relationship quality to enhance customer retention. Several studies were Relationship marketing is considered to be essential for building buying the same market offerings over a long period. This can be .. Cross-Factor Loadings. Construct .. Online Relational Bond, Trust and Customer Loyalty. Do Social Media marketing activities enhance customer equity? Does online relationship marketing enhance customer retention and cross-buying?Service. Does relationship marketing improve customer relationship satisfaction and . in order to attract, interact with, and retain more profitable or high net-worth customers.” Hallowell, ; Silvestro and Cross, ), but form two distinct constructs . on them and encouraging them to use self-service options, such as online.
The internet is used extensively for relationship marketing by integrating customer database and web site. The key benefits of e-CRM are as follows: Customer marketing becomes more cost effective and return on investment is much better as companies are able to develop more focused strategy.
The marketing messages can be made more customized and cost effective with use of emails. Customer can be served in much more in-depth fashion by providing them specific information.
This also increases contact frequency between the company and the consumer. Digital technologies like email, online chat, rich web content its help company reduce their overhead cost thus improving their bottom line. The customer relationship management provides key support to marketing activities through the following: Sales forces receive active support in efforts by providing them real time customer related information.
Customer service agents are able to effectively serve consumers as they have a ready database containing customer and their purchase related information. Customer Lifecycle Management A customer lifecycle management from an organization perspective contains selection, acquisition, retention, and an extension of the customer.
This also includes developing marketing strategies for customer acquisition, retention and extension. This includes targeting high potential and value customers.
This includes identifying product offering based on customer profile. This includes upsell, cross-sell, re-sell and lead generation. Implementing electronic customer relationship management Organizations execute following strategies to implement e-CRM: But the focus is to attract quality visitors who are likely to make purchases.
This increase visibility of the website can be done through online or offline promotion. They should be able to get the desired information and browse the website for extended periods for sell activity to happen.
There should be enough incentives for consumers to make the first purchase. The online forms should be easy to operate for its completion. This is done by sending periodic email highlighting current happenings of the website. This also includes showcasing specific customer information after logging in, for example, purchase history, related products etc. This group can help in resolving consumer queries and also serve in lead generation.
Companies should not get over board with regards to consumer information. They should not share the information without prior consent and knowledge of the consumer. It is very apparent that to create differentiation and retain a loyal customer, companies need to invest in the relationship market.
Regular customers tend to be less expensive to service because they are familiar with the process, require less "education", and are consistent in their order placement. Increased customer retention and loyalty makes the employees' jobs easier and more satisfying.
In turn, happy employees feed back into better customer satisfaction in a virtuous circle. Relationship marketers speak of the "relationship ladder of customer loyalty ". It groups types of customers according to their level of loyalty.
The ladder's first rung consists of "prospects", that is, people that have not purchased yet but are likely to in the future. This is followed by the successive rungs of "customer", "client", "supporter", "advocate", and "partner".
Relationship marketing - Wikipedia
The relationship marketer's objective is to "help" customers get as high up the ladder as possible. This usually involves providing more personalized service and providing service quality that exceeds expectations at each step. Customer retention efforts involve considerations such as the following: Customer valuation — Gordon 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 and which relationships need to be served differently or even terminated.
Customer retention measurement — Dawkins and Reichheld calculated a company's "customer retention rate". This is simply the percentage of customers at the beginning of the year that are still customers by the end of the year.
This ratio can be used to make comparisons between products, between market segments, and over time.
Determine reasons for defection — Look for the root causes, not mere symptoms. This involves probing for details when talking to former customers.
Other techniques include the analysis of customers' complaints and competitive benchmarking see competitor analysis. Develop and implement a corrective plan — This could involve actions to improve employee practices, using benchmarking to determine best corrective practices, visible endorsement of top management, adjustments to the company's reward and recognition systems, and the use of "recovery teams" to eliminate the causes of defections.
A technique to calculate the value to a firm of a sustained customer relationship has been developed. This calculation is typically called customer lifetime value. Retention strategies may also include building barriers to customer switching. This can be done by product bundling combining several products or services into one "package" and offering them at a single pricecross-selling selling related products to current customerscross promotions giving discounts or other promotional incentives to purchasers of related productsloyalty programs giving incentives for frequent purchasesincreasing switching costs adding termination costs, such as mortgage termination feesand integrating computer systems of multiple organizations primarily in industrial marketing.
Many relationship marketers use a team-based approach. The rationale is that the more points of contact between the organization and customer, the stronger will be the bond, and the more secure the relationship. Application[ edit ] Relationship marketing and traditional or transactional marketing are not mutually exclusive and there is no need for a conflict between them. In practice, a relationship-oriented marketer still has choices, depending on the situation. Most firms blend the two approaches to match their portfolio of products and services.
Social bond refers to the relationship established through the collective blood relationship between people.
Relationship Marketing Using the Internet
Relationship marketing is to establish and strengthen these two kinds of bonds, especially the structural bond, so as to strengthen the relationship with clients and lock them in. Morgan and Hunt made a distinction between economic and social exchange on the basis of exchange theory and concluded that the basic guarantee of social exchange was the spirit of the contract of trust and commitment. The traditional marketing concept of one-time transaction begins to transfer to the concept of relationship marketing.
This is the transition from economic exchange theory to social exchange theory. The theoretical core of enterprise relationship marketing in this period is the cooperative relationship based on commitment. They define the concept of relationship marketing from the perspective of exchange theory, and emphasize that relationship marketing is an activity related to the progress, maintenance and development of all marketing activities.
Shows that trust and commitment is a trading enterprise and the basis of marketing activities to establish a long term good relations, also is the factors affecting the basis of cooperation for both sides, moreover the relationship effect of other factors include: Coptics and Wolf believe that relational marketing is the marketing of databases. They think, the enterprise want to be able to continue to improve the effect of relationships with customers, when access to the data and information to improve the effect of relationship with the customer's cost is low, enterprises will pay the cost to improve relations with customers, at present, due to tell the development of communication technology and Internet technology, makes the information costs have dropped substantially, so the argument that relationship marketing is for database marketing is increasingly valued, this view emphasizes the relationship marketing is through the Internet technology database data lock with the customers, to establish and maintain good relationship with customers.
Liker and Klamath introduced the relationship between enterprises and suppliers into the scope of relational marketing, believing that in the marketing process, manufacturers make suppliers assume corresponding responsibilities, and enable them to give play to their technological and resource advantages in the production process, which can improve the marketing innovation ability of manufacturers.
Lukas and Bryan a. Ferrell believe that the implementation of customer-oriented marketing concept can greatly promote the innovation ability of marketing, and at the same time encourage enterprises to break through the traditional relationship model between enterprises and customers and propose new product Suggestions with technical feasibility.
Lethe through the observation of the benchmarking customer research, to confirm the relationship between enterprises and customers to enterprise's product innovation capacity there is a positive correlation, the enterprise can in the development and in the process of benchmarking customer good relationship, to identify those more market potential for development of new products, it can save a lot of for the enterprise cost of new product development and market acceptance of this kind of product is high.
In addition, he also proposed that all the relationships established with relevant parties to enterprise marketing activities are centered on the establishment of good customer relations, that is, the core relationship of relationship marketing is the relationship with customers.
Guinness believes that relationship marketing is essentially a consciousness that regards the marketing process as the interaction between enterprises and various aspects of relationships and networks. According to his research, relationship is the relationship between two or more subjects, network is a larger set of relationships, and interactive interaction between people in the relationship or network process. 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. An employee obtains a service at a point in the value chain and then provides a service to another employee further along the value chain.
Relationship Marketing Using the Internet
If internal marketing is effective, every employee will both provide and receive exceptional service from and to other employees. It also helps employees understand the significance of their roles and how their roles relate to others'.
If implemented well, it can also encourage every employee to see the process in terms of the customer's perception of value added, and the organization's strategic mission. Further it is claimed that an effective internal marketing program is a prerequisite for effective external marketing efforts. Referral marketing is developing and implementing a marketing plan to stimulate referrals. Although it may take months before you see the effect of referral marketing, this is often the most effective part of an overall marketing plan and the best use of resources[ citation needed ].
Marketing to suppliers is aimed at ensuring a long-term conflict-free relationship in which all parties understand each other's needs and exceed each other's expectations. Such a strategy can reduce costs and improve quality. Influence markets involve a wide range of sub-markets including: These activities are typically carried out by the public relations department, but relationship marketers feel that marketing to all six markets is the responsibility of everyone in the organization.