Program: MBA , Trimester 3, First Year

Subject Code- 305 MM:

Customer Oriented Marketing of Services

Unit No. 3
Lecture No. 2
Dr. Shahid Amin
Asst. Professor, School of Management
Outlines

• Prerequisite of topic
• Objective
• Building Customer Relationships
• Learning Outcomes
• References
Prerequisite of topic:

Students must have understanding of concept of services.

Objective:

• To understand the concept of Building Customer Relationships

Building Customer Relationships
Relationship Marketing

•is a philosophy of doing business, a strategic

orientation, that focuses on keeping current customers
and improving relationships with them.

•does not necessarily emphasize acquiring new

customers.

•is usually cheaper (for the firm).

–keeping a current customer costs less than attracting a new one.

•thus, the focus is less on attraction, and more on

retention and enhancement of customer relationships .
 The “Bucket Theory of Marketing”

Figure –
Holes in the Bucket: Why
Relationship Development
Makes Sense
When the operation is weak and customers are not
satisfied with what they get, the relationship is
weak and people start falling out of the bucket
through the holes faster than they can be poured in
through the top.

•Relationship strategy focuses on plugging the

holes.

•In many organizations, there is a reward given for

bringing new customers. But, there is often no
reward bringing for retaining existing customers.
Evolution of Customer Relationships
•Customers as strangers
–No interaction with the firm
–The main aim of the firm is to familiarizing the customers
with their offerings and subsequently encouraging to try
them.

•Customers as Acquaintances
–After awareness and trial, an acquaintance exist between
customer and organization
–In this stage, the primary goal of the organization is to
satisfy customer.
–And to provide value proposition to customers
comparable with that of competitors
Customers as Friends
–When customer continue its purchases from a firm and to receive
value in the exchange relationship. The firm acquire specific knowledge
about the need and wants of the customer.
–Thus provide unique offering with differential value, transforms the
relationship from acquaintance to friendship.

•Customers as Partners
–With more interaction, the level of trust deepens and customer may
receive more customized product offerings and interaction.
–The creation of trust leads to creation of commitment, which reduces
the customer’s need to solve the problems in the traditional sense, by
giving better alternative. Thus the relationship moves into partnership.
• The graph on the next slide highlights
that as customers are associated with
any organization from the long time and
are satisfied with the quality in
comparison to competitors , they tend
to give more business to the firm.
Few Companies with Good
Relationship Marketing
  Starbucks 

• Starbucks helped make getting a cup of coffee what it is

today. Starbucks is as much a cultural icon as it is a business,
showcasing its ubiquitous cups in social media posts on
Instagram, Facebook, Twitter, and Pinterest. Starbucks’
tagline on Pinterest reads, “Inspiring and nurturing the
human spirit – one person, one cup, and one neighborhood
at a time.”
• Starbucks sends frequent emails to their customers, keeping
them informed of offers and product launches. They also
share customer content on their social channels. Their tight-
knit community often lines up before sunrise for the chance
of obtaining their latest holiday-themed cup or specialty
beverage.
 American Express 

• American Express (commonly known as AmEx) has

successfully mastered the customer journey. Its strategic
marketing approach encompasses account applications,
onboarding, engagement, cross-selling, and referrals, making
it one of the most successful credit card businesses today. 
• Their account opening process is customer-friendly and
straightforward, taking only 30 seconds to complete. New
customers receive bonuses via direct mail, including
discounts and travel perks. Their multichannel "Share the
Love" referral program (promoted online, on social media,
and via email marketing) is strong, granting the referring
party 15,000 bonus points.
  T-Mobile

• In an attempt to capture the elusive millennial market, T-

Mobile began offering consumers mobile service without
contracts. This approach (unorthodox for telecom carriers)
proved wildly successful, improving customer satisfaction,
engagement, and referral business.
• T-Mobile provided weekly thank-you gifts and customer
rewards to participants. They focused on their mobile app,
offering reward redemption opportunities and targeted
offers that captured customers’ attention and enhanced
engagement. According to Nielsen, T-Mobile went from
No. 4 to No. 1 in service satisfaction as a result.
Learning Outcome:

Understand how to Build Customer Relationships in services.

References

Services Marketing, by Zeithaml, Bitner, Gremler and Pandit, Tata

McGraw Hill Education Pvt. Ltd