Relationship marketing was first defined as a form of marketing developed from direct response marketing campaigns that emphasize customer retention and satisfaction, rather than focus on sales transactions.
Relationship marketing differs from other forms of marketing because it recognizes the long-term value of customer relations and expands communication beyond annoying advertising and sales promotion messages.
With the growth of internet and mobile platforms, relationship marketing continues to grow as technology opens more collaborative and social communication channels. This includes tools for managing customer relationships that go beyond demographics and customer service data. Relationship marketing is expanded to include incoming marketing efforts, (a combination of search optimization and strategic content), PR, social media and application development.
Video Relationship marketing
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Relationship marketing refers to the arrangement in which the buyer and the seller have an interest to provide a more satisfactory exchange. This approach tries to transcend the post-purchase exchange process with customers to make contact richer by providing more personalized purchases, and using experience to create stronger ties. Marketing relationships are different from other marketing techniques because the main focus is on long-term relationships with customers.
From a social anthropological perspective, marketing relationship theory and practice can be interpreted as a commodity exchange that prioritizes gift exchange features. It seems that marketers - consciously or intuitively - recognize the power contained in the 'pre-modern' exchange and start using it. This marketing perspective opens up fertile ground for future research, where marketing theories and practices can benefit from an in-depth study of the principles governing prize exchange.
According to Liam Alvey, relationship marketing can be applied when there are competitive product alternatives for customers to choose from; and when there is an ongoing desire for the product or service.
Relationship marketing practices have been facilitated by several generations of customer relationship management software that enable tracking and analyzing every customer's preferences, activities, tastes, likes, dislikes, and complaints. For example, car manufacturers who maintain a database about when and how customers continue to buy their products, options they choose, how they finance purchases, etc., are in a strong position to develop one-to-one marketing offers and product benefits.
In a web app, a consumer shopping profile can be built as a people store on a website. This information is then used to calculate what could be his preferred preference in other categories. This predicted bid can then be shown to customers through cross-selling, email recommendations, and other channels.
Marketing relations have also migrated back to direct mail, enabling marketers to take advantage of the capabilities of digital technology, toner-based printing machines to produce unique and personalized pieces for each recipient through a technique called "variable data printing". Marketers can personalize documents with any information contained in their database, including name, address, demographics, purchase history, and dozens (or even hundreds) of other variables. The result is a print section that (ideally) reflects the individual needs and preferences of each recipient, increases the relevance of the piece and increases the response rate.
Maps Relationship marketing
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The marketing relationship is also strongly influenced by reengineering. According to the (process) re-engineering theory, the organization must be structured in accordance with the task and the process complete rather than function. That is, cross-functional teams must be responsible for the whole process, from start to finish, rather than having to work from one functional department to another functional department. Traditional marketing is said to use a functional departmental approach (or 'silo'). This heritage can still be seen in the traditional four P's of the marketing mix. Pricing, product management, promotion, and placement. According to Gordon (1999), the marketing mix approach is too limited to provide a framework that can be used to assess and develop customer relationships across multiple industries and should be replaced by alternative models of relationship marketing where the focus is on customers, relationships and interactions over time. , rather than markets and products.
In contrast, relationship marketing is cross-functional marketing. It is organized around a process that involves all aspects of the organization. In fact, some commentators prefer to call relationship marketing "relationship management" in recognition of the fact that it involves more than that which is usually included in marketing.
Due to its wide scope, relationship marketing can be effective in many contexts. In addition to being relevant to 'business for profit', research shows that relationship marketing can be useful for organizations in the voluntary sector as well as in the public sector.
Martin Christopher, Adrian Payne and David Ballantyne at Cranfield School of Management claim that relationship marketing has the potential to form a new synthesis between quality management, customer service management, and marketing.
Approach
Satisfaction
Marketing relationships rely on communication and the acquisition of customer requirements solely from existing customers in mutually profitable exchanges usually involve permission to be contacted by customers through an "opt-in" system. With special relevance to customer satisfaction the relative price and quality of goods and services produced or sold through the company together with customer service generally determines the amount of sales relative to a competitor company. Although the targeted group through relationship marketing may be large, the accuracy of communication and overall relevance with customers remains higher than direct marketing, but it has less potential to generate new prospects than direct marketing and is limited to Viral marketing for further customer acquisitions.
Retention
The principle of relationship marketing is customer retention through various ways to ensure recurring trade from pre-existing customers by meeting the above requirements of those who compete companies through mutually beneficial relations This technique balances new customers and opportunities with current and existing customers as a means maximize profits and abolish "leaky bucket business theory" in which new customers are acquired in an older direct-marketing oriented business at the expense or coincide with the loss of older customers. This "churning" process is less economical than maintaining all or the majority of customers using direct management and relationships as a major generation through new customers requiring more investment.
