The task of creating strong customer loyalty is called relationship marketing. It embraces all the steps that companies undertake to know and serve their valued customer better.
Following five are the different levels of customer relationship building.
- Basic Marketing: The scales person simply sells the product.
- Reacting Marketing: The sales persons sell the product and encourage the customer to call if he/she has any comments, question or complaints.
- Accountable Marketing: Sales person after selling the product, himself contacts the customer for feedback, suggestion etc.
- Proactive Marketing: The sales person contacts customers from time to time to ask about feed back, questions, suggestions etc.
- Partnership Marketing: The company works continuously with customer by physically moving to their premises.
Most companies practice only basic marketing when their target markets contain many customers and their unit profit margins are small. At the other extreme, in market with few customers and high profit margins, most sellers move towards partnership marketing.
The best relationship marketing going on today is technology driven. Companies are using e-mail, websites, call centers, database and database software to foster continuous contact between company and customer. The aim of all such strategies is to develop stronger customer bonding and satisfaction. For this purpose, three value building approaches have been distinguished. These are.
- Adding financial benefits
- Adding social benefits
- Adding structural Ties
1. Adding Financial Benefits
Two financial benefits that companies can offer are
- Frequently Marketing Programs (FMPs) are designed to provide reward to customers who buy frequently and or in substantial amount. Frequency marketing is an acknowledgement of the fact that 20% of customers might account for 80% of its business.
Typically the first company to introduce and FMP gains the most, especially if competitors are slow to respond after that the competitors respond FMP can become a financial burden to all offering companies.
- Club Marketing Programs (CMP) is practiced by some companies. Club membership are made open to every one who purchases a product service or, it can be restricted to an affinity group or to those willing to pay a small fee.
Although open clubs one good for building a customer database, limited club member are more powerful long term loyalty builders.
2. Adding Social Benefits
Company personnel work for increasing the social bonds and personalizing customer relationships. In essence, thoughtful companies turn their customers into clients. The difference being that the customers are pat of the mass market, whereas clients are the conspicuous and known. Some companies arrange meetings, of their customers, thus developing special sort of social groups called brand communities.
3. Adding Structural Ties
The companies supply customers with special equipment or computer linkages that are helpful for the customers. The ultimate effort of all the marketing service is value creation in order to attract and retain profitable customers. The more the company is successful in creation of value, the more efficient are its internal operations, the greater is its comparative advantage and the higher its profits will be- the goal towards which relationship marketing strives.