Relationship Marketing and CRM, Relationship Development Strategies21st November 2020
Relationship Marketing was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes Customer retention and Satisfaction rather than a dominant focus on Sales transactions. According to Liam Alvey Relationship marketing can be applied when there are Competitive products alternatives for customers to choose from and when there is an ongoing and periodic desire for the product or service.
CRM is based on the principles of relationship marketing, so a brief review of the development of marketing is helpful to understanding the evolution of CRM. As industries have matured, there have been changes in market demand and competitive intensity that have led to a shift from transaction marketing to relationship marketing.
The emergence of CRM as a business strategy has radically transformed the way organizations operates. There has been a shift in business focus from traditional to relationship marketing where the customer is at the centre of all business activity and organizations are now desperately trying to restructure their processes around the needs of their strategically significant customers.
The dynamics of the business ecosystem have changed the way in which companies do business both in relationship management and the streamlining of their operations. Relationship marketing is emerging as the core marketing activity for businesses operating in fiercely competitive environments.
The practice of relationship marketing also has the potential to improve marketing productively through improved marketing efficiencies and effectiveness.
Retaining and developing customers has long been a critical success factor for businesses. In that sense, Customer Relationship Management (CRM) is not new, previously falling under the guise of customer satisfaction.
Relationship marketing seeks to change this perspective by managing the competing interests of customers, staff, shareholders and other stakeholders. It redefines the concept of ‘a market’ as one in which the competing interests are made visible and therefore more likely to be managed effectively.
Relationship marketing emphasizes two important issues. First, you can only optimize relationships with customers if you understand and manage relationships with other relevant stakeholders. Most businesses appreciate the critical role their employees play in delivering superior customer value, but other stakeholders may also play an important part.
Second, the tools and techniques used in marketing to customers, such as marketing planning and market segmentation, can also be used equally as effectively in managing non-customer relationships.
Relationship Marketing Strategies:
- Make Every Customer Interact:
The first strategy to build a strong customer relationship and make every customer interact. Each and every interaction with a customer is a gift and should be valued. Getting into the mind of customers and knowing their needs will help know what the customer want and try to give that.
- Follow through on Commitments and Claims about Products or Services:
The business must make a specific promise to the customer and deliver on that promise if it intends to win the heart of the customer. False claims however should be avoided at all cost as it can harm the credibility. Promise made must be fulfilled.
- Offer Benefits and Product Value that Responds to the Customer’s Desires:
Another positive step to build a strong customer relationship is to offer value to the customer. Customers should know that firms provide the best quality.
- Treat Customers as Individuals who are Respected and Valued:
An retailer knows how difficult it is to find a customer and further retain such customer. Each customer is an individual his needs and preferences differ. His tastes and likings differ. Retailer has to understand such individual differences and try to meet each individual customer need.
- Listen to Customers:
If complaints are handled properly and quickly then they become a gift to the retailer. Retailer should be available and accessible when customers have questions, concerns or comments. If the shopkeeper can listen to the customers that itself will help to develop a bond and relationship between them.
- Build a Strong Brand Identity:
The customers should identify the products in the midst of the crowd and that is possible by creating a winning slogan, tagged with a catchy logo and a unique theme. Most important, if a specific promise is made, they have to deliver on that promise.
- Surround your Customers with Valuable Information:
Keep the customers informed on the latest trend, price or development by using emails, website content, social media and other methods of outreach. The firm must also make it easy for customers to reach them. Customer should be regularly updated with product its marketing and any change in that.
- Business must have a Website:
The firms should consider making their website user – friendly and easy to navigate for new and existing customers. The World Wide Web (www) is making it easier for businesses to build a strong customer relationship with their customers.
- Reward Loyal Customers:
Most of the business goes after new customers while forgetting that the existing customers need to be taken care of. Introducing a loyalty program is an effective relationship marketing strategy. Nothing strengthens a bond more than appreciation.
Thanking the customers for sticking to the brand will go a long way to make them know that they are very important. A simple thank you package might be all the business needs to connect personally with the existing customers.
Notes on CRM:
Customer Relationship Management (CRM) can prove a vital tool in ensuring the success of a business through enhancing customer loyalty. CRM recognizes that customers are the core of a business and that the success of a company depends on effectively managing relationships with them.
It focused on building long-term and sustainable customer relationships that add value to both the customer and the company.
The probability of selling is to a new customer standing at just 15 per cent, while the chance of selling to an existing customer is 20 per cent. Also, a typical dissatisfied customer will tell eight to ten people of his or her experience, with the primary reasons for dissatisfaction including, lack of customer services or poor customer services and busy phone lines and unanswered e-mails.
Seventy per cent of customers who complain about products or services are likely to conduct business with the company again if, the complaint is addressed quickly. 90 per cent of existing companies do not have the necessary sales and service integration to support E- commerce. Introduction of CRM to a business could address these problems and improve relations with the customers.
CRM overlaps with the concept of relationship marketing, but CRM has a broader take on the concept since it included a one-to-one relationship, focusing on the philosophy of treating every customer differently.
A company must continuously interact with customers individually as this kind of marketing can create high customer loyalty and in turn, help to add to the company’s profitability. However, as the world has turned more and more towards ever-advancing technology for solutions, many companies who have used CRM are now taking the concept to the cyber-world, through E-CRM. Through internet technologies, customer data can be easily uploaded into marketing, sales and customer service applications and analysis.