Many companies in competing markets will divert or allocate large amounts of resources or attention to customer retention as in the marketplace with increased competition may cost 5 times as much to attract new customers than will keep current customers, because direct marketing or " offensive "requiring far wider resources to cause defections from competitors. However, it is suggested that because the broad classical marketing theory centers on how to attract customers and create transactions rather than maintain them, most of the direct marketing uses used in the past are now gradually being used more with the marketing of relationships as their interests become more recognizable.
It is claimed by Reichheld and Sasser that a 5% increase in customer retention may lead to an increase in profitability between 25 and 85 percent (in terms of net present value) depending on the industry. However Carrol, P. and Reichheld, F. dispute this calculation, claiming they were the result of an incorrect cross-sectional analysis. Research by John Fleming and Jim Asplund shows that the customer involved generated 1.7 times more revenue than regular customers, while the involved employees and the customers involved returned revenues 3.4 times more than normal.
According to Buchanan and Gilles, the increase in profitability associated with customer retention efforts occurs due to several factors that occur after the relationship has been established with the customer.
- Cost only occurs at the beginning of a relationship, so the longer the relationship, the lower the amortized cost.
- Account maintenance costs decrease as a percentage of total cost (or as a percentage of revenue).
- Long-term customers tend to be less likely to switch, and also tend to be less price sensitive. This can result in stable unit sales volume and increased dollar sales volume.
- Long-term customers can start free word-of-mouth promotions and referrals.
- Long-term customers are more likely to purchase additional products and additional products with high margins.
- The customers you live with tend to be satisfied with the relationship and tend to switch to competitors, making it difficult for competitors to enter the market or gain market share.
- Regular customers tend to be less expensive for services because they are used to processes, require less "education", and are consistent in their order placement.
- Increased customer retention and loyalty make employee work easier and more rewarding. In turn, employees are happy to give feedback to better customer satisfaction in virtuous circles.
Relationship marketers talk about "ladder of customer loyalty". It classifies customer types according to their level of allegiance. The first ladder ladder consists of "prospects", that is, people who have not bought yet possibly in the future. This is followed by successive rungs of "customer", "client", "support", "advocate", and "partner". The purpose of the marketer relationship is to "help" the customer to get the ladder as high as possible. This usually involves providing a more personal service and delivering a quality of service that exceeds expectations at every step.
Customer retention efforts involve the following considerations:
- Customer ratings - Gordon (1999) describes how to rate customers and categorize them according to their financial and strategic values ​​so that companies can decide where to invest for deeper relationships and which relationships need to be served differently or even stopped.
- Customer retention measures - Dawkins and Reichheld (1990) calculate the company's "customer retention rate". This is just the percentage of customers at the beginning of the year who are still customers at the end of the year. In accordance with these statistics, an increase in retention rate from 80% to 90% is associated with an average life-span from a customer relationship of 5 to 10 years. This ratio can be used to make comparisons between products, across market segments, and over time.
- Determine the reasons for defection - Find the root cause, not just the symptoms. This involves detailed investigation when talking to a former customer. Other techniques include customer complaint analysis and competitive benchmarking (see competitor analysis).
- Develop and implement improvement plans - These can involve actions to improve employee practices, using benchmarks to determine the best corrective practices, tangible support from top management, reward system adjustments and corporate recognition, and use of "recovery teams" to eliminate the causes of defection.
A technique for calculating value to a sustainable customer relationship company has been developed. This calculation is usually called the age value of the customer.
Retention strategies can also include building barriers to switching customers. This can be done with product bundling (combining multiple products or services into one "package" and offering them for a single price), cross selling (selling related products to current customers), cross promotion (providing discounts or other promotional incentives to product buyers related), loyalty programs (providing incentives for frequent purchases), increasing the cost of redirects (adding termination fees, such as mortgage termination fees), and integrating computer systems from many organizations (especially in industrial marketing).
Many relationship marketers use a team-based approach. The rationale is the more points of contact between the organization and the customer, the stronger the bond, and the more secure the connection.
Apps
Traditional (or transactional) marketing and marketing relationships are not mutually exclusive and there is no need for conflict between them. In practice, a relationship-oriented marketer still has choices, depending on the situation. Most companies combine two approaches to tailoring their product and service portfolio. Many products have service components for them and this service component has grown in the last few decades.
Internal marketing
Relationship marketing emphasizes what is called internal marketing, or uses a marketing orientation within the organization itself. It is said that many attributes of marketing relationships such as collaboration, loyalty and trust determine what "internal customers" say and do. According to this theory, every employee, team, or department within the company simultaneously is the supplier and customer of the service and the product. An employee obtains service at a point in the value chain and then provides service to other employees further along the value chain. If internal marketing is effective, every employee will provide and receive exceptional service from and to other employees. It also helps employees understand the importance of their role and how their roles relate to others. If implemented well, it can also encourage every employee to see the process in terms of customer perceptions of added value, and the organization's strategic mission. It further says that an effective internal marketing program is a prerequisite for effective external marketing efforts. (George, W. 1990)
The six market model
Christopher, Payne and Ballantyne (1991) identified six markets they claimed to be the center of relationship marketing. They are: internal market, supplier market, recruitment market, referral market, influence market, and customer market.
Referral marketing is developing and implementing a marketing plan to stimulate referrals. While it may take months before you see the effect of referral marketing, this is often the most effective part of the overall marketing plan and the best use of resources.
Marketing to suppliers aims to ensure long-term, free conflict relationships where all parties understand their individual needs and exceed their expectations. Such strategies can reduce costs and improve quality.
Market influences involve various sub-markets including: government regulators, standards bodies, lobbyists, shareholders, bankers, venture capitalists, financial analysts, stockbrokers, consumer associations, environmental associations, and labor associations. This activity is usually done by the public relations department, but the relationship marketer feels that marketing to the six markets is the responsibility of everyone in the organization. Each market may require its own explicit strategy and separate marketing mix for each.
Direct Marketing
Live-in Marketing (LIM) is a marketing and advertising variant in which target consumers are allowed to sample or use brand products in a relaxed mood for longer periods of time. Just as product placements in film and television, LIM was developed as a means to achieve selected demographic targets in a non-invasive way and much more tacky than traditional advertising.
History
While LIM represents an untapped marketing path both for big and small brands is not at all a new idea. With the increasing popularity of experience and event marketing in North America and Europe, as well as a relatively high ROI in terms of advertising costs spent on experience marketing compared to traditional large media advertising, industry analysts see LIM as a natural progression.
Premise
LIM works around the premise that a marketing or advertising agency goes out on behalf of the brand in question and finds its demographic target. From then on, the way forward such as sponsorship or direct product placement and sampling are explored. Unlike traditional event marketing, LIM suggests that end users will taste the product or service in a comfortable and relaxed atmosphere. The idea behind this technique is that the end user will have a positive interaction with the given brand so that it leads to word of mouth communication and potential future purchases. If the success of traditional events and experience marketing is shared with LIM, then it could show how to promote a profitable and low cost product. However, this means of advertising is still in its infancy and more research is needed to determine the true success of such a campaign. The first company to explicitly offer LIM services is Hostival Connect by the end of 2010.
See also
- Private marketing
- Customer relationship management
References
Bibliography
- Dawkins, P. and Reichheld, F. (1990) "Customer Retention as Competitive Weapon", Board of Directors and Board , volume 14, no 4, 1990
- George, W. (1990) "Internal marketing and organizational behavior: A partnership in developing customer-aware employees at every level", Business Research Journal , volume 20, no 1, 1990, pp. 63-70
- Gillett, A. G. (2015). REMARKOR: MARKETING ORIENTATION OF RELATIONSHIP ON LOCAL GOVERNMENT PERFORMANCE. Journal of Service Research, 15 (1), 97.
- Gillett, A.G. (2016). DOUBLE RELATIONSHIPS WITH DOUBLE-DOUBE-INTERMEDIATES: MARKETING RELATIONSHIP SCOPE FOR GENERAL SERVICES. Journal of Service Research, 16 (2), 1 - 28.
- Gummesson, E. (2011). Marketing total relationships. Routledge.
- Levitt, T. (1983) "After the Sale Ends," Harvard Business Review , Sept-Oct, 1983
- McKenna, R. (1991) "Marketing is Everything", Harvard Business Review , Jan-Feb, 1991, pp 65-70 (ebook)
- Schneider, B. (1980) "Service Organization: Climate Very Important", Organizational Dynamics <6>, vol 9, no 2, 1980, pp 52-65
- Christopher, M., Payne, A.F.T. and Ballantyne, D. (1991) "Relationship Marketing: Bringing Quality, Customer Service and Marketing
- Callum, K., (2017) "Nor Nor Marketing", vol 5 pp 66-75
Bersama ", Oxford, Butterworth-Heinemann
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