Relationships

Customer Relationship Marketing

Customer Relationship Marketing

INTRODUCTION

Relationship management is a special field of its own, it is as important as preserving and enhancing the intangible asset known as “goodwill” as the management of hard assets.  The fact that it is probably harder to do is that much more reason hard effort be expended to do it                                                                                                                                                                                                                      -Theodre Levitt.

Relationship Marketing is one of the hottest trends in marketing today. Relationship marketing is a philosophy of doing business.  It is gaining increasing popularity in the business world. Relationship Marketing is the process of attracting, maintaining and enhancing Relationship With key parties – customers, suppliers and distributors in order to earn and retain their business and honor their long term preference. The main purpose of relationship marketing is to build a unique company asset known as ‘Marketing Network’. The underlying idea is to simply build an effective and efficient network of relationship with key stakeholders and the profits will follow automatically.

Two Basic tasks;

• Increasing the number of those factors which lead to customer satisfaction and loyalty
• Avoiding those factors, which lead to customer dissatisfaction and brand switching;

Objectives of Relationship Marketing

• The primary objective of relationship marketing is to build and maintain a group of committed customers
  • To find out the group of new customers, which hold better promise than the others. 
  • To know the Loyal customers can be even better customers if they buy more products and Services

• To know about customers move from one life cycle stage from another, needs
• To know about buying pattern fluctuates and product choices shift.
• To know the customer  relationship of the Company should recognize such change of needs and wants
• To achieve this firm will focus on attraction and retention of the customer
• To enhancement of customer relationship.

Importance of CRM  

• CRM is an integrated information system that brings together information about consumers, marketing effectiveness, sales and market trends.
• It enables business to combine technology and human resources to understand the consumer behavior.
• Relationship marketing uses improved information technology to regularly interact with firm consumers and to base product offerings on the consumer’s buying habits.

Traditional Marketing V/S Relationship Marketing

                        The traditional marketing, known as Transactional marketing focused. On mass production, mass marketing and standardized products and service. Relationship marketing, the focus has now shifted to highly customized and personalized products and service.

The Difference Between Traditional and Relationship Marketing

 

TRDITIONAL

RELATIONSHIP MARKETING

1.

Prominence on single sale transaction.

Prominence on retaining the customers.

2.

Quality of the product is the sole

 Responsibility of production.

Quality of the product is a concern for everyone.

3.

Direction on product or service features.

Direction on product or service benefits.

4.

Little importance on customer service

Strong importance on customer service.

5.

Short time scale.

Long time service.

 

Model of Relationship Marketing

                        The Model of Relationship Marketing the cost of acquiring a new customer is almost ten times the cost of retention of a customer which means that it’s much easier and more inexpensive to make an additional sale to an existing customer than to make a new sale to a new customer. As per Pareto’s Law, 80% of the total sales come from 20% of the customers. The need for relationship marketing, the core of which is customer retention.

 Relationship Marketing Model

INPUT

PROCESS

OUTPUT

Value–added products and Service

 

High customer satisfaction

One-on-one relationship

 

Increased customer share

Individual care and attention

Relationship Marketing

Lower marketing costs

Special facilities and services

 

Positive word –of –mouth

Structural ties

 

High brand equity

Information sharing

 

High customer loyalty

 Benefits of Customer Relationship Marketing:

• It gives good image
• It developed brand equity, customer retention and loyalty.
• It Builds goodwill in the market,
• It Keeps competitors away from customers’ sight,
• It gives more customer satisfaction,
•  Satisfied customers bring other  potential new customer
• Facilitates employee retention for strong base of satisfied customers
• Positive word of mouth
• Turns customer into your friend.

To Customers:

               Customers will remain loyal to a firm when they receive greater value relative to what they expect competing firms. 

• Customers will comfortable in the relationship.
• Firm knows what to expect the Customers,
• Customers has a good working relationship with the organization
• Customers know Firm will be taken care of even for an unusual request.

To Confidence Benefit:

               These benefits comprise feelings of trust or confidence in the provider, along with a sense of reduced anxiety and comfort in knowing what to expect.

To Social Benefit:

               In some long-tern customer – firm relationship a service provider may actually become part of the consumer’s social support system. 

 Benefit to the Organization:                                       

• To Increase in purchase:

The consumers are satisfied with the quality and services provided by the company they will give more business to the firm.

• To Lower Costs:

               It is important fact for retaining old customers and gets new customers. Services are normally complex and difficult to evaluate before actually buying it, consumers most often look to others for advice on which providers to be considered.  Satisfied, loyal customers are likely to provide a firm with strong word-of-mouth endorsements.

Suggestions for Effective Relationship Marketing            

• Companies should set up an independent relationship marketing department.
• Confidence should be placed not only on technical people but also on relationship managers.
• Provide additional compensation and incentives to sales personnel dealing with customers.
• There should be an integrated marketing system to build relationship with customers , suppliers, dealers and other parties
• Companies should keep a look out for value building approaches on an ongoing basis
• Regular interaction with customers
• Be proactive, not reactive in marketing the product or service.

Conclusion

            Modern marketing revolves around the customer.  It is an old and by-now universally accepted concept that the Customer is the King.  Customers are treated as the eyeballs of all major companies in the world. The primary of relationship marketing is to build and maintain a group of committed customers who are profitable for the organization.  With the advent of relationship marketing, companies are prepared to do anything and everything to keep their customers happy and satisfied.  A satisfied customer is not going to shift his loyalty to the competition’s grab for additional sales.  Business firms are now willingly engaged in constant improvisation, personalization and customization, marking a visible shift form “marketing myopia” to “marketing hypermetropia”.  Present scenario of the business in the world relationship marketing is very important to retain old customers and get new customers.

 Reference:

1. Payne. A (1996), The Essence of Service Marketing, Prentice Hall India, Eastern     Economy Edition New Delhi.

2. Crosby, L, A., Eavans. K.R .and Cowles D… (1990), Relationship Quality in Service Selling: an Interpersonal Influence Perspective, Journal of Marketing, July, pp 68-81.

1. 3. Dr.AtulDhyani, Relationship Marketing a New Challenge, Indian Journal of      Marketing, February, 2003

4. Sudhir Chowdhary, Customer Relationship Management (CRM) One-to-One Marketing,

   Computers Today

About the Author

Relationship Marketing

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