on marketing at a forum for Grand Valley business owners and executives.
First National Bank of the Rockies sponsored the presentation by Ryan, Sawyer & Whitney.
Pete Waller, president and chief executive officer of First National Bank of the Rockies, said his bank has worked with the partners of the firm for more than a decade in developing a brand for the bank as well as customer relationship strategies that reflect a changing industry and marketing environment. ìWe think it’s going to pay good dividends down the road,î Waller said.
Cat Coughran, vice president of business development with Ryan, Sawyer & Whitney, said as marketing has changed, power has shifted from companies to customers.
With traditional marketing, companies relied on the four Ps of product, price, placement and position. Coughran said those factors since have become the four Cs of content, context, connection and community.
While companies used to control marketing messages in convincing customers to buy their products and services, customers now choose and filter messages, Coughran said. Moreover, the Internet has enabled customers to express their own opinions and share them on a global scale.
In the process, customer behavior has changed, Coughran said.
Customers expect companies to communicate with them and to deliver the products and services they want, Coughran said.
At the same, the Internet and information technology allows companies to more efficiently enter and penetrate niche markets, increasing sales while decreasing the cost of each sale, she said. So-called challenge brands have developed to compete for market share.
The most successful businesses take advantage of the Internet and technology to gain information about their clients to not only deliver the products and services they want, but even anticipate what they need.
Sawyer said relationship marketing can drive profitability through a combination of high tech and high touch. Leveraging the Internet and such social media sites as Facebook can help to increase sales and penetrate niche markets, but at a lower cost. Particularly popular brands within niches can command higher prices, he said.
Relationship marketing also results in great customer retention—and it costs less to retain existing customers than develop new customers, he added.
Dan Ryan, creative director at Ryan, Sawyer & Whitney, said the process to develop relationship marketing strategies starts by developing a brand. ìBrand is build from the inside out,î Ryan said.
Among other things, brand takes into account the creation of a business and its unique attributes, what a business stand for and the experiences customers encounter, Ryan said.
It’s then a matter of assessing brand assets, the use of traditional and digital media, sales systems and profitability—along with the needs of customers.
Coughran said relationship marketing strategies that are developed close the gap between marketing and sales.
