Relationship Marketing

1. Relationship Marketing

2. 2

3. Relationship marketing?

4. Relationship marketing?

5. Relationship marketing
 Relationship marketing is the practice of building long-term
satisfying relations with key parties—customers, suppliers,
distributors—in order to retain their long-term preference
and business.

6. Main characteristics of relationship
marketing
 It focuses on partners and customers rather than on the
company’s products.
 It puts more emphasis on customer retention and growth
than on customer acquisition.
 It relies on cross-functional teams rather than on
departmental-level work.
 It relies more on listening and learning than on talking.

7. How do we create customers?
– Identifying customer needs
– Designing goods and services that meet those needs
– Communicate Information about those goods and
services to prospective buyers
– Making the goods or services available at times and
places that meet customers’ needs
– Pricing goods and services to reflect costs,
competition, and customers’ ability to buy
– Providing for the necessary service and follow-up

8. Relationship Marketing
=
follow up, follow up, follow up

9. “4 Eras” of Marketing

10. From transaction-based marketing to relationship
marketing…
 Transaction–based marketing (Simple exchanges)
 Relationship marketing
– Lifetime value of a customer
– Converting new customers to advocates

11. From transaction-based marketing to relationship
marketing…

12. Transaction vs. Relationship
Marketing

13. Customer Relationship Management (CRM)
The combination of strategies and tools that drive
relationship programs, re-orientating the entire
organization to a concentrated focus on satisfying
customers

14. Strategies for Building Customer Relationships
 Affinity Programs
– a marketing effort sponsored by an organization that
solicits responses from individuals who share common
interests and activities
– Example: Credit Card ILUNI FEUI

15. Strategies for Building Customer Relationships
 Frequency Marketing
– frequent-buyer or user marketing programs that reward
customers with cash, rebates, merchandise, or other
premiums
– Examples: Garuda Frequent Flyer

16. Strategies for Building Customer Relationships
 Database Marketing
– software that analyzes marketing information, then
identifies and targets messages toward specific groups
of potential customers.
– Examples: Telco operator (Telkomsel, Satelindo, etc)

17. Evaluating Relationships
 Lifetime Value (LTV)
– Refers to the net present value of the potential revenue
stream for any particular customer over a # of years
– Starts with current purchase activity then extrapolates to
include potential additions from cross-selling, upgrades,
total ownership, etc.

18. The Value of Customer Retention
 On average, it is more costly acquire a new customer rather
than retain an existing one.
 Customer retention ensure higher profit margin.
 Voluntary spending to maintain relationship.

19. Relationship Lifecycle
Customer relationship lifecycle
Baines, et al, 2011, p. 568

20. LEVEL OF RELATIONSHIP

21. Five Different Levels of Relationships (I)
 Basic. The company salesperson sells the product,
but does not follow up in any way.
 Reactive. The salesperson sells the product and
encourages the customer to call whenever he or
she has any questions or problems.
 Accountable. The salesperson calls to the customer
a short time after the sale to check whether the
product is meeting customer expectation.

22. Five Different Levels of Relationships (II)
 Proactive. The salesperson or other in the company
phone the customer from time to time with suggestions
about improved product use or helpful new product.
 Partnership. The company works continuously with the
customer and with other customers to discover ways to
deliver better value

23. Relationship Marketing and the 4Ps
Product
 More products are customized to the customers’ preferences.
 New products are developed and designed cooperatively with suppliers
and distributors.

24. Price
 The company will set a price based on the relationship with the
customer and the bundle of features and services ordered by the
customer.
 In business-to-business marketing, there is more negotiation because
products are often designed for each customer.

25. Distribution (Place)
 RM favours more direct marketing to the customer, thus reducing the
role of middlemen.
 RM favours offering alternatives to customers to choose the way they
want to order, pay for, receive, install, and even repair the product.

26. Communication (Promotion)
 RM favours more individual communication and dialogue with
customers.
 RM favours more integrated marketing communications to deliver the
same promise and image to the customer.
 RM sets up extranets with large customers to facilitate information
exchange, joint planning, ordering, and payments.

27. Relationship is developed by:
 Satisfying customers
 Adding value
 Privileges
 Customer orientation
 Use of database
 Two-way communications
 Quality products
 Loyalty schemes-enhanced knowledge of
customers ; allows for highly targeted promotion

28. Dealing with customers customer
 Let your customers communicate
 Listen to your customers and view point of the problem
 Fix the problem at hand immediately
28

29. Characteristics of good customer
services
 Listening skills
 Asking skills
 Responsible
 Knowledgeable
 Timely
 Accurate
29

30. Characteristics and Terms of Customer service
Terms:
 Timely delivery.
 Quality of the Product.
 Technical service.
 Price of the product