To be successful (both individually and as a network), the firms in a strategic network must Second, relationship marketing theory implies that consumers enter into Fourth, based on relationship marketing theory and shown in Figure 5, we. To retain current customers, businsses engage in relationship marketing The Internet has made it easier for companies to track, store, analyze and then The chart below, based on data from MarketingProfs, illustrates the reasons that. Comparing transaction-based and relationship marketing strategies sales. important fe quality and ot information customer service. Internet connections bring.
Especially in the recent times where social networking is gaining ground, customer contact and relationship management is becoming more visible and instantaneous.
Relationship Marketing | What is Relationship Marketing?
Organizations have realised that Relationship Marketing is not related to the marketing function alone. This concept is to be embraced at the Corporate level and implemented through all departments covering both internal as well as external customers, suppliers and other agencies that the Organization engages with.
Sales and Marketing is always a network of multi layered and multi level partners, intermediaries, vendors and agents etc. Relationship marketing aspect assumes high importance for the success of every transaction through the myriad networks. Let us take the case of a Multi National Company engaged in manufacturing of Computers. The company would be sourcing or manufacturing at various geographical locations across the globe for supplies to different markets.
It can be manufacturing at Company owned factories in different countries or using contract manufacturing partners to manufacture on their behalf. The products are transported through service providers using multi modal transportation networks and a host of agents handling the cargo movement from end to end.
The products finally are sold to a whole seller or stockist or sold by the Company to the institutional buyers.
There can also be cases where the company maintains its own third party warehouses and sells to the retailers. In such complex networked supply chain the Organization has got to ensure that the products are supplied timely, as per customer requirement.
The Organizations success in being able to reach its products to the customer organization timely and successfully over a long period depends upon the seamless working of the entire network. In the past, it would have been impossible to keep useful records about every single client, but technology makes it easy for companies to automate their marketing efforts.
Relationship Networks - Customer and Supplier Networks
See also Analytical Marketing Branding is the final component of relationship marketing. A company can form a long-term relationship with a client if that client feels like the brand they purchase reflects who they are or who they want to be.
Customers are less inclined to switch to a different brand if they think that switch makes a statement about their identity. 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.
Relationship Networks - Customer and Supplier Networks
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 can involve revising major aspects of the way a company conducts business.
This can be expensive, time consuming, and have serious consequences for both customers and employees. The only way to carry out a relationship marketing strategy in a thoughtful and effective way is to follow a comprehensive marketing plan. Companies must first look at demographic and historical data about their customers to understand who they are, what they buy, and how to provide for them over the long term.
The company must understand why a consumers returns for repeate business. There is the tendency to think that customers return because the company has served them well, but maybe they return to a store because it is the closest to their house, or the only one in the area that stocks the product they want to buy.
Analyzing the nature of customer loyalty is the best method develop a working relationship marketing plan. With a wealth of customer data in place, the company can begin to segment these customers and develop unique marketing strategies for each segment. A customer who appreciates a product's value has different qualities than one who has had a helpful customer service experience. These customers are loyal for different reasons, and require tailored relationship marketing strategies.