WHAT IS RELATIONSHIP MARKETING?
Relationship Marketing -The process of creating , maintaining and enhancing strong ,value-laden relationships with Customers and other stakeholders. Relationship marketing is based on the premise that important accounts need focused and continuous attention. Let us look at a relationship focused definition of marketing
Relationship focused definition of marketing – ‘The purpose of marketing is to establish, maintain, enhance and commercialize customer relationships (often, but not necessarily always, long term relationships) so that the objectives of the parties involved are met. This is done by the mutual exchange and fulfilment of promises. – Gronroos, C (1990)
Specifically speaking relationship marketing focuses on with the following Focal point is integrating customer service and quality with a market orientation. Focus is on getting and keeping customers Concept of total quality across all functions focuses on total relationship between firm and its customers, suppliers and key markets on an ongoing basis
GROWING IMPORTANCE OF RELATIONSHIP MARKETING
You would agree that today’s customers face a growing range of choices in the products and services they can buy . . They are making their choice on the basis of their perceptions of quality, service, and value. Companies need to understand the determinants of customer value and satisfaction.
Here lies the role of relationship marketing. A major challenge for high-performance companies is that of building and maintaining viable businesses in a rapidly changing marketplace. They must recognize the core elements of the business and how to maintain a viable fit between their stakeholders, processes, resources, and organization capabilities and culture
To create customer satisfaction, companies must manage their value chain as well as the whole value delivery system in a customer-centered way. The company’s goal is not only to get customers, but even more importantly to retain customers. Customer relationship marketing provides the key to retaining customers and involves providing financial and social benefits as well as structural ties to the customers. Companies must decide how much relationship marketing to invest in different market segments and individual customers, from such levels as basic, reactive, accountable, proactive, and full partnership. Much depends on estimating customer lifetime value against the cost stream required to attract and retain these customers.