What is Relationship Marketing?Long term strategy to buildrelationships with individualcustomers.
Definition of RM Consistent application of up to dateknowledge of individual customer toproduct and service design. RM focuses the firms attention oncustomer retention with a view to build along term relationship with the customer.
ComparisonTraditional Marketing• Transaction based.• Focus on single sale.• Quality is concern ofproduction.• Less emphasis on service.Relationship Marketing• Focus on customer relation.• Continuous customer contact.• Quality is concern of all.• High customer service.
C R MFunctioningtargetsUbiquity1 to 1marketingReal timeupdatesBetter analysisBuying Patterns&DemographicsRevenueenhancementSinglecustomer viewCost Reduction
Still, why to spend onCustomer-retention ratherthan customer acquisition???
Acquisition or RetentionAcquisition 3% increase in profits Cost is very high Life cycle is short Short term profit Unpredictable value chainbuildingRetention 17% increase in profits Cost is very low Life cycle is long Long term profit Value chain building