Relationship Marketing
 
Relationship Marketing

Relationship Marketing is targeted at building stronger and long lasting relationships with clients and other companies. The business is done with a strategic orientation, where the relationship is improved with existing customers rather than finding new customers. It is meant to cater to the needs of individual customers. Its major part involves studying the need of the customer and how it changes in different circumstances.

Relationship marketing applies techniques like marketing, sales, customer care and communication. The relationship is not only enhanced but its life period is increased by these strategies. And as the customer realizes the value of relationship, they are drawn closer. This marketing not only focuses on building relationship and attracting customers to their products and services but also how to retain them.

A raw form of Marketing came into existence in the 1960s. But, organizations were still facing difficulty in selling products, so a system was developed to sell low cost goods to larger group of customer. Leonard Berry and Jag Sheth originated this marketing, in 1982. It was started in B2B markets and industries, which involved long term contracts for many years. Over the period of time, various marketing strategies were improved and relationship marketing was one of them.

Relationship marketing is applicable where the customers have many options in the market for the same product or service and the customer is entitled to make a selection decision. In such a kind of market, businesses try to maintain their clients by providing comparatively better products and good service and hence, achieving customer loyalty. And once it is achieved it becomes difficult for competitors to do well in the market. The customer turnover wasn't paid attention on as the main attention was on customer satisfaction. This kind of marketing was initially named as defensive marketing. Offensive marketing is the marketing strategy where not only new customers are attracted, but also the sales are stepped up by increasing the purchase frequency. This kind of marketing concentrates on freeing dissatisfied customers and acquiring new customers.

According to a research, the cost of retaining an old customer is only ten percent of the cost of getting a new customer, which makes sense to not to run around to get new customers in relationship marketing. And according to another research done by cross-sectional analysis, says that, a five percent improvement in customer retention is responsible for twenty-five to eighty-five percent of the profit. Usually high cost is incurred when getting new customers, so if sufficient number of existing customers is retained, there will be no need of acquiring new customers.

Once the customer trust is gained his chances of switching to other company becomes relatively less, he buys goods in bulk, he buys other supplementary goods and he starts neglecting average price variation. This maintains the unit sales volume and there is an increase in dollar-sales volume. The existing customers will be like a living advertisement. If he is satisfied with the company he will recommend it to his friends and acquaintances.

Since the existing customers are familiar with the process, it will take less time and money to educate them about the procedures putting fewer burdens on employees also and making them feel more satisfied with their jobs. The customers are divided into groups based on their loyalty. This procedure is known as relationship ladder of customer loyalty. The groups in ascending order are prospects, customer, client, supporter, advocate and partner.

Due to the advancement in computers and Internet, software has been developed to facilitate customer relationship management. With the help of this software the tastes, activities, preferences, and complaints of customers are tracked. Almost all the companies have this software in their marketing strategy, which benefits the customer as well as the company.

Thus the main aim of relationship marketing is to construct and maintain relationship with committed clients who are meant to bring profit to the company. The other benefits achieved are confidence building and social benefits.



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Articles
Affiliate Marketing

Anonymous Visitor Marketing

Attributes of a Successful Selling Strategy

Creating a Corporate Image

Differences between Marketing and Advertising

Digital Marketing

Disadvantages of using email to sell

Doing Research on Marketing

Global Marketing

How to make a marketing campaign appealing?

How to write a winning sales letter?

Increasing the business with the help of Promotional Gifts

Marketing and Sales: What is the difference?

Marketing and Selling on Internet

Marketing Management

Marketing - Snail Mail Vs E-mail

Marketing Strategies

Marketing through E-mail and Issues Surrounding it

Mobile Marketing

Multi-level Marketing

Recognizing Target Market

Relationship Marketing

Selling to a Woman Vs Selling to a Man

Taming Customers though Promotional Marketing

Tricks to sell your product

 

Disclaimer: The Publisher has strived to be as accurate and complete as possible in the creation of this website, notwithstanding the fact that he does not warrant or represent at any time that the contents within are accurate due to the rapidly changing nature of the Internet.

This site is a common sense guide to Relationship Marketing. In practical advice websites, like anything else in life, there are no guarantees of income made. Readers are cautioned to reply on their own judgment about their individual circumstances to act accordingly.

This site is not intended for use as a source of legal, business, accounting or financial advice. All readers are advised to seek services of competent professionals in legal, business, accounting, and finance field.

Any perceived slights of specific people or organizations are unintentional.

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