Relationship Marketing

Relationship Marketing



Relationship Marketing
Relationship Marketing is​ targeted at​ building stronger and long lasting relationships with clients and other companies .​
The business is​ done with a​ strategic orientation,​ where the​ relationship is​ improved with existing customers rather than finding new customers .​
It is​ meant to​ cater to​ the​ needs of​ individual customers .​
Its major part involves studying the​ need of​ the​ customer and how it​ changes in​ different circumstances .​
Relationship marketing applies techniques like marketing,​ sales,​ customer care and communication .​
The relationship is​ not only enhanced but its life period is​ increased by these strategies .​
And as​ the​ customer realizes the​ value of​ relationship,​ they are drawn closer .​
This marketing not only focuses on​ building relationship and attracting customers to​ their products and services but also how to​ retain them .​
A raw form of​ Marketing came into existence in​ the​ 1960s .​
But,​ organizations were still facing difficulty in​ selling products,​ so a​ system was developed to​ sell low cost goods to​ larger group of​ customer .​
Leonard Berry and Jag Sheth originated this marketing,​ in​ 1982 .​
It was started in​ B2B markets and industries,​ which involved long term contracts for many years .​
Over the​ period of​ time,​ various marketing strategies were improved and relationship marketing was one of​ them .​
Relationship marketing is​ applicable where the​ customers have many options in​ the​ market for the​ same product or​ service and the​ customer is​ entitled to​ make a​ selection decision .​
In such a​ kind of​ market,​ businesses try to​ maintain their clients by providing comparatively better products and good service and hence,​ achieving customer loyalty .​
And once it​ is​ achieved it​ becomes difficult for competitors to​ do well in​ the​ market .​
The customer turnover wasn’t paid attention on​ as​ the​ main attention was on​ customer satisfaction .​
This kind of​ marketing was initially named as​ defensive marketing .​
Offensive marketing is​ the​ marketing strategy where not only new customers are attracted,​ but also the​ sales are stepped up by increasing the​ purchase frequency .​
This kind of​ marketing concentrates on​ freeing dissatisfied customers and acquiring new customers .​
According to​ a​ research,​ the​ cost of​ retaining an​ old customer is​ only ten percent of​ the​ cost of​ getting a​ new customer,​ which makes sense to​ not to​ run around to​ get new customers in​ relationship marketing .​
And according to​ another research done by cross-sectional analysis,​ says that,​ a​ five percent improvement in​ customer retention is​ responsible for twenty-five to​ eighty-five percent of​ the​ profit .​
Usually high cost is​ incurred when getting new customers,​ so if​ sufficient number of​ existing customers is​ retained,​ there will be no need of​ acquiring new customers.
Once the​ customer trust is​ gained his chances of​ switching to​ other company becomes relatively less,​ he buys goods in​ bulk,​ he buys other supplementary goods and he starts neglecting average price variation .​
This maintains the​ unit sales volume and there is​ an​ increase in​ dollar-sales volume .​
The existing customers will be like a​ living advertisement .​
If he is​ satisfied with the​ company he will recommend it​ to​ his friends and acquaintances.
Since the​ existing customers are familiar with the​ process,​ it​ will take less time and money to​ educate them about the​ procedures putting fewer burdens on​ employees also and making them feel more satisfied with their jobs .​
The customers are divided into groups based on​ their loyalty .​
This procedure is​ known as​ relationship ladder of​ customer loyalty .​
The groups in​ ascending order are prospects,​ customer,​ client,​ supporter,​ advocate and partner.
Due to​ the​ advancement in​ computers and Internet,​ software has been developed to​ facilitate customer relationship management .​
With the​ help of​ this software the​ tastes,​ activities,​ preferences,​ and complaints of​ customers are tracked .​
Almost all the​ companies have this software in​ their marketing strategy,​ which benefits the​ customer as​ well as​ the​ company .​
Thus the​ main aim of​ relationship marketing is​ to​ construct and maintain relationship with committed clients who are meant to​ bring profit to​ the​ company .​
The other benefits achieved are confidence building and social benefits.




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