Relationship marketing - Wikipedia
The buyer-seller relationship, the salesperson's role, the importance of the customer's purchase decision, the Types of go-to market strategies .. One type of loyalty, refers to an emotional attachment to a brand, company or salesperson. Traditional marketing refers to relationship marketing in such an aspect that it is the method of organizing marketing on the principle of distribution, increasing. It kind of implies the word somewhat but does not include the actual word and it should for SO: How do you define Relationship Marketing?.
The first involves primarily introducing additional financial benefits into the relationship with the consumer. The second approach is to introduce along with financial additional social benefits.
At the same time, the company's staff is working to strengthen social ties with consumers by examining the needs and desires of each of them and then individualizing and personalizing their goods and services. The third approach to creating a strong relationship with the consumer is to connect the structural links along with financial and social benefits. For example, airlines offer special reservation systems for travel agents.
What Is the Relationship Between Marketing and Utility Now in the history of marketing, a complete circle is completed: The consumer has an "own" brand or store, and the store has a "regular" and loyal customer.
The opportunity to count the total cost of all repeated purchases of a regular customer for the average time of communication with him, which arose in the early s, gave rise to a burning desire for various companies to reliably establish a relationship with the client.
After confirming this fact, the desire to identify and retain this gold twenty has become even stronger. It is about programs for forming loyalty to a store, a firm, a brand, creating a club where the general desire is to use the services of a firm, to buy goods from a particular store or a particular brand.
Relationship Marketing | What is Relationship Marketing?
The company that created such a club gets great benefits. It knows her best customers, knows what they are buying and how much they spend. It can be sure that a member of the club will bring his friends and acquaintances. It will be able to produce or order goods in the light of the future interests of buyers. Members of the club are constantly being stimulated financially and morally. Who Employs Relationship Marketing? Many types of companies have something to gain from developing long-term relationships with their customers.
Smaller businesses often serve a steady stream of regulars, and make little effort to draw in new customers. Imagine a small restaurant that sees a steady stream of business from the morning commute.
Their daily presence is a large part of the business that restaurant does every day. Larger companies typically invest the most in carrying out sophisticated relationship marketing campaigns.
In some major companies, relationship marketing is a strategy that affects every department with a client facing purpose sales, customer service, shipping etc. Industry leaders constantly face competition from new companies who claim to provide similar goods with a higher-quality level of service. Holding onto their existing customers is the only way they can maintain their position at the top of their industry.
This is true for businesses in all industries, from cell phones to baby food. When the company changed the font in their ubiquitous catalog, Ikea lovers took to the Internet to air their complaints. Rather than alienate their customers for a trivial reason, Ikea changed the font back in the next catalog. Direct Recruitment — The direct mail marketing firm sends out handwritten birthday cards to clients and associates every year.
This simple, personal touch helps clients feel like Direct Recruitment cares about them as people rather than simply consumers. American Airlines — The airline maintains a comprehensive frequent flyer program that rewards customer loyalty with the promise of free flights, upgrades, and discounts.
Dell — Dell computers created a special online store for high volume corporate customers. By tailoring the ordering process to the specific customer's needs, Dell was able to expedite many of the hassles corporate technology buyers face.
Providing a higher level of service leads to increased loyalty. Vyvanse — The makers of the popular ADHD drug created an extensive online portal that included videos, forums, expert articles, and mobile apps to help those who suffer from ADHD.
Rather than relying on the strength of the product alone, the drug makers created a place for users to gather and interact that was linked back to the company. Sites like Facebook and Twitter make it fast and easy for companies to communicate information to their customers. But in order to make this a long term relationship, the company has to get their customers to become regular followers of their social media profiles. As the chart shows, most customers do not elect to follow a company out of mere curiosity.
Companies can increase their social media followers if they offer incentives like coupons or insider information.
- Relationship marketing
Relationship marketing can involve revising major aspects of the way a company conducts business. In turn, happy employees feed back into better customer satisfaction in a virtuous circle. Relationship marketers speak of the "relationship ladder of customer loyalty ". It groups types of customers according to their level of loyalty. The ladder's first rung consists of "prospects", that is, people that have not purchased yet but are likely to in the future.
This is followed by the successive rungs of "customer", "client", "supporter", "advocate", and "partner". The relationship marketer's objective is to "help" customers get as high up the ladder as possible.
This usually involves providing more personalized service and providing service quality that exceeds expectations at each step. Customer retention efforts involve considerations such as the following: Customer valuation — Gordon describes how to value customers and categorize them according to their financial and strategic value so that companies can decide where to invest for deeper relationships and which relationships need to be served differently or even terminated.
Customer retention measurement — Dawkins and Reichheld calculated a company's "customer retention rate". This is simply the percentage of customers at the beginning of the year that are still customers by the end of the year. This ratio can be used to make comparisons between products, between market segments, and over time. Determine reasons for defection — Look for the root causes, not mere symptoms.
This involves probing for details when talking to former customers. Other techniques include the analysis of customers' complaints and competitive benchmarking see competitor analysis. Develop and implement a corrective plan — This could involve actions to improve employee practices, using benchmarking to determine best corrective practices, visible endorsement of top management, adjustments to the company's reward and recognition systems, and the use of "recovery teams" to eliminate the causes of defections.
A technique to calculate the value to a firm of a sustained customer relationship has been developed.
What Is Relationship Marketing and Why It Should Be Used by the Modern Business?
This calculation is typically called customer lifetime value. Retention strategies may also include building barriers to customer switching.
This can be done by product bundling combining several products or services into one "package" and offering them at a single pricecross-selling selling related products to current customerscross promotions giving discounts or other promotional incentives to purchasers of related productsloyalty programs giving incentives for frequent purchasesincreasing switching costs adding termination costs, such as mortgage termination feesand integrating computer systems of multiple organizations primarily in industrial marketing.
Many relationship marketers use a team-based approach.
The rationale is that the more points of contact between the organization and customer, the stronger will be the bond, and the more secure the relationship.
Application[ edit ] Relationship marketing and traditional or transactional marketing are not mutually exclusive and there is no need for a conflict between them. In practice, a relationship-oriented marketer still has choices, depending on the situation. Most firms blend the two approaches to match their portfolio of products and services.
Social bond refers to the relationship established through the collective blood relationship between people. Relationship marketing is to establish and strengthen these two kinds of bonds, especially the structural bond, so as to strengthen the relationship with clients and lock them in.
Morgan and Hunt made a distinction between economic and social exchange on the basis of exchange theory and concluded that the basic guarantee of social exchange was the spirit of the contract of trust and commitment. The traditional marketing concept of one-time transaction begins to transfer to the concept of relationship marketing.
What Is Relationship Marketing? Its Purpose, Profitability and Levels of Relationships.
This is the transition from economic exchange theory to social exchange theory. The theoretical core of enterprise relationship marketing in this period is the cooperative relationship based on commitment.
They define the concept of relationship marketing from the perspective of exchange theory, and emphasize that relationship marketing is an activity related to the progress, maintenance and development of all marketing activities. Shows that trust and commitment is a trading enterprise and the basis of marketing activities to establish a long term good relations, also is the factors affecting the basis of cooperation for both sides, moreover the relationship effect of other factors include: Coptics and Wolf believe that relational marketing is the marketing of databases.
They think, the enterprise want to be able to continue to improve the effect of relationships with customers, when access to the data and information to improve the effect of relationship with the customer's cost is low, enterprises will pay the cost to improve relations with customers, at present, due to tell the development of communication technology and Internet technology, makes the information costs have dropped substantially, so the argument that relationship marketing is for database marketing is increasingly valued, this view emphasizes the relationship marketing is through the Internet technology database data lock with the customers, to establish and maintain good relationship with customers.
Liker and Klamath introduced the relationship between enterprises and suppliers into the scope of relational marketing, believing that in the marketing process, manufacturers make suppliers assume corresponding responsibilities, and enable them to give play to their technological and resource advantages in the production process, which can improve the marketing innovation ability of manufacturers. Lukas and Bryan a. Ferrell believe that the implementation of customer-oriented marketing concept can greatly promote the innovation ability of marketing, and at the same time encourage enterprises to break through the traditional relationship model between enterprises and customers and propose new product Suggestions with technical feasibility.