Relationship Marketing: A business establishment has to ensure that it is able to attract and retain customers for achieving growth, profitability, and sustainability. The importance of retaining customers into the business is of prime importance and hence for most of the business establishments, customer retention is more essential than customer acquisition.
A business entity achieves most of its profitability from repeat customers or the brand loyal customers that are retained into the business by implementing ethical and effective customer relationship management strategies. The customers need to be made to feel special and respected by the business entity that will keep them attracted toward the brand and restrain them from venturing away into some other rival brands.
Therefore, it is the responsibility of a business entity to ensure that there are sound relationship marketing strategies and techniques that are driven toward attracting the customers and retaining them into the business. Now our experts from Assignment Help will provide you detailed information on relationship marketing.
Relationship Marketing with customers
The stronger the relationship between the business and its customers, more is the chance of achieving effective customer retention. Today, the supremacy and success of a business establishment are measured through the customer retention rate that is achieved by the business on a year-on-year basis.
Therefore, relationship building with the customers is a mandate that every business organization must undertake in order to keep the majority of the target customers attracted toward the brand. A relationship can be developed with customers through the implementation of diverse strategies and techniques by a business entity.
Uses of Relationship Marketing
Relationship marketing is one of the most popular and widely used strategies that is deployed by most of the business entities today for ensuring that they are able to build and nurture a close bonding with the customers such that they turn into loyal customers of the business. It is evident that the major portion of business comes from the existing customers as compared to the new customers.
This is because, the old customers of the business are conscious and used to with the level of products and services being offered by the business and hence, they have developed the desired trust and confidence on the business that drives them toward undertaking repeat purchases from the business organization. Relationship marketing plays a key role as a marketing technique of a brand that is intended to develop, strengthen and sustain a long-term relationship between the business organization and the target customers.
What research says?
According to research undertaken by Frederick Reichheld of Bain & Company, around 5% increase in customer retention by a business has the potential to enhance the revenue of the business by around 25-90%. One of the renowned global brands, American Express also determined that it is the existing and loyal customers of a business that mainly spend more as compared to the new customers.
The reason being that the existing customers have already determined the worth of the brand and they are willing to stay loyal to the brand as they are confident about the good intentions of the brand to serve them ethically and in a dedicated manner.
A customer will make repeat purchases from a brand if he or she is confident that the products or services offered by the brand will offer value-for-money. Hence, relationship marketing strategies need to be prudent in order to ensure that each of the customers of the business is treated with empathy, respect, and concern and in the future products and services are offered to them as per their tastes and preferences.
This will surely increase the level of customer satisfaction and customer retention. We can say that the success or failure of a modern business entity is entirely dependent on the effectiveness of relationship marketing strategies that are developed and implemented by the marketing department of the business.
What is the concept of Relationship Marketing?
The concept of relationship marketing can be described as a technique of marketing undertaken by a business organization that focuses on developing deeper and stronger relationships with the target customers so that the customers can enjoy long-term satisfaction from the products and services offered by the company. This leads to the generation of brand loyalty for the business by the customers.
Target of Relationship Marketing
The target of relationship marketing is not to achieve short-term goals such as some quick revenues and profitability, but the aim is to ensure customer satisfaction for a long-term that will lead to effective customer retention. Relationship marketing strategies enable a deeper understanding of the needs of each of the customers of a business so that effective marketing strategies can be formulated for each one of them.
Today, a business needs to ensure that it is able to take proper care of each of its customers so that they can be served in the most effective manner. The ultimate objectives are to foster a warm and friendly relationship with the customers in such a way that they have the intent and the desire to continue this mutually beneficial relationship for a long period of time. We can say that the key purpose of relationship marketing is to address the needs of the target customers in the most effective manner.
Customer relationship management
In today’s business entities the management focuses on strategies of customer relationship management (CRM) which has been emerging as one of the most significant areas of study in the domain of relationship marketing strategies that are undertaken by several business entities around the world. The modern techniques and strategies of relationship marketing are dependent on Information Technology (IT) to a great extent.
We know that a modern business entity has to deal with a lot of information related to its customers in order to analyze and determine the likings and preferences for types of products and services preferred by each of the customers. Managing and dealing with such voluminous data is a highly challenging task for the business organization and hence, it adopts an IT-based framework that is needed to support the modern applications of customer relationship management. Assignment Help Canada will now explain you the concept of customer relationship management
Concept of customer relationship management
The concept of customer relationship management includes processes such as analysis of sales to each of the customers, analysis of the profiles of the customers, analysis of various marketing and sales campaigns, analysis of loyalty, analysis of customer contacts and analysis of profitability. One of the other strategies of relationship marketing is the Database Marketing (DbM) technique.
Database Marketing (DbM) can be defined as the process in which databases are used for analyzing customer information that will lead to the formulation of effective marketing strategies for each of the customers. One of the key advantages of using DbM is that it offers individualized attention to the needs and preferences of each of the customers.
The system undertakes personalized communication with each of the customers and relevant advertising and promotional strategies are shared with them based on their choice of products and services. Therefore, the modern development in IT, software and hardware technologies have made it convenient for the business organizations to handle customer data in a more effective and ethical manner.
Relationship Marketing Technology
One of the key aspects of relationship marketing that we should consider is the development of relationship marketing technology. This technique deeper understanding of the needs and expectations of the consumers from the business based on which effective marketing strategies can be deployed for each of the consumers.
It can be said that within the purview of relationship marketing strategies, the role of Direct Marketing (DM) techniques and strategies is also quite significant as it plays a major role in the domain of relationship marketing for a business establishment.
Direct marketing is also referred to as One-to-one marketing strategy as it offers the solutions to the customers solely on an individualized basis which means that the products or services are offered to a customer based on his or her need entirely. It is essential for a business organization to have a direct marketing channel so that it can visit each of the prospective customers in person and try to analyze their perspectives about the product or service, their usefulness to the customers, prices they are willing to pay, future suggestions about the product or service and others.
This information is of high value to the marketer as it will help to develop the future products and services accordingly for that particular customer.
Role of Relationship Marketing
Relationship marketing plays a major role in understanding customer relationships and the ways in which a business can develop and make them more prudent in the future so that the best possible services can be guaranteed to every customer of the business. There are several roles that are played by relationship marketing on behalf of a business entity. One such role is the ‘Moment of Truth’.
It is observed mainly in the service industries that there is a willingness of the business to have direct contact with the customers that are also referred to as the social contact between the firm and its customers. This interaction between the business and the customer is referred to as the service encounter and it is a highly essential factor for determining the experience of the customers through the moment of truth.
We can understand from the discussion so far that relationship marketing plays a key role in improving the profitability of a business entity. This is because the formation of close and warm bonding with each of the customers of the business enhances the degree of services and hence increases customer satisfaction significantly.
The enhancement in the quality of the products and services is achieved as there is effective fostering of the relationship of the business with its customers. The formation of customer satisfaction occurs when a customer finds that the business is offering products and services to him or her based on what he or she desired.
This increases the credibility of the business manifold in the eyes of the customer and this naturally ensures his or her retention into the business. In turn, the increased rate of retention enhances the level of profitability for the business.
Another perceived benefit of relationship marketing is the development of long-term and meaningful partnerships with several entities and stakeholders of the business. Relationship marketing makes it possible for a business to develop several external relationships and nurture them effectively by forming networks with individuals, and collaborations with various organizations such as alliances.
Therefore, personal relationships with several business partners enhance the level of social contacts and help in fostering more sustainable relationships between the business and its customers. Personal selling is one of the most effective strategies that is undertaken by a business for improving the relationship between the buyer and the seller. This strategy in relationship marketing highlights the essence that a business puts on its individual customers.
It is understandable that one of the major roles of relationship marketing strategies is to achieve buy-in of customer attention. There should at least be two individuals for forming a relationship. This relationship strategy should be fostered for all the major stakeholders of the business such as the customers, employees, suppliers, and other entities.
If proper relationship building strategies are developed by a business then the stakeholders such as the customers will appreciate those strategies and objectives. The employees should be dedicated to offering the expected level of ethical and dedicated services to the customers such that there is enhanced customer satisfaction leading to much-improved retention.
This can be achieved by a business by decreasing the investment behind advertising and increasing the investment behind customer care services. Customer attention can be bought in for a long period of time if effective engagements are made with the customers on a long-term.
To discuss the role of relationship marketing one must not forget the essence of protecting the emotional wellbeing of the customers. This strategy is to be undertaken in such a way that the minimum possible customer dissatisfaction occurs. The customers must feel that they are cared for and are important for the sustainability and growth of the business establishment.
Taking care of personal information of customers is another crucial strategy to ensure adequate customer satisfaction. The customers also need supply security in the long-term along with the assurance of the highest possible standard of customer care.
The sudden fluctuations in demand and supply should also be managed prudently by a business for ensuring that it is able to take care of the emotional wellbeing of the customers in the most effective manner. Prudent relationship marketing strategies take care of preserving customer respect, prestige, and wellbeing. Hence, we can say that the emotional wellbeing of the consumers increases satisfaction and retention that a business seeks to achieve.
One of the important aspects of relationship marketing is to understand consumer psyche. There are occasional shifts in the psyche of the consumers due to several internal external factors that stimulate the psychological makeup of the consumers under diverse circumstances.
Since an existing customer has a long association and a warm bonding with the business organization for a long period of time it is essential for the business to rightly identify the psychological state of the consumers so that the products and services can be designed according to the needs of the consumers and at the same time offered to them in the most appropriate manner that will create adequate customer satisfaction and thereby be a profitable strategy for the business.
The understanding of the psychology and the behavioral traits of the consumers ensures that information gaps are reduced significantly and the business is able to gather information advantage in the domain of competition which will offer the desired competitive edge to the business establishment.
This approach contributes to effective acquiring of new customers and at the same time offering new products and services by significantly improving the offering to the customers. It also facilitates in trying and testing new product and service concepts.
The consumers are delighted if the individual consumer psyche is understood effectively. It offers the business the opportunity to become a favorite brand for the target consumers and become a brand specialist. We can say that relationship marketing is instrumental in building trust with customers.
Trust of the customers lead to relational exchange that results in mutually beneficial relationships and development of trust between the business and the customers is necessary because the relationship marketing processes symbolize the trust of the customers on the business establishment.
We have understood that relationship marketing strategy is the recipe of success for a business organization irrespective of its sector of operation. Relationship marketing offers solely personalized and customer-centric services to the target segment of the consumers by a business entity.
When a business creates a relationship marketing strategy and engages with the consumers the major concern of the business is the customers and not the product or service itself. For achieving a successful relationship marketing strategy it is essential for a business establishment to select the appropriate channels of supporting consumers in a direct manner whenever the customers need some help.
A business establishment should have the right strategies to be able to engage with the target customers at the right time and at the right place. The creation of effective advertising and promotional content is necessary so that they can stimulate the emotional framework of the consumer’s mind.
Social media plays a major role in relationship marketing because it offers various platforms such as Facebook, Twitter, Snapchat, Instagram or YouTube for the purpose of promoting the products and services of the business to the target consumers.
The advantage of social media marketing is that it helps the business to track the individual likings and preferences of the products and services and send advertisements or promotions based on the individual customer’s tastes and preferences. Therefore, the role played by modern digital communication technologies and social media networks in achieving effective customer attraction and retention cannot be over-emphasized.
In connection with relationship marketing, it is essential for a business entity to remember that the customers that have been loyal to the business since many years should be offered special privileges and incentives as a gesture of gratitude towards the business.
This ensures that the brand is able to create a long-term relationship and at the same time develop brand loyalty that will last long. For ensuring the best possible services to the customers it is essential to engage with them even after the purchase of the product or the services has been over.
We have learned by now that a business deploys relationship marketing strategies in various ways for ensuring that they can offer the loyal customers with some additional and unique facilities as these consumers have remained loyal over the years.
Offering heavy discounts and personalized recommendations to the customers depending on their tastes and preferences are some of the prudent strategies of customer retention that a business might deploy for achieving success with its relationship marketing strategies.
The role of collecting feedback from the customers on a regular basis is indispensable for a business entity to ensure that it is observing the prudent relationship marketing strategies and techniques. It is to be remembered that relationship marketing is a two-way process in which both the business and the consumers have to reciprocate each other effectively.
The business will offer personalized products and services to the customers and the customers will have to offer their genuine and unbiased feedback to the business such that the future products and services can be offered more effectively and there is enhanced bonding between the business and the customers.
We can name some of the renowned brands that are known for their highly effective relationship marketing strategies around the world such as retail fast food chain giant Domino’s, the much acclaimed J W Marriott Group of hotels, GE, and a host of other leading multinational corporations around the world.
It can be said that the global brands are more focused on relationship marketing because they deal with consumers around the world and hence, they need to be more dedicated and sincere in their approaches to retaining global customers. So, in conclusion, we may say that relationship marketing strategy has the ingredients to make a business successful in achieving enhanced customer satisfaction and retention through achieving brand loyalty. For more information on other topics, please refer to My Assignment Help.