Relationship marketing

Relationship marketing

Relationship marketing emphasizes customer retention and satisfaction, rather than sales. It differs from other types of marketing as it recognizes that is long term value form customer relationships, and extends its methods of communication beyond just advertising and sales promotion.

 With the growth of social media and the internet relationship make has evolved, it has made it easier for companies to track the likes and dislikes of their customers, where they live and how often they buy products.

Satisfaction

The Relationship marketing relies upon the communication and acquisition of consumer requirements solely from existing customers in a mutually beneficial exchange usually involving permission for contact by the customer through an "opt-in" system. With particular relevance to customer satisfaction the relative price and quality of goods and services produced or sold through a company alongside customer service generally determine the amount of sales relative to that of competing companies. Although groups targeted through relationship marketing may be large, accuracy of communication and overall relevancy to the customer remains higher than that of direct marketing, but has less potential for generating new leads than direct marketing and is limited to Viral marketing for the acquisition of further customers.

Retention

A key principle of relationship marketing is the retention of customers through varying means and practices to able to ensure repeated trade from pre-existing customers by satisfying requirements and needs of customer , making a mutually beneficial relationship. Can use a technique to counterbalance the new customers and opportunities with current and existing customers as a means of maximizing profit and counteracting, which new customers gained in older direct marketing oriented businesses and older ones are retained by relationships. This process of can be less economically viable than just retaining all or the majority of customers using both direct and relationship management as new customers requires more investment.

Companies using relationship marketing well redirect or allocate large amounts of resources and attention towards customer retention. Markets with increasing competition it may cost 5 times more to attract new customers than it would to retain current customers. As direct or "offensive" marketing objects requires much more extensive resources and threats form competitors.

Customer retention efforts involve considerations such as the following:

1. Customer valuation – describes how to value customers and categorize them according to their financial and strategic value so that companies can decide where to invest for deeper relationships or need to be served differently or even terminated.

2. Customer retention measurement –a company's "customer retention rate". This is simply the percentage of customers at the beginning of the year to the ones still at the end of the year. This could be increase in retention rate from 80% to 90%, by doubling of the average life of a customer relationship from 5 to 10 years. This ratio can be used to make comparisons between products, between market segments, and over time.

3. Determine reasons for defection – Look at the root causes, not just mere symptoms. Other techniques include the analysis of customers' complaints and competitive benchmarking (

4. Develop and implement a corrective plan – This involves actions to improve employee practices, using benchmarking to determine best corrective practices, visible endorsement of the management, adjustments to the company's reward and recognition systems.

Application Relationship marketing and traditional marketing is not mutually exclusive and there is no need for a conflict between them. Most firms blend the two approaches to match their portfolio of products and services. As most products have a service component to them and this service component has been coming more need today.

Types of relationship marketing

Internal marketing Relationship marketing also stresses what it calls internal marketing. This refers to using a marketing orientation within the organization itself. It is claimed that many of the relationship marketing attributes like collaboration, loyalty and trust determine what "internal customers" say and do. According to this theory, every employee, team, or department in the company is simultaneously a supplier and a customer of services and products.

Referral marketing is developing and implementing a marketing plan to stimulate referrals. It can take months before you see the effect of referral marketing,.

Marketing to suppliers is aimed at ensuring a long-term conflict-free relationship in which all parties understand each other’s' needs and may exceed each other’s' expectations. Such a strategy can reduce costs and improve quality.

Influence markets involve a wide range of sub-markets including: government regulators, standards bodies, lobbyists, stockholders, bankers, venture capitalists, financial analysts, stockbrokers etc. These activities are typically carried out by the public relations department, but relationship

Live-in Marketing is a term used to describe a variant of marketing and advertising in which the target consumer is allowed to sample or use a brands product in a relaxed atmosphere over a longer period of time.

These are only a few of different kinds of relationship marketing to give idea of what they do and how relationship marketing works.as you can see relationship marketing is concerned with building relationship with customers and supplier,  to either gain return customer or have a better supply chain to offer better value to customers.