RELATIONSHIP MARKETING

Kaushik Samant

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What is Relationship Marketing? Why Relationship Marketing? Are there any Benefits from RM? What are the Requisites for successful RM? Are there any challenges?
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Relationship Marketing


Strategic orientation, that focuses on keeping current customers and improving relationships with them. The focus is less on attraction, and more on retention and enhancement of customer relationships.
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Stages in Relationship Marketing

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Underlying Logic of Customer Retention

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Need for Relationship Marketing

Transactional Marketing
1. 2.

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1. 2.

Single sale recruitment Product Features Short term Little importance to Customer service Communicate to persuade Goal is customer satisfaction

3. 4.

3. 4.

5.

5.

6.

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Retention of customer Product benefits & systematic solution Long term Relationship Customer service taken as most important element Communicate to make sense & meaning Goal is to delight the customer
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Benefits of Relationship Marketing

Customers:
1. 2.

Receipt of greater value Confidence benefits:

trust , confidence in provider, reduced anxiety

3.

Social benefits:
familiarity, social support, personal relationships

4.

Special treatment benefits:

special deals, price breaks

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FIRMS:
1.

Economic benefits:
increased revenues, reduced marketing and administrative costs regular revenue stream

2.

Customer behavior benefits:

strong word-of-mouth endorsements, customer voluntary performance word-ofsocial benefits to other customers, mentors to other customers

3.

Human resource management benefits:

easier jobs for employees, social benefits for employees employee retention
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Benefits of Relationship Marketing

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Strategies for Building Relationships

Core Service Provision:
Service foundations built upon delivery of excellent service: satisfaction, perceived service quality, perceived value

Quality in the core service

Segmentation and Targeting:
Focus and Competitive Advantage, Not worth the effort , Profitability Segments

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Market Models
Internal

Influence
customer

Referral

Employee

Supplier

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80/20 Customer Pyramid

Most profitable customers

Best Customers Other Customers

What segment spends more with us over time, costs less to maintain, spreads positive word-of-mouth?

Least profitable customers

What segment costs us in time, effort and money yet does not provide the return we want? What segment is difficult to do business with?

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Difficulties faced by customers in switching service providers

Switching Barriers:
customer inertia  switching costs:

 set

up costs, search costs, learning costs, contractual costs,  Perceived risk

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RELATIONSHIP CHALLENGES
Not all customers are good relationship customers:
   

Customer is not always right Wrong segment Not profitable in the long term Difficult customers

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Life Cycle of Satisfied customer

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Conclusion
Relationship marketing is all about creating, building and maintaining the relationships with the customers for the long-term profits. long-

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THANK YOU
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