The concept of Traditional Marketing which was mainly based on customer satisfaction has now totally shifted to Relationship building with the customers, customer retention and managing the relationships. Now the businesses are not only focused on developing a marketing mix in accordance with the consumer’s demand but they need to sell their products and services in such a way that consumer should satisfy and return for making the next purchase which means maintaining relations with your customers and managing it in such a way tending the customers to stay with the business for a longer period.
Relationship Marketing was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions. As a practice, Relationship Marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages.
Relationship Marketing is to establish, maintain, manage and enhance relationships with the customers and other parties, at the profit, so that the objectives of the parties involved are met. This is actually achieved by a manual exchange and fulfillment of the promises. It is very important to build a relation with the customer in order to find out his needs, preferences and the attributes he values in the product, so that the marketer can easily formulate the strategies to fulfill those needs to satisfy the customers. Now both the parties are mutually helping each other in earning profit as customers are telling the marketers, what to sell and marketers are giving them what they need. Thus close relationship with the customer have become the vital part of today’s businesses. Along with this the company should keep in mind that if they had made certain promises with the customers should be fulfilled, as these promises made by the company for products and services given attract and persuade customers towards that company in return they will help in company’s progression by positive word of mouth and on the other hand if it is not so then it can result in disloyalty of the customers and even losing them and customer’s trust will help to maintain and enhance the relationship.
With the growth of the internet and mobile platforms, Relationship Marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. This includes tools for managing relationships with a customer that goes beyond simple demographic and customer service data. Relationship Marketing extends to include Inbound Marketing efforts, PR, Social Media and Application Development.
Just like Customer Relationship Management (CRM), Relationship Marketing is a broadly recognized, widely-implemented strategy for managing and nurturing a company’s interactions with clients and sales prospects. It also involves using technology to organize, synchronize business processes, (principally sales and marketing activities), and most importantly, automate those marketing and communication activities on concrete marketing sequences that could run in autopilot, (also known as marketing sequences). The overall goals are to find, attract and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Once simply a label for a category of software tools, today, it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs.
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.
Purpose of Relationship Management
The purpose of relationship marketing is, to enhance marketing productivity by achieving efficiency and effectiveness. Several relationship marketing practices can help achieve efficiency, such as customer retention, efficient consumer response (ECR), and the sharing of resources between marketing partners. Each of these activities have the potential to reduce operating costs of the marketer. Similarly, greater marketing effectiveness can be achieved because it attempts to involve customers in the early stages of marketing program development, facilitating the future marketing efforts of the company. Also, through individualized marketing and adoption of mass customization processes, relationship marketers can better address the needs of each selected customer, making marketing more effective. As is widely known, the discipline of marketing grew out of economics, and the growth was motivated by lack of interest among the economists in the details of market behavior, especially those related to the functions of the middlemen. It coincided with the growth in the number of middlemen and the importance of distribution during the industrial era.
The impact of technological revolution is changing the nature and activities of the marketing institutions. The current development and introduction of sophisticated electronic and computerized communication systems into our society is making it easier for consumers to interact directly with the producers. Producers are also becoming more knowledgeable about their consumers by maintaining and accessing sophisticated databases that capture information related to each interaction with individual consumers, at a very low cost. It gives them the means by which they can practice individual marketing. As a result, the functions formerly performed by the middlemen are now being undertaken by either the consumer or the producers. Producers are building such systems that allow them to undertake quick responses with regard to manufacturing, delivery and customer service, eliminating the need for inventory management, financing and order processing through middlemen. Also, consumers have less time and thus a reduced inclination to go to the store for every purchase. They are willing to undertake some of the responsibilities of direct ordering, personal merchandising, and product use related services with little help from the producers. As the concept of relationship marketing has emerged the focus has been shifted from transaction marketing to relationship marketing.