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How is relationship marketing important?

In particular, they argue that, where consumers can more closely identify with employees and build a long-term relationship or bond, then customer satisfaction, and thus the propensity to buy, is higher. - Timming, A. R. (2017)

What is relationship marketing?

“Relationship marketing” (RM), this term, is published at an American Marketing Association services marketing conference and an influential paper in the Harvard Business Review. It is about forming a long-term relationship with customers, which focuses on dealing with customers needs, satisfaction, lifetime customer value and customer retention. The purpose of relationship is gaining new customers and maintaining current customers through sales and advertising.

In particular, they argue that, where consumers can more closely identify with employees and build a long-term relationship or bond, then customer satisfaction, and thus the propensity to buy, is higher. – Timming, A. R. (2017)

RM should not only focus on servicing the needs of the customer, it should consider the stakeholders as well. Since the millennium, the adoption of new technology becomes a part of life. New technology urges marketers using technology to managing customer relationship.

In the digital age, traditional offline customer management cannot fulfill the needs of customers. Nowadays, RM includes service marketing, the American Marketing Association defines services marketing as an organisational function and a set of processes for identifying or creating, communicating, and delivering value to customers and for managing customer relationship in a way that benefit the organisation and stakeholders. A service encounter can be defined as the duration in which a customer interacts with a service, which lead a kind of interactions between customer and a service provider. Typically it involves face-to-face contact with service personnel. However, customer can get the real-time service through the Internet in online shop, they do not need to go to physical shop and face-to-face contact with service personnel.

Relationship marketing is a way from value-in exchange to value-in-use. Customer is not only a audience but also a player. Customer relationship management (CRM) turns from service-profits exchange to co-created value. Customer and firms share the same value, which makes the relationship more “sticky”.

Customer knows, likes and trusts a brand, these are the soul of RM.

For instance, customers today expect a amazing unboxing experience, lightning-speed order fulfillment and bend-over-backwards customer service. So a brand cooperates with YouTubers to influence potential customers by amazing unboxing videos. PChome offers 24hrs delivery in Taiwan to satisfy lightning-speed order fulfillment. A brand wants to do every thing to gain more loyal customers and even think beyond their customers.

However, there is a dark side of RM, many companies that infuriate customers by deliberately “binding them with contracts, bleeding them with fees, and confounding them with fine print”. For example, bank, car rental, insurance industries etc.

Examples of dark side behaviour are widespread and include information about customers being sold to third parties without the customer’s consent; the provision of misleading information; hiding needed information from customers, resulting in their poor decisions; complex pricing alternatives; invasion of privacy; and charging for unneeded services. These behaviours should be banned by making appropriate law and companies need to know the consequences of having the dark side behaviour.

Finally, RM is a way to efficiently help a firm build a long-term relationship with their customers and makes a suitable marketing strategy. But a firm still need to consider to use customer information in a legal area.

 

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