Relationship Marketing Essay
A key objective of marketing is to provide products and services that customers really want and to make customers feel their contact with the marketer is helping build a good relationship between the two. In this way the customer becomes a partner in the transaction, not Just a source of revenue for the marketer. Willing customers may be unable to buy and able customers may be unwilling to buy due to 1. Lack of Customer Data Integration (CDC) which is the process of managing the customer response or activity related to all possible touch points and use that information to satisfy consumer needs.
A customer may want to call the company but probably for example due to faulty telephone lines or unanswered calls, unreturned e-mails, it makes it impossible. I would advise Jane to come up with: * A Database that contains all relevant customer information including history, product information, product return activity, marketing promotion and campaign data. The database must ensure executive ownership of privacy. Company’s website which will enable customers to place an order or cancel an order * To create social media pages like face book and twitter which is also a marketing treated for their products. *
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I would advise Jane to build customer relationships by using the following 4 step marketing process: a) understanding the Market place and customer’s needs, b) designing a customer river marketing strategy and constructing marketing programs that represent customer leverage points c) building profitable relationships and create customer delight d) capture value from customers to create profits and customer equity CUSTOMER RELATIONSHIP MANAGEMENT Customer Relationship Management ( CRM ) as a customer Data management activity- which basically entails managing detailed information about individual customers and carefully managing only consumer touch points. There are a number of working definitions for CRM.
In fact, the letters CRM have been used to identify Continuous Relationship Marketing, Customer Relationship Marketing and now Customer Relationship Management. Each term represents the same process. However a more holistic definition of CRM would be the overall process of building and maintaining profitable relationships with customers by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers. Relationship Marketing By swamps building lasting relationships is to create superior customer value. Customers usually buy from the firm that offers the highest customer perceived value.
This refers to a customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers. It must be noted that customers do not Judge values and costs accurately or even objectively. They act on perceived value 2. Customer satisfaction: This depends on the product’s perceived performance relative to a buyer’s expectations. If it fails below their expectation dissatisfaction occurs. Outstanding marketing companies go out of their way to keep important customers satisfied as this leads to loyalty which in turn leads to better company performance. Smart companies try to convert customers into willing partners and customer evangelists who spread the good word about their products and services. 3.
Customer relations levels and tools: today most companies are developing customer loyalty and retention programmer. These programmer go beyond offering consistently high value and satisfaction. Jane could use specific marketing tools to develop strong bonds with consumers for example; * Frequency marketing programs that reward customers who buy frequently. Offer incentives to her customers. 4. To build customer relationships, Jane can add structural ties as ell as financial and social benefits. Egg she can provide the customers with on-line linkages that help manage part of their processes. 5. Relating with more carefully selected customers- I. E. Profitable and significant customers 6.
Relating more deeply with them; This involves not merely relying on the one sided communication lines from the mass media, but incorporating new more interactive approaches that help build targeted , two way customer relationships. So how does Jane ensure long term profitability? A) By growing the share of customers by offering greater variety to current customers b) Creating programs to cross sell and up- sell c) Building customer lifetime value; I. E. Realizing that losing a customer means the loss of all the customer’s entire stream of purchases that he/ she would have made in his/ her lifetime d) Building customer equity- which is the total combined customer lifetime values of all the company’s current and potential customers.
The more loyal the company’s profitable customers, the higher the firms customer equity. It entails viewing customers as assets that need to be managed and maximized. This will entail the firm classifying customers according to their profitability. There are basically four main classifications which need different strategies. They are I) Strangers; This customers show low potential profitability and projected loyalty. There is little fit between the company’s offerings and their needs. The strategy to use for this group of customers is simple ” don’t invest in them” I’) Butterflies: these are potentially profitable but not loyal. There is a good fit between the company’s product and their they are gone.
Efforts to convert them into loyal customers are rarely successful so the company should instead enjoy them while there. It should use promotional elites to attract them, create satisfying and profitable transactions with them and the cease investing in them until the next time. Iii) True friends: they are profitable and loyal and there is a strong fit between the company’s offerings and their needs. The firm wants to make continuous relationship investments to delight these customers and nurture, retain and grow them. Its objective being to turn True friends into true believers- IEEE those who come back regularly and tell others about their experiences. ‘v) Barnacles: They are highly loyal but not very profitable.
There is a limited fit between their needs and the company’s offerings. Egg a smaller bank customer who banks regularly but doesn’t generate enough to cover the costs maintaining their accounts. Barnacles are probably the most problematic customers since company maybe able to improve its profitability by selling them more, raising their fees, or reducing services to them.