Relationship Marketing
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
2,703
On Slideshare
2,703
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
120
Comments
0
Likes
4

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide
  • Research with Lucent Technologies and Motorola purchasing folks

Transcript

  • 1. Traditional vs. Marketing With the cost of customer attraction escalating, companies are paying more attention to holding on to their existing customers Long-standing customers are less expensive to reach and less expensive to serve Customer relationships are assets that should be evaluated and managed as rigorously as any financial or physical assets Relationship marketing not only focuses on customer retention, but also takes a long-term perspective
  • 2. Fig. 11.1 Traditional Versus Relationship Marketing Interactive Marketing - Value-added Product/ Service Emphasized Relationship Marketing Customer Value Created/ Acquisition/ Customer Retention Satisfaction Traditional Marketing Marketing Mix - Core Product EmphasizedShort-term Focus Long-term FocusAdapted from Jag Sheth, AMA Faculty Consortium/Evolution of Global Marketing and the Relationship Imperative, 1996
  • 3. Relationship Marketing Defined“To establish, maintain, and enhance (usuallybut not necessarily long-term) relationshipswith customers and other partners, at a profit,so that the objectives of the parties involvedare met. This is achieved by a mutual exchangeand fulfillment of promises.”___Grönroos (Service Management and Marketing, 1990)
  • 4. What is Relationship Marketing? The cornerstone of marketing is getting close to customers in order to better identify and satisfy their needs Realize that marketing is responsible for more than “just the sale” The focus is shifting from the transaction to the relationship It is difficult to separate service operations and delivery from relationship building Managing customer relationships continues to be paramount, so is the growing importance of managing relationships with suppliers and resellers
  • 5. Relationship Marketing - Goals and Outcomes Whereas the goal of traditional marketing is customer acquisition, under relationship marketing the focus shifts to creating value The objective is to create more value through interdependent, collaborative relationships with customers, the outcome is customer retention Relationship marketing is ongoing, constantly looking for opportunities to generate new value Retaining customers requires marketers to exhibit care and concern after they have made a purchase The sale often represents only the beginning of the relationship between the buyer and seller
  • 6. Building LastingCustomer Relationships Sellers can resist the natural tendency toward decline and complacency by developing what we refer to as “relationship enablers” It is the seller’s responsibility to nurture the relationship beyond its simple dollar value Using the relationship enablers sellers can minimize relationship decay and strengthen the bonds that lead to long-term, perhaps even lifetime associations
  • 7. Supplier Rankings of Relationship Enablers * TRUST COMMITMENTCOOPERATION INFORMATION EXCHANGE DEPENDENCE
  • 8. Figure 11.3 - Information Sustains a Relationship Relationship Selling Partnership Relationship that the Buyer is willing to invest in the relationship Information, Time, or Trust Level High Transaction Account Selling Penetration Transaction- Based Low Account Relationship Penetration Services that the seller is willing to provide the relationship
  • 9. Customer Relationship Management (CRM) Definition of CRM  CRM is a business strategy that involves selecting and managing customer relationships to optimize the long-term value of a company Goal of CRM  The goal of CRM is to acquire, grow, and retain the right customer relationships -- those with the best long-term profit potential (Bob Thompson, founder of CRMGuru.com)
  • 10. Customer Relationship Management (CRM) as Collaboration CRM is about collaborating with customers and partners so they receive superior value Interactions with customers regardless of the sales channel should be constantly managed to optimize the value of those relationships Effective CRM systems provide a “360 degree” view of the customer, including the frequency, response, and quality of customer interactions
  • 11. Characteristics of a Good CRM System● A good CRM system is capable of describing customer relationships in sufficient detail so that management, salespeople, customer service and even suppliers have direct and real-time access to customer information● The information gathered should help match customer needs with product/service offerings, remind customers of service requirements, predict future purchases, and alert the company when a customer’s purchase behavior has changed● A key feature of CRM is sharing the customer experience across the organization and supply chain
  • 12. CRM BUSINESS DRIVERS Automation/Productivity/Efficiency 33% Competitive Advantage 22% Customer Demands and Requirements 15% Increased Revenue 14% Cost or Price Reduction 10% Speed/Saving Time 9%Keeping Track of All Aspects of Business 7% Customer Support 7%Inventory Control/Resource Management 6% Better/Expanded Communication 6% Integration 6% Customer Satisfaction 6% Accessibility 4% ConformityStandardization 4% 0% 5% 10% 15% 20% 25% 30% 35% Source: AMR Research, 2002
  • 13. CRM & Critical Customer Data Companies should continuously gather critical customer data known as BADI☛Behaviors (how often and where customers visit) ☛Attitudes (customers satisfaction, service quality assessments) ☛ Demographics ☛Insights (share of market, share of wallet)
  • 14. Marketing Knowledge & CRMMarketing knowledge forms the basis of a customer strategy by analyzing, planning, implementing, and control – re: a customer-centric orientation a clearly defined value proposition alignment with key channel partners dominating the segment (focused on a particular market segment) or cycle (dominate the evolving value proposition aimed a group of customers) internal and supply chain process integration. the coordination and practice of relationship marketing activities
  • 15. W h y C R M E f f o r t s F a il  Lack of focus  No change management policies  No buy-in  Complicated procedures  Poor training
  • 16. Avoiding CRM Failure Careful planning Appropriate use of people in the organization Get supply chain members involved Using customer-driven processes Have a sound platform for introducing CRM systems and activities