Building Customer RelationshipsIncrease your sales through better relationships with your existing customers.

Q:I've been debating with my marketing advisors for some time the implications and importance of relationship marketing on a marketing strategy. Do you think that relationship marketing represents a new paradigm and should replace the marketing mix paradigm? Or is it just a fresher concept of the traditional marketing mix way of dealing with things?

A:Our lives are generally organized around long-term relationships-a favorite dry cleaner, hair stylist and family doctor come to mind. It's easier to stay with the companies and products we're used to, and as consumers, we respond well to communications programs that build loyalty and earn our trust. So a successful marketing strategy should include an integrated marketing campaign that builds trust with prospects through the selling process and maintains customer service relationships with them long after the initial sale.

A relatively new term for an old concept, relationship marketing (or customer relationship management, CRM) formalizes the process of identifying your best customers and, through communication and rewards, builds a relationship with them that increases their lifetime value. It doesn't replace prospecting tactics, including advertising, in the marketing mix. It's about using today's high-tech tools and an ongoing communications program to enhance your return on investment in marketing to existing customers.

To start out, you'll need a solid database-the essential tool to begin a CRM program. You can use top-selling software such as GoldMine 5.0 fromFrontRange Solutions Inc.orACT! 2000 5.0from Symantec Corp., both priced at about $180. These easy-to-implement programs give you and your staff shared access to customer and prospect information; let you log in calls, meetings, to-do lists, letters, faxes and e-mails; perform mail merges; schedule the steps in your marketing strategies; and evaluate the results of your marketing programs. You can also perform the same tasks anytime, anywhere using one of the new online subscription CRM services such as Salesforce.com, which is priced at $50 per month for your first five users.

Once your contact management program or subscription service is in place, segment your database and identify your best customers. Then design a program that includes special services, offers and communications designed to build loyalty. Newsletters, direct mail, e-mail and fax-back programs are excellent ways of maintaining communication with customers via marketing tools. But don't forget one-on-one contact by phone and in person. By integrating sales and marketing in this way, you'll improve customer retention and increase your company's revenue.