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Lecture No. 05

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18 views3 pages

Lecture No. 05

Uploaded by

jnu.md.sajid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Lecture # 05

ῼ Relationship Marketing: Meaning

 Zikmund & D’Amico – ‘The term relationship marketing (or relationship management) is used to
communicate the idea that a major goal of marketing is to build long-term relationships with the
parties who contribute to the company’s success’.

 Philip Kotler - ‘Relationship Marketing is the process of creating, maintaining and enhancing
strong, value laden relationships with customers and other stakeholders’

 W.James and Susan – ‘Relationship Marketing is establishing and maintaining mutually beneficial
exchange relationships with internal and external customers and all the other stakeholders of the
organization’.

 Relationship marketing aims to build long-term mutually satisfying relations with key parties,
which ultimately results in marketing network between the company and its supporting
stakeholders.
 Relationship marketing is a practice of building long-term satisfying relations with key parties as
customers, suppliers, intermediaries, distributors - in order to retain their long-term preference
& business.

ῼ Importance of Relationship Marketing

 Acquiring new customers can be challenging and costly. Relationship marketing helps retain customers over
the long term, which results in customer loyalty rather than customers purchase once or infrequently.

 Relationship marketing is important for its ability to stay in close contact with customers. By understanding
how customers use a brand’s products and services and observing additional unmet needs, brands can create
new features and offerings to meet those needs, further strengthening the relationship.

ῼ Benefits of Relationship Marketing


 Imagine being able to retain 60% of the leads you convert into customers. These individuals stick with your
business for many years and even refer others to you. The followings are a quick look at some of the benefits
of customer relationship marketing:
 Enhance customer experience
 Open two-way communication for valuable customer feedback
 Becomes easier to generate more referrals to qualified leads
 Helps to understand the needs of the customers
 Helps to come up with new business (product/service) ideas
 Makes the business stand out from competitors
 Enhance the ability to foster loyalty
 Boost the total revenue via up-selling and cross-selling

 Creates loyal customers, which leads to repeat purchases and a higher CLV (customer lifetime value).

ῼ Role of Relationships

 Although the marketing plan shows how the company will establish and maintain profitable
customer relationships, it also affects both internal and external relationships. Marketers must
consider all these relationships when developing a marketing plan.

First, it influences how marketing personnel work with each other and with other
departments to deliver value and satisfy customers.

Second, it affects how the company works with suppliers, distributors and partners to
achieve the plan’s objectives.

Third, it influences the company’s dealings with other stakeholders, including government
regulators, the media, and the community at large.

ῼ Customer Relationship Management (CRM)

 Customer relationship management (CRM) is the overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction.
 In case of relationship management, every organization has to try to build long-term relationship with
customers.
 By focusing on most profitable customers, products and channels, the management of companies hope to
achieve profitable growth, capturing a larger share of each customer’s expenditures by managing & building
high customer loyalty.
 They estimate individual customer lifetime value and design their market offerings and prices to make a
profit over the customer’s lifetime.

 Loyal customers are likely to become brand advocates or ambassadors, recommending products and services
to friends, family and business associates.

 Attracting a new customer may cost five times as much as retaining an existing one, relationship marketing
also emphasizes customer retention
ῼ Partnering to Build Customer Relationships

 In case of building and enhance the relationship between buyer and seller, values will be
exchanged. This is the idea at the heart of relationship marketing.

 If our customer trust us, feel desired, feel that we are looking out for their need, then they will
want to continue their relationship with us.

 They will be less price-sensitive, more loyal and important is that, they will go to market our
product for us by telling others of their satisfaction with our product. The organizations have to
try to build such relationship with customers.

ῼ Customer Development Process in Building Customer Relationships

 It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer
satisfied.
 Marketers must be concerned with the lifetime value of the customer.

 For good understanding and assuming the concept of relationship management, it is essential to
know the customer development process.

Customer Development Process in Building Customer Relationships

Suspect

Prospect Disqualified
Prospects
First-time Customer

Repeat Customer Inactive


or old
Clients customers
Members
Customer Win-
back Strategy
Advocates
Figure: Customer
Partners Development Process

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