What is relationship development and how does it work? Amazon Web Service Companies invest extensive resources and money to get customers' attention, make a sales pitch, and then facilitate a sale. Therefore, they use different strategies for transactional sales versus growing relationships. Many marketing departments split resources to focus on one or the other. [Accessed: 05 June 2023] Relationship marketing is a tactic to form long-term relationships with prospects and customers. Relationship marketing focuses on overall experience with the brand rather than sales alone. [Accessed: 05 June 2023] A brand experience helps attract new customers and retain them for a long time, earning repeat sales. Businesses must foster customer loyalty and provide products that those customers deem exemplary. In turn, customers stay with the company longer and make unsolicited referrals. Companies that invest in relationship marketing have the potential to achieve a much greater ROI than with transactional marketing. In some instances, it is not always the case. It’s important to realize that in talking about how mismatched expectations can lead to fighting, we are not saying you don’t have a right to expect anything out of your partnership. The opposite is true: You deserve to be treated with dignity and respect, and so does your partner. Expect intimacy and passion. Expect unconditional love and support. These are reasonable expectations in a relationship and fall more under the category of standards than expectations. With relationship marketing, the goals can vary, including increased revenue, reducing customer turnover, higher customer lifetime value or average order size, and lowered costs. Pros and cons of relationship marketing. Any business strategy has benefits and challenges. Relationship marketing yields high-value free referrals but also takes time to pay off, for example. Pro: Returning customers purchase more than first-time customers. Relationship marketing increases the likelihood of retaining customers. These customers turn into repeat buyers, from cross-selling or upselling. Customer lifetime value (CLV) refers to what a customer spends over time with a brand. The more they buy, the higher their CLV. Pro: Free word-of-mouth marketing. Customers who have a positive experience with a brand because of the relationship or the value the product provides are likely to tell others. These customers create a positive, viral, one-on-one marketing experience. A good experience isn't enough to generate this type of marketing. Consumers are more likely to spread the word and leave positive reviews when an experience goes beyond their expectations. Pro: Personal connections. Whether a business sells directly to customers or sells a service to businesses, they always reach a person who makes the purchase decisions. Personal connections with the buyers create meaningful individual interactions. Customers want the following: • to be heard; • to have problