Relationship marketing in services


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Relationship marketing in services

  1. 1. Relationship Marketing in Services Akash C.Mathapati Akash C.Mathapati
  2. 2.  Relationship marketing terminology in the services literature 1983 Recognition of the need to market formally to existing customers appeared earlier Prof.Levitt emphasized the need for firms to engage in constant reselling efforts Akash C.Mathapati
  3. 3. Relationship Marketing in Services What accounts for the accelerated interest in relationship marketing in services ?  Four convergent influences have propelled the current focus on relationship marketing  a. Maturing of services marketing  b. increased recognition of potential benefits for the firm and customers  c. technological advances Akash C.Mathapati
  4. 4.  Implication of marketing a performance rather than an object are well understood today Reality of many services being rendered on an ongoing or periodic basis coupled with the reality of customers forming relationship with people rather than goods paves the way for relationship marketing Repeated contact between customers and service providers Services often requires reselling efforts Akash C.Mathapati
  5. 5. Benefits to the firm Service industries competition has been fierce since 1990’s  Banks, Airlines  Marketing to protect customer base has become imperative  Reduce customer defection, duration of the relationship doubles Akash C.Mathapati
  6. 6. Benefits to the customers High involvement services also hold relationship appeal for customers Services illustrate some or all of the significant characters – importance, complexity, involvement etc Causes many customer to desire continuity with same service providers Risk reduction benefit of having a relationship with a supplier, customer can reap social benefits Akash C.Mathapati
  7. 7. Technological Advances Marketers are likely interested in relationship marketing if its affordable and practical United services automobile asso (USAA)  1994 2.6 million members & associate member Walgreen fills more than 7% of all prescriptions in USA  Intercom satellite based computer system Akash C.Mathapati
  8. 8.  Targeting Profitable Customers  Some customers are loyalty prone and some are deal – prone  Identify customer who are most likely to be loyal  Targeting profitable customers for relationship marketing involves study and analysis of loyalty and defection  Which types of customer defectors they are not relationship customers – dual strategies Akash C.Mathapati
  9. 9. Multiple Levels of Relationship Marketing Level – 1  Relationship marketing relies primarily on pricing incentives to secure customer loyalty Level – 2  Relationship marketing relies on social bonds, RM attempts to capitalize on the reality that many service encounters are also social encounter  Personal bonding involves personalization and customization of the relationship Akash C.Mathapati
  10. 10.  Level – 3  Relationship marketing relies on structured solutions to customer problems  Solutions to customer problems is designed into the service delivery system rather than being dependent upon the relationship building skills of individual service providers  E.G., FedEx Powership Program Akash C.Mathapati
  11. 11.  Trust as a marketing tool  Black Box  Opening lines of communication  Guaranteeing the service  A higher standard of conduct Akash C.Mathapati