Learning Relationship Process

From the time we started this course, I kept using the word "relationship building”. How do firms build
relationships? To build relationships, it's important for firms to know their customers and to
understand them well. So, to do this, it is important for firms to build a relationship, which involves
continuous learning through constant interactions. Let me explain this with a diagram. If you notice,
there are two parts to this diagram: learning about customers and customization.

What does this involve? How do we learn about customers? You have to acquire knowledge, acquire
insights. You acquire knowledge based on customers' interactions with the firm, and you use this
knowledge to differentiate the customers. As a firm, you have a lot of data about customers'
interactions with the firm. This would involve calls to the contact centers, purchase history, forms that
the customers have filled up, and there are several sources from which you can compile the data and
create a knowledge base.

Once you have acquired this knowledge, you would continuously use this to differentiate customers.
What's the purpose of acquiring knowledge and differentiation? Customers want to be treated
differently, as unique individuals. So, you have an opportunity to customize the marketing mix. All the
elements of marketing mix can be customized by using the knowledge that you have acquired about
customers. This involves–if you are selling goods and services, this involves the four Ps as well as the
seven Ps of marketing mix. So, if you are marketing goods, you have four Ps, and if you are marketing
services, you have three additional Ps. The three additional Ps involves people, that is, customers and
employees; the process; and the physical evidence. So, four Ps when you are selling goods, seven Ps
when you are offering services.

Let me explain the whole process. You see two arrows which indicates that it's a continuous process.
You learn about customers, acquire knowledge, use that knowledge to differentiate them, and then
as an organization, you would try to figure out "Which element of the marketing mix should I actually

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customize?". Customization doesn't necessarily involve only the product. Many times, managers
confuse customization with customization of the product. You can customize every element of the
marketing mix.

The same product is sold to different customers using different channels of communication, different
channels of delivery at a different price using different processes and at a different place. All of them
makes it a unique experience for each individual customer. So, you don't have to necessarily only focus
on customizing the core offering. You can play around with the entire marketing mix, and that gives a
firm, a lot more leeway in terms of offering something which is very unique to the customers'
requirements.

To sum up, firms learn about customers using information that's already residing with them, and they
use what's called as a drip irrigation method. Every interaction for a firm is an opportunity to learn
about customer, add to their knowledge, use that knowledge to differentiate the customers, and then
customize the offering. So, it shows a continuous process. It's a journey, it's not a destination. Firms
learn more, they make the relationship stronger, customer stays with them because the customer is
satisfied with an offering which is very unique. For a competitor, it is difficult to replicate it, since it
takes a lot of time to build this knowledge base.

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