The way businesses interact with customers has evolved dramatically over the past decade, with it previous viewed as a transaction but is now seen as a a buying journey. It's about building long term and mutual value, one to one with customers. It is technology that has transformed marketing, giving new ways to connect and interact with customers.
What used to be a one way messaging from businesses to consumers, is now moving to a two way communication based on more than just product innovation. Customers now have access to more information, with greater transparency leading to decreased customer loyalty.
Relationship marketing is an aspect of customer service and puts companies closer with customers and gives marketers the ability to better understand and influence customers. Relationship marketing is facilitated with technology, such as e-commerce, database marketing, loyalty marketing, telemarketing and channel marketing. This is done with enterprise resource planning (ERP) systems, supply chain management software systems (SCM), enterprise application integration software (EAI), data warehousing, salesforce automation (SFA), marking resource management (MRM) and other enterprise software applications.
Relationship marketing has to be adopted by top management for a company to become a customer strategy enterprise, and implemented through a series of strategies and processes to focus selling on a lifetime association with individual customers. Relationship marketing segments customers into portfolios, profitability level, a customized service that builds a chain of relationship to inspire value sharing (and making a company more competitive).
Relationship marketing is more than just exceptional customer service along, it is documented and characterizes customers into unique groups that can be influenced and profitability catered to. Businesses that use one-to-one marketing can experience a decrease in costs, higher margins and longer lifetime value of customers. People want to be treated for the individuals that they are. Ultimately, one wants to move customers through the get -keep - grow funnel.
Relationship marketing can make a marketer totally rethink and re-strategize customer development, moving from an average customer view to an individual one. Not just segments of the market, and that all customers are the same. Relationship marketing identifies customers differently, with different needs, behaviours and spending. This is important because it is better customer relationships that creates loyalty and keeps a company competitive. The 4 p's of marketing was the core of the disciple, but it has evolved to be the 'get' part of the strategy. It is thought that there are 4 c's of customer service, customer value, lower costs, better convenience and better communication.
Businesses need to continuously learn about their customers, and that takes coordinated effort. It is expensive to acquire customers, just getting one customers business online costs up to 95$ per person and as low as $11 for catalog based retailers. It is strategic to allocated a significant amount of resources to retain customers and increase the value and satisfaction levels customers face. Companies need to address this in how they manage their sales representatives. If a sales rep doesn't get rewarded to keeping a customer happy, and only for acquiring new customers, there is little incentive for customer service to be geared towards the existing consumer.
Being a customer centric company means that all levels of the organization need to take part in relationship marketing. There are five principle business functions that need to be integrated to a customer strategy:
- Financial custodianship of the customer-base: customers are a primary asset (even if accounting principles do not agree!)
- Production, logistics and service deliver: a company needs to incorporate customer interaction and behave as one would in a mutual relationship.
- Marketing communications, customer service, and interaction: connect all the communication channels in customer communication. This is important! I received two calls from the Economist offering me a promotion on a new subscription, but I still have a subscription just online and not print. Major fail Economist, major fail!
- Sales distribution and challenge management: challenging, but important, a business needs to be able to customize products and sell at individualized prices.
- Organizational management strategy: businesses need people who are responsible for customers and customer relationships, not just products and programs.
A customer-centric business strives to build continuous relationships with customers, for a long time. Products and services are customized and every time a customer interacts with a company it should bring value and increase the satisfaction a customer feels. Loyalty is a two way street, and company need to be loyal and be considerate to their customers.