The best way to persuade customers to come back is to make them feel you care about them.

Yes, the customer experience counts. Bang for the buck, standout service, and quality products are all factors. But the most powerful incentive for repeat business is always the emotional one: Customers will return when they feel personally connected to you and your company.

That's the idea behind relationship marketing. By investing in efforts that develop one-to-one connections with customers, you build personal relationships that lead to long-term loyalty.

"Relationship marketing is all about keeping customers or clients happy, loyal, and full of praises," says Jean Biri, who runs Groupe Biri, a strategy consulting firm for entrepreneurs, based in Quebec.

"A well-executed relationship marketing plan will increase business as customers and clients buy more and often and spread a positive message to the marketplace," she says.

Defining the practice of relationship marketing

"Relationship marketing," according to Wikipedia, "… emphasizes customer retention and continual satisfaction rather than individual transactions and per-case customer resolution." It is marketing that targets specific customer needs and interests with information about products, rather than marketing that primarily focuses on acquiring new customers based on broad demographics and prospects.

For Chris Hurn, co-founder of Mercantile Commercial Capital, relationship marketing is fairly simple:  "It's letting your customers regularly know that you're thinking of them and how you can help them."

Based in Altamonte Springs, Fla., his company provides financing for commercial properties to small-business owners through SBA loan programs. "We have a very transactional small business," he explains. Clients qualify for a loan and then move on.

Yet he has learned that maintaining an ongoing relationship with past clients can pay big dividends:  "Referrals are the backbone of our business."

Once a quarter, along with gifts of informative books or CDs that go out to the entire client list, Hurn includes a referral form that clients can send back either electronically or via surface mail.

The company also e-mails a monthly newsletter and hosts an annual customer appreciation day. "It's become the corporate party of the first quarter in our hometown, because we make sure to honor our clients and we use the party to raise money for charity," he says of the event.

As a result, Hurn says, "Over 80 percent of our business has come from referrals."

Leverage the customer relationship with affordable online tools

Even so, one-to-one attention to customers isn't easy. It requires considerable ongoing effort and resources that many small businesses find challenging.

At the same time, the pace of consumer demand keeps accelerating. Every industry now moves on fast-forward and speed-dial. If you cannot quickly respond, customers may balk or walk. You need to know which customers deserve your personal attention and which, simply, do not.

The solutions to such challenges are today’s affordable online marketing tools, such as the E-Mail Marketing  and Contact Manager  features of Office Live Small Business.

"By managing an effective database and comparing that to your bookkeeping records, you can identify the top 20 percent of all your clients who are probably generating 80 percent of your revenues," says Nancy Michaels, a small-business coach in Concord, Mass., who works with women entrepreneurs. "Then you can primarily focus on this top 20 percent."

Contact Manager   lets you import your customer data  from Microsoft Outlook and other files into an electronic database. You gain instant access to your full customer list and contacts, including personal preferences and purchasing histories.

That goes a long way to helping you stay on top of customer needs. It's also invaluable for efficiently developing personalized pitches for different customer segments. (Learn more about personalizing your marketing pitch.)

By logging in to Contact Manager via a Web browser, you can monitor customer interactions and get an integrated, single view of all your customers and prospects. You can also check individual accounts and swiftly consider opportunities on the spot.

For example, let's say one of your top customers is asking for a 15 percent discount. A fast review of his account in Contact Manager tells you that he's way overdue on paying outstanding bills. Maybe suggesting a quid pro quo is just the ticket: Offer 15 percent off but only in exchange for a check this week to pay the earlier bill. Or maybe, you just say, "No." Because after checking his account in Contact Manager, you notice that the customer’s sales have fallen off dramatically in the previous six months. Without that review, you wouldn't be operating on timely information.

Smart tactics and pitches

Once you're up and running with Contact Manager, you gain the ability to harness much easier e-marketing options.

For example, now you can:

• Create a regular e-mail newsletter: The e-bulletin (always opt-in, of course) can go out to either your entire list, your top-tier customers for premium offers, or exclusively to new prospects. Contact Manager allows you to electronically slice and dice your customer database to generate automatic e-mail messaging. (Learn more about creating e-mail calls to action.)

• Trigger automatic e-mail in response to specific events: "Use auto-responders," says coach Michaels. Contact Manager provides this capability and gives you quick access to purchasing histories. "So when a customer purchases something from you online, you have a series of touch points where you can refer to the product or service he or she purchased and suggest others they might be interested in reviewing." In other words: automatic up-sell e-mails. You can also trigger an internal e-mail to a salesperson whenever customers access certain products or services. That can lead to timely follow-up calls.

• Respond to customer dissatisfaction: Small-business owners often have the unfortunate habit of disregarding customer complaints. They see complaints, at best, as the price of doing business—and, perhaps worse, as a lack of appreciation for their hard efforts. But when a customer complains, it is uncensored feedback. Complaints offer valuable insights into how to provide better customer service. They allow you to implement exactly what customers want.

Input these comments into your customer contacts, and then review once a month or so for course corrections.  You may also consider having a form on your Web site—or a special e-mail address on your newsletters—for customers to provide feedback.  In other words, make it easy for them to talk to you.  And make sure that you respond without delay.

• Prospect and up-sell at the same time: "We offer customers $25 off their next purchase for every new customer they send our way," says Dawn Verbrigghe, founder of Moi-Meme Attire, a New York-based custom apparel business for professional women.

• Make it one-to-one: In addition, says Verbrigghe, the Moi-Meme customer database gives reminders of customers' husbands' names, employers, and more. "Then we may greet them personally each time they arrive. We also keep track of birthdays and graduations, so we can recognize them on those dates."

Begin your relationship marketing effort by setting up E-mail Marketing and Contact Manager tools. Within a day, you can get your customer database up and ready. After that, it's easy to start with simple e-blasts (don't forget the opt-in). Then you can build from there.

Just remember: If you want customers to come back, you need to show them you care.