Evolution of Customer Relationship

Customer relationship has changed significantly with the development of business practices and technology. In the early production-oriented stage, firms focused only on mass production because demand was higher than supply. Customers had limited choices and companies paid little attention to their needs.

Later, in the sales-oriented stage, competition increased and businesses used advertising and aggressive selling to attract buyers. The aim was to complete sales rather than build relationships.

The marketing-oriented stage shifted attention toward understanding customer needs through market research and product improvement. Firms began satisfying customer expectations.

After this, the customer-oriented stage emphasized customer satisfaction, after-sales service, and complaint handling to encourage repeat purchases.

With the development of relationship marketing, companies focused on long-term relationships and loyalty programs.

Finally, the modern CRM and digital stage uses technology, databases, and social media to provide personalized services and maintain continuous interaction, creating strong and lasting customer relationships.

Evolution of Customer Relationship

Customer relationship has developed gradually along with changes in markets, competition, and technology. Earlier, firms only aimed to sell products, but today they try to create long-term relationships and customer loyalty. The evolution of customer relationship can be understood through the following stages:

1. Production-Oriented Stage

The production-oriented stage is the earliest phase in the evolution of customer relationship. This period existed mainly during the early industrial revolution when the demand for goods was much greater than the supply. Businesses focused primarily on producing goods in large quantities at low cost. The main objective of firms was efficiency in manufacturing rather than understanding customer needs.

Since customers had very limited choices, they were compelled to buy whatever was available in the market. Companies did not pay attention to product variety, quality improvement, or customer satisfaction. Interaction between business and customers was almost absent. The relationship was purely one-way, where the company produced and the customer simply purchased.

Organizations believed that customers would automatically buy products if they were easily available and affordable. There was no concept of customer service, complaint handling, or after-sales support. As a result, the role of the customer was passive, and businesses held all the power in the transaction.

This stage clearly reflects a product-centered approach. The success of business depended on production capacity rather than customer satisfaction. Therefore, customer relationship management did not exist during this period.

2. Sales-Oriented Stage

As industries expanded, production increased and supply began to exceed demand. Businesses now faced competition and realized that customers would not automatically buy their products. This led to the sales-oriented stage. Companies started focusing on selling techniques rather than production alone.

Organizations adopted aggressive promotional strategies such as advertising, personal selling, discounts, and sales promotion schemes. Salespersons were appointed to persuade customers to purchase products. The primary objective was to increase sales volume and clear inventory.

In this stage, customer relationship was still weak and short-term. Companies were more interested in convincing customers to buy rather than understanding their actual needs. Once the sale was completed, the business rarely maintained further contact with the customer. Customer satisfaction was not a priority, and complaints were often ignored.

The relationship was transactional, meaning it lasted only until the product was sold. Businesses believed that effective persuasion could generate demand even for unwanted products. Although communication between seller and buyer increased compared to the previous stage, it was one-sided and profit-oriented.

This stage marked the beginning of interaction with customers, but the focus remained on sales performance rather than building long-term relationships.

3. Marketing-Oriented Stage

With rising competition and changing consumer behavior, businesses realized that aggressive selling alone could not ensure success. This gave rise to the marketing-oriented stage. Companies began to understand that identifying and satisfying customer needs was essential for survival.

Organizations started conducting market research to study consumer preferences, buying habits, and expectations. Products were designed according to customer requirements instead of forcing customers to accept existing products. The idea of “the customer is king” emerged during this period.

Businesses focused on product quality, branding, packaging, pricing strategies, and distribution channels. Customer satisfaction became an important objective. Firms also introduced basic customer service to assist buyers during purchase.

The relationship between company and customer improved in this stage. Businesses tried to attract and satisfy customers rather than simply pushing products. However, the relationship was still limited mainly to the purchase period. Companies aimed to gain customers but did not fully concentrate on retaining them for a long time.

This stage represented a shift from product orientation to customer orientation. It laid the foundation for modern CRM by recognizing that business success depends on fulfilling customer needs and expectations.

4. Customer-Oriented Stage

In the customer-oriented stage, companies understood that satisfying customers was not enough; they needed to maintain ongoing relationships. Businesses realized that repeat purchases from existing customers were more profitable than constantly attracting new ones.

Firms began to emphasize customer service, after-sales support, warranty services, and complaint handling. Organizations started maintaining customer records and feedback systems. Customers were treated as valuable assets rather than mere buyers.

The focus shifted toward customer retention. Companies made efforts to understand individual preferences and provide better service quality. Employees were trained to communicate politely and handle customer problems efficiently. Businesses also used surveys and feedback forms to measure satisfaction levels.

In this stage, the relationship became continuous rather than temporary. The company interacted with customers even after the sale. Trust and satisfaction became important factors in business success.

This stage marked a major transformation in business thinking. The customer was no longer just a source of revenue but a long-term partner. The concept of building customer goodwill began to develop, preparing the way for relationship marketing and CRM systems.

5. Relationship Marketing Stage

The relationship marketing stage introduced the idea of creating long-term associations with customers. Businesses recognized that retaining existing customers was cheaper and more beneficial than acquiring new ones. Therefore, companies started building emotional connections with customers.

Organizations introduced loyalty programs, membership cards, reward points, special discounts, and personalized offers. Communication with customers became regular through telephone calls, newsletters, and emails. Companies aimed to make customers feel valued and appreciated.

Trust, commitment, and satisfaction became the main pillars of business strategy. Firms tried to understand individual customer preferences and tailor their services accordingly. The objective was not only to sell products but to create loyal customers who repeatedly purchased and recommended the brand to others.

In this stage, the relationship became two-way. Customers could express opinions, give suggestions, and expect responses from companies. Businesses also built relationships with suppliers and distributors to ensure better service delivery.

Relationship marketing emphasized long-term profitability rather than short-term gains. This stage clearly established that strong customer relationships lead to brand loyalty, positive word-of-mouth, and sustainable competitive advantage.

6. CRM and Digital Relationship Stage

The modern stage of customer relationship is based on Customer Relationship Management (CRM) supported by information technology. The development of computers, internet, and mobile communication transformed how companies interact with customers.

Organizations now use CRM software and databases to store customer information such as purchase history, preferences, and feedback. This data helps businesses analyze customer behavior and provide personalized services. Companies communicate with customers through emails, websites, mobile apps, chatbots, and social media platforms.

Customer interaction has become fast and continuous. Customers can easily contact companies, track orders, register complaints, and receive instant support. Businesses also provide customized recommendations and targeted promotions based on customer data.

The focus has shifted from selling products to creating memorable customer experiences. Companies aim to build lifelong relationships and increase customer lifetime value. The relationship is now interactive, transparent, and customer-centric.

This stage represents the most advanced form of customer relationship, where technology helps organizations understand individual customers and meet their expectations efficiently, ensuring satisfaction, loyalty, and long-term business growth.