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Relationship marketing concept, process and importance

mba 3 sem unit 4th

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Relationship marketing concept, process and importance

  1. 1. Relationship Marketing Concept, Process and importance Definition Marketing activities that are aimed at developing and managing trusting and long- term relationships with larger customers. In relationship marketing, customer profile, buying patterns, and history of contacts are maintained in a sales database, and an account executive is assigned to one or more major customers to fulfill their needs and maintain the relationship. Relationship marketing is a marketing approach that acknowledges the importance of both the buyer and the seller in the marketing process. The core concept is to build long-term relationships with customers. Relationship marketing mainly involves the improvement of internal operations. Many customers leave a company not because they didn't like the product, but because they were frustrated with the customer service. If a business streamlines its internal operations to satisfy all service needs of their customers, customers will be happier even in the face of product problems.
  2. 2. Relationship Marketing Concept, Process and importance  Technology also plays an important role in relationship marketing. The Internet has made it easier for companies to track, store, analyze and then utilize vast amounts of information about customers. Customers are offered personalized ads, special deals, and expedited service as a token of appreciation for their loyalty.  Social media sites allow business to engage their customers in an informal and ongoing way. In the past, it would have been impossible to keep useful records about every single client, but technology makes it easy for companies to automate their marketing efforts.  Branding is the final component of relationship marketing. A company can form a long-term relationship with a client if that client feels like the brand they purchase reflects who they are or who they want to be. Customers are less inclined to switch to a different brand if they think that switch makes a statement about their identity.
  3. 3. Relationship Marketing Concept, Process and importance Importance of Relationship Marketing  The recent trend seen in the Organizations across the world is that they are faced with changing times and the changing economies and business is forcing them to change themselves too. Organizations today have no option but to change and evolve. The change has to do with every aspect of business and not limited to any one aspect of its business. Those who are not able to see the trends and change themselves are perishing.  Technology has been the single most important change agent. Technology has redefined all aspects of business. What we see today is the definitive shift of power from the Organization into the hands of the Customer.  Customers today know their position and the power they wield. Especially the medium of internet has brought the customers closer to the Organisation as well as to the other Customers. Information, discussions, feedbacks and opinions are now visible and available to one and all almost instantaneously. Social networking is a medium that the Organizations cannot afford to ignore.  The fact that the information and interaction happens on live basis and the customer reactions can be instantaneous puts a lot of pressure on the Organizations to be on their guard all the time. Any adverse opinion shared or feedback from a dis-satisfied customer can spearhead a word of mouth campaign that can harm the Organisation. Therefore the internet and social network is a double edged sword as far as the Organizations are concerned. When used effectively this medium can help the Organization build a relationship with the customer and strengthen that relationship. This medium helps the Organization to reach out individually to the customer which may not be possible otherwise
  4. 4. Relationship Marketing Concept, Process and importance  The marketing departments are able to not only communicate and address the customer individually, with the help of technology and data mining techniques, they are able to understand the customer’s needs and customize solutions as per the specific individual needs of the customer. CRM packages and technology become the enablers to make this happen. Banks, Airlines, Insurance as well as Services like Pizza hut, Macdonald’s are some of the businesses that have developed effective means to recognize and communicate with individual customers and thereby build an emotional connect with the customers.  Product Companies have begun to use social networking sites effectively as a platform to engage with customer on technical and product related discussions and build a community around its products and services. Building relationships in such situations is easier and more effective.  The dynamics in the market is changing, thanks to internet. Marketing Managers can no longer afford to use the traditional methods of engaging and selling to the customers. Marketing today demands a customer centric approach. Customer is no longer an entity without a face. Today’s customer is an informed and intelligent customer who can be reached, who is visible and can be heard and a relationship with him matters the most to the Organization.  Relationship Management holds the centre stage to designing Marketing as well as communication strategies of the organization. It is essential for every student to understand the dynamics of Relationship Marketing in the present context for this subject will be the key differentiator for the Organizations in the market place.
  5. 5. Relationship Marketing Concept, Process and importance Steps in relationship marketing A customer needs to find a business they can feel comfortable with, and trust in, to provide what they need. Building relationships is a crucial step in this process. It may take several interactions, whether by e-mail, phone or in person, with a customer to make a sale. Do not make your customer feel pushed or intimidated into buying. There are many things you can do to show your potential customer you are interested in more than just “making the sale.” 1. Focus on Customer Needs – Don’t make your customer feel that all you want is their money. Take the time to find out what they really need and let them know how you can fulfill those needs. You have to put your customer’s need for problem solution above your need to make the sale. 2. Really Listen to Your Prospects – Listening to your prospect is common sense to us but, unfortunately, in our need to make a sale, we might overlook this. Don’t let outside distractions take away any of your attention. Reserve 100 percent for your customer and really listen to what he or she is saying to you. Do not let your feelings or your ego stand in the way of listening to your customer. Don’t go by the book. Every customer and situation is different and you have to follow the current conversation not a script. 3. Be Available – Always, always have your contact information such as e-mail address, phone number, etc. readily available to give to your prospects and customers. They need to be comfortable in the fact that they can reach you anytime they need you.
  6. 6. Relationship Marketing Concept, Process and importance 4. Offer Information and Resources – Offer free information, reports, resources, etc. on your website, blog, or newsletter. Let your customer know you want to help them with all their needs. Provide a weekly mailing with helpful tips, hints and information. Show them you are willing to go the extra mile to help. 5. Personalized Greetings – Don’t just take the money and vanish. Stay in touch with your customers to help build that lasting long-term relationship. Send out personalized holiday greetings, well wishes etc. with greeting cards, postcards or e-mail. Even just sending a hand-written thank you note will go a long way in forming that lasting relationship. 6. Provide Ongoing Support – Many times after a person purchases something, customers have questions or concerns about that purchase. Make sure you provide ongoing support by e-mail or phone so their questions and their concerns can be addressed. Unfortunately, too many times, companies seem to disappear once the purchase is complete. Don’t let that be you and your company. 7. Be Honest – In our eagerness to make the sale, we sometimes stretch the truth or completely abandon it. Never make promises you cannot fulfill or claims you cannot live up to. If the customer needs something you cannot provide, discuss possible options or alternatives or refer them to someone who can take care of their needs. Never make false claims even if you do have good intentions.
  7. 7. Relationship Marketing Concept, Process and importance 8. Show Respect – This goes without saying, no matter how difficult the customer or situation. There are customers that can certainly try our patience, but you must never lose your temper with a customer. Talk to them calmly and let them know you will do what you can to take care of the problem. Show them that you can work through their crisis and take care of the problem. Your calmness and confidence will help calm them down and reassure them that all will be well again. 9. Customer Appreciation - Offer your customers discounts, incentives, prizes or rewards any time you can to show them you appreciate them. There are companies that have incentives for new customers but nothing for existing customers. This is definitely not right. You need to show your existing customers you appreciate them as well. Send coupons, free gifts, etc. Doing so could mean a lot to your customer and your business. 10. Connect with Your Customer – Make the effort to actually connect with your customer as a person, not just to make a sale. Gone are the old school ways of making sales with pushy sales pitches, intimidation, scare tactics, etc. We now know relationship marketing and mutual respect and trust sets the tone for long-lasting buyer/seller associations. Even though you are in business for yourself, think of your customer as your boss. You work for your customer. You are there for your customer. You need your customer more than he needs you. Always value your customer and show them they can value you.