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Relationship Marketing

and

Customer Relationship Management(CRM)

Presented by Shilpi(199)

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Objectives

1. Contrast transaction-based marketing with relationship marketing.

2. Identify each of the three levels of the relationship marketing continuum.

3. Explain how firms can enhance customer satisfaction and how they build buyer-seller relationships

4. Explain customer relationship management (CRM) and the role of technology inbuilding customer relationships.

5. Describe the buyer-seller relationship in business-to-business marketing, andidentify the four different types of business partnerships

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The Shift from Transaction-Based

Marketing to Relationship Marketing

Transaction-based marketing

Buyer and Seller exchanges characterized bylimited communications and little or no ongoing

relationship between the parties

Relationship marketing

Development and maintenance of long-term,

cost-effective relationships with individualcustomers, suppliers, employees, and otherpartners for mutual benefit

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Customer relationship management

The combination of strategies and tools

that drive relationship programs, re-orientating the entire organization to a

concentrated focus on satisfyingcustomers

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Forms of Buyer-Seller Interactions on a Continuum fromConflict to Cooperation

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Comparing Transaction-Based Marketing andRelationship Marketing Strategies

Characteristic Transaction Marketing Relationship Marketing

Time orientation

Organizational goal

Customer service

priority

Customer contact

Customer commitment

Basis of seller-customer

interaction

Source of quality

Shortterm

Make to sale

Relatively low

Low to moderate

Low

Conflict manipulation

Primarily from production

Long-term

Retaining Customer

Key Component

Frequent

High

Co-operation: Trust

Companywide

commitment

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The Relationship Marketing Continuum

First Level: Focus on Price

Second Level: Social Interactions

Third Level: Interdependent Partnerships

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Three Levels of Relationship Marketing

Characteristic Level 1 Level 2 Level 3

Primary bond Financial Social Structural

Degree of

customization

Low Medium Medium to high

Potential for

sustained

competitive

advantage

Low Moderate High

Examples American AirlinesAAdvantage

program

Harley-DavidsonsHarley Owners

Group (HOG)

Federal ExpressPowerShip

program

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Enhancing Customer Satisfaction

Three Steps to Measure Customer

Satisfaction

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Building Buyer-Seller Relationships

Many customers are seeking ways to simplify theirlives, and relationships provide a way to do this

Customers find comfort with brands that have become

familiar through their ongoing relationships with

companies Such relationships often lead to more efficient

decision-making my customers and higher levels of

customer satisfaction

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How Marketers Keep Customers

Retaining customers as far more profitable than losingthem

Customers typically generate more profits for firm with

each additional year of the relationship

It has been noted that a 5 percent gain in customerretention can lead to an 80 percent increase in profits

Frequency marketing Mileage Plus

Affinity marketingsponsors name on credit cards,

non-profit contributors get restaurant discounts

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Database marketing

Benefits include: Selecting the best customers

Calculating the lifetime value of their business

Creating a meaningful dialogue that builds genuine

loyalty Application service providers (ASPs) Software to

collect, manipulate and analyze consumer/B to B

data

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Customer Relationship Management

The combination of strategies and tools that driverelationship programs, reorientating the entireorganization to a concentrated focus on satisfyingcustomers

Managing Virtual Relationships [Online toconsumers and/or business customers]

Retrieving Lost Customers [determine who, why, and

how to retrieve]

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Buyer-Seller Relationships in

Business-to-Business Markets

Business-to-business marketing involves an organizationspurchase of goods and services to support companyoperations or the production of other products

Buyer-seller relationships between companies involveworking together to provide advantages that benefit bothparties

Advantages might include the lower prices, quicker delivery,improved quality and reliability, customized product features,

and more favorable financing terms

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Choosing Business Partners

Partnership: an affiliation of two or more companies to

assist each other in the achievement of common goals

Types of Partnerships

Buyer partnership buyer has unique needs that must

be met Seller partnerships seller develops long-term

relationships

Internal partnerships within the company itself

Lateral partnerships with other compatiblecompanies, co-branding

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Improving Buyer-Seller Relationships in

Business-to-Business Markets

National Account Selling

Business-to-Business Databases[Sales Discovery System]

Electronic Data InterchangeQuick-response merchandising

Vendor-Managed Inventory (VMI)Collaborative planning, forecasting, and

replenishment

Managing the Supply Chain

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Thank You