Relationship Marketing

1. ISRAR AHMAD
International Islamic University Islamabad

2. AGENDA
What is Relationship Marketing?
Ultimate objective of Relationship Marketing?
Conventional Vs Relationship Marketing?
$$Benefits of Relationship Marketing?
Benefits for Small and Local business Entrepreneurs?
Five Best Practices in the Real World
Deliverables of the Relationship Marketing

3. What is “Relationship Marketing?”
It isn’t “talking to customers,” and it’s more than
“listening to customers.”
It is actively listening to and being involved with
customers and suppliers as a normal part of your
business.
It is “an organization’s effort to develop a long term
effective link with all stakeholders for mutual
benefit.”

4. What is “Relationship Marketing?”
“Relationship marketing refers to all marketing
activities directed toward establishing, developing,
and maintaining successful relational exchanges."
Morgan & Hunt 1994

5. Ultimate objective of Relationship Marketing
Emphasis on
new
customer
(Customer
Caching)
Emphasis is on
developing and
enhancing
Relationships
(Keeping
Customer)
Partner
Advocate
Supporter
Customer
Clint
Prospect

6. The Firm’s Potential
Marketing Relationships
Buyer Partnerships
Supplier Partnerships
Business
Units
Internal
Partnerships
Lateral
Partnerships
Focal
Firm
Employees
Goods
Suppliers
Services
Suppliers
Competitors
Nonprofit
Organizations
Government
Ultimate
Customers
Intermediate
Customers
Functional
Departments

7. Relationship Marketing Strategy Compared to
Transaction (Traditional) Marketing Strategy
Factor Transaction Marketing Relationship
Time orientation Short-term Long-term
Organizational goal Make sale Retain customers
Customer service priority Relatively low Very high
Customer contact Low to moderate Frequent
Customer commitment Low High
Seller-customer interaction Conflict manipulation Cooperation; trust
Source of quality Mainly from production Company wide

8. $$ Benefits of Relationship Marketing
Long-term customers tend to be less inclined to switch, and also tend to be less
price sensitive.
Long-term customers may initiate free word of mouth promotions and referrals.
Long-term customers are more likely to purchase related products from you.
Regular customers tend to be less expensive to service and tend to be consistent
in their purchase habits.
Increased customer loyalty makes employees' jobs easier and more satisfying.

9. The Good News for Small & Local
Businesses
Easier than ever for local and regional businesses to
develop mutually beneficial relationships with customers
Relationship Marketing can distinguish your business
from chain/national businesses
BUT HOW DO YOU DO IT?

10. 5 Best Practices in the REAL WORLD
 Research: Identify your UNIQUE VALUE PROPOSITION. How do you solve problems for
your customers? Find out what your competitors are doing.
 Develop a Marketing Strategy: How to build on your company or organization’s strengths
while taking advantage of competitors' weaknesses
 Create a Marketing Plan: Prepare a document that shows how you will reach your strategic
goals with marketing tools (advertising, PR, print, web, etc.).
 Don’t forget common sense: Be flexible. Business owners and managers deal with
environmental factors, limited resources, uncertainty and tight time tables. The most successful
marketer is often the one who trains his or her 'gut-reaction' to simulate that of the average
customer!
Measure your results! “How did you hear about us?” KEEP TRACK!

11. Integrated Financial Solutions, LLC -
The Ultimate Relationship Marketers
Relationship Marketing Techniques:
 Investment in defining and branding what makes them unique (“Wealth Engineering”)
 Investment in high-end communications materials, refining message, making product easy to understand and easy to
buy
 Team based sales and service approach Birthday cards
 Hand written thank-you notes Hand-delivered Christmas presents
 Annual customer appreciation party Pre-meeting agendas, follow-up notes for clients
 Asking for referrals at every opportunity
 Serve on boards, committees where likely to meet target customers.
 Result: WORD OF MOUTH brings in business

12. Commitment & Trust vs. Satisfaction
Satisfaction is very unstable
Satisfaction is a poor predictor of outcomes
Commitment & Trust are very stable
Commitment & Trust are good predictors of
outcomes

13. Outcomes of Commitment & Trust
Retention
Positive Word of Mouth
Cooperation
Ease of Complaining
Willingness to Complain
Uncertainty
Functional Conflict
Share of Wallet
New Product Adoption