SERVICE MARKETING

TECHINIQUES IN BUILDING
CUSTOMER RELATIONSHIP
RELATIONSHIP MARKETING

 It is a form of marketing developed from direct response marketing campaigns that

emphasizes customer retention and satisfaction rather than sales transactions
 It differentiates from other forms of marketing in that it recognizes the long-term value
of customer relationships and extends communication beyond
intrusive advertising and sales promotional messages.
 With the growth of the Internet and mobile platforms, relationship marketing has
continued to evolve as technology opens more collaborative and social
communication channels such as tools for managing relationships with customers that
go beyond demographics and customer service data collection.
 Relationship marketing extends to include inbound marketing, a combination
of search optimization and strategic content, public relations, social media and
application development.
Relationship marketing refers to an arrangement
where both the buyer and seller have an interest
in a more satisfying exchange.
This approach aims to transcend the post-
purchase-exchange process with a customer in
order to make richer contact by providing a
more personalized purchase, using the
experience to create stronger ties.
A main focus on a long-term relationship with
customers differentiates relationship marketing
from other marketing techniques.
WHAT FUNCTIONS DOES CUSTOMER RELATIONS INCLUDE?

Customer relations includes both the reactive and proactive

functions performed by your customer service teams. 
1. Reactive functions are the efforts made by your team to
solve issues that are reported by customers.
This includes tasks like responding to customer complaints
and solving problems with the support team.
Being able to solve unexpected customer roadblocks is
essential for brands that are looking to build strong
customer relationships.
…………
Proactive functions are the measures taken to ensure a
long-term relationship with customers. These efforts are
aimed towards fostering customer success by consistently
satisfying evolving customer needs.
Customer success teams do this by providing information
about products and updates as well as by promoting
discounts and exclusive offers.
This type of long-term customer relationship management
helps companies create lasting impressions on customers
who eventually become loyal to the brand.
APPROCHES OF RELATIONSHIP MARKETING

1. Satisfaction

Relationship marketing relies on the

communication and acquisition of consumer
requirements solely from existing customers in a
mutually beneficial exchange usually involving
permission for contact by the customer through
an opt-in system
2. Retention

 A principle of relationship marketing is the retention of customers in order to ensure repeated trade
from preexisting customers by satisfying requirements above those of competing companies through a
mutually beneficial relationship.
 This technique balances new customers and opportunities with current and existing customers
to maximize profit and counteracts the leaky bucket theory of business, where new customers in older
direct marketing-oriented businesses are gained at the expense of the loss of older customers.
 This process of 'churning' is less economically viable than retaining all or the majority of customers
using both direct and relationship management because securing new customers requires more
investment.
HOW TO RETAIN YOUR
CUSTOMERS
• track the success of your marketing activities
• identify and follow up on prospective customers
• maintain relationships with customers
• group customers to develop personalised communications
• analyse which customers engage with callouts, offers or promotions
• track customer behaviour and purchases of your products or services
• record contact information and customer feedback
WHY RELATIONSHIP
MARKETING?
 Reichheld and Sasser (1990) claim that a 5% improvement in customer retention can
cause an increase in profitability of between 25 and 85 percent in terms of net present
value depending on the industry.
Factors for increased profitability associated with customer retention efforts

• The cost of acquisition occurs only at the beginning of a relationship. The longer a
relationship, the lower the amortized cost.
• Account maintenance costs decline as a percentage of total costs or as a percentage of
revenue.
• Long-term customers tend to be less inclined to switch products and also tend to be less
price-sensitive. This can result in stable unit sales volume and increases in dollar-sales
volume.
• They also may provide free word-of-mouth promotions and referrals.
FACTORS FOR INCREASED PROFITABILITY ASSOCIATED
WITH CUSTOMER RETENTION EFFORTS…………..

• Furthermore, they are more likely to purchase ancillary products and high-profit
margin supplemental products.
• Customers who stay with a company tend to be satisfied with the relationship and are
less likely to switch to competitors, increasing the difficulty for competitors to enter the
market or gain market share.
• Regular customers tend to be less expensive to service because they are familiar with
the process, require less 'education' and are consistent in their order placement.
• Increased customer retention and loyalty makes employees' jobs easier and more
satisfying. In turn, happy employees increase customer satisfaction in a virtuous circle
CUSTOMER RETENTION EFFORTS INVOLVE MULTIPLE
CONSIDERATIONS
1.Customer valuation – Describes how to value customers and categorize them according
to their financial and strategic value so that companies can decide where to invest for
deeper relationships and which relationships need to be served differently or even
terminated.
2.Customer retention measurement/customer retention rate. - This is the percentage of
customers at the beginning of the year that are still customers by the end of the year. This
ratio can be used to make comparisons between products, between market segments,
and over time.
3.Determining reasons for defection – It comprises investigating root causes, not mere
symptoms.
4.Developing and implementing a corrective plan – This could involve actions to improve
employee practices, using benchmarking to determine best corrective practices, visible
endorsement of top management, adjustments to the company's reward and recognition
systems, and the use of recovery teams to eliminate the causes of defections.
CUSTOMER RETENTION
STRATEGIES
1. Listen to your customers
2. Notice churning signs in advance
3. Target customers with special offers
4. Automate emails via trigger-based events
5. Reward your most profitable (VIP) customers
6. Personalize your follow-ups
7. Keep your follow-up promises
 **********

Developing a strong relationship marketing orientation

is not without costs in terms of money, time, and effort.
So, before a firm rushes out to establish stronger
relationships with customers, it is better to identify the
benefits that it is likely to realize.

***********
 BENEFITS OF POSITIVE
CUSTOMER RELATIONS
Positive customer relations can result in an array of benefits for your company including more potential leads and
higher customer retention rates. To narrow it down, here are the top three benefits that positive customer
relations can provide for your company.
1. Customer Retention
 Companies that do a better job of managing customer relations are more likely to see higher customer retention
rates. In fact, studies show that 61% of customers stop buying from a company if they have a poor customer
experience. 
2. Customer Loyalty
 When you have a good history with your customers, it makes it more difficult for your competitors to lure
people away from your brand. Customers loyalty is highly valuable for businesses as repeat customers are more
likely to buy from you than leads that have not yet converted. Building positive customer relations drives
customer loyalty because it creates an intangible incentive for the customer to return to the same business
BENEFITS…..
Customer Satisfaction
 Often times it can be hard to tell whether your customers are truly happy with your business or not. In
fact, 91% of unhappy customers who don't complain simply don't return to a company for another
purchase. Having strong customer relations can act as your insurance policy for preventing these
unidentified customers from churning without warning.
 Positive customer relations give companies more insight into their customer's problems because it
creates an open channel of communication for relaying customer feedback. This leads to better
individual interactions with customers which builds up trust over time and influences their buying
decisions. Studies have even found that consumers believe that a good experience with a company has
more influence over their purchase decision than advertising does
BENEFITS …….
• You'll build goodwill and increase the value of your business.
• You'll attract new customers with good word of mouth.
• The investment in after-sales service shows that you value you customers.
• You can drive innovation and increase profitability.
• Customers and the information they provide help you plan for long-term success.
 KOTLER IDENTIFIED FIVE DIFFERENT LEVELS OF
RELATIONSHIP MARKETING AT WHICH A FIRM MAY
CHOOSE TO OPERATE.

• Basic- No lasting relationship is really established. The transaction is made and both parties go
their own ways.
• Reactive- The seller offers to respond if the buyer has any problems.
• Accountable- The seller contacts the buyer after the sale to find out how the product has been
received and whether it could have been better.
• Proactive- The seller calls the customer from time to time with updates on improvements to
the product and other services to make the product’s consumption more satisfying.
• Partnerships- Both parties work together to find solutions to mutual problems and
opportunities for mutual success. This arrangement is generally limited to businessto-business
marketing.
STRATEGIES FOR DEVELOPING CUSTOMER RELATIONSHIPS

1. Invest in employee training.

Customer service training may include developing some

of the "soft" skills such as improving active listening,
developing a professional communication style, and how
to solve problems efficiently in your organizational
framework.
STRATEGIES…..
2. Create a fulfilling workplace for your customer
service representatives.

 Richard Branson of Virgin Airlines famously said, "If you

take care of your employees, they will take care of the
clients." This seems intuitive: If a customer service rep is
having a bad enough day that the customer perceives this,
it can change the tone of the experience.
 STRATEGIES…..
3. Improve first call resolution rate.

 It's a critical metric that improves satisfaction (no one wants to call multiple times about one issue, and more
calls equate to more frustration) and your team's internal efficiency. The more calls that are resolved completely,
the less your system is taxed by call volume. 
 Your service and support teams should be equipped and enabled to handle the majority of issues that customers
present. 

4. Leverage software to increase efficiency. 

 Adding a help desk software can significantly help customer service, support, and success teams monitor
interactions with customers over time. Tools like a customer relationship manager, or CRM, can help your team
expand its bandwidth and create satisfying experiences for every person that interacts with your business.
 STRATEGIES…

5. Create opportunities for self-service. 

 You may not have the bandwidth to provide on-demand one-to-one support at all hours of the day. Ensure that you're
providing the tools for your customers to get help when they need it, even without the help of a rep. 
 Chat bots can help disseminate information and guide website visitors to the right areas on your website. Knowledge
bases can address some of the most common questions customers have. 
 Even though some customers will prefer calling in, these simple steps can address the problems of your more self-
sufficient customers and increase satisfaction by continuing to solve problems on demand. 

6. Be accessible. 
 That isn't to say that you should replace reps with self-service solutions altogether. To provide an excellent customer
experience, your service and support teams need to be readily available to help. A Microsoft survey revealed that over a
third of consumers reported that their biggest complaint with a company is not being able to get help from an agent when
needed to.
 While it helps to have things like self-service help desks, your team still needs to be there when the customer has a
problem. Technology can help ease some of the stress for your customer service team, but it can never recreate the
memorable experience that a live rep can provide. This human interaction is crucial to creating a meaningful relationship
between a company and its customers.
 STRATEGIES….
7. Show appreciation. 
 Part of creating a great customer experience is providing small
moments of delight where you exceed their expectations. Consider
rewarding your best customers with a loyalty program or other small
token of your appreciation.

8. Measure and improve customer satisfaction. 

 Making your customers happy doesn't have to be an intangible effort.
Ask for feedback from your customers and develop a system for
measuring that feedback. This could be in the form of customer
satisfaction surveys and NPS scores.
STRATEGIES….
9. Create a customer-first culture.

 Companies that want to create positive customer relations need to install a customer-
centric culture into the organization. This culture has to be focused on customer success as
well as creating long-term solutions for every customer. Companies can do this by creating
a customer journey map that outlines the buyer's journey for a target consumer. Employees
will be more motivated to help customers as they can see exactly where they play a role in the
customer's success. It also helps to hire a customer relations executive who can lead the
development of customer relationships.
OTHER STRATEGIES

Define your customers

Market research and customer profiles help you define your ideal customer. This will allow you
to identify their pain points and how you can solve them.
Communicate with your customers
If you communicate regularly with your customers, their trust in you and the knowledge you
share with them will grow.
Focus on service
Your customer service is important in building customer relationships. Your service encourages
customer to return and purchase from your business again.
Seek feedback
Feedback allows customers an opportunity to tell you what they like and dislike about your
business, product or service. This gives you valuable insights into your business to help you
improve your offering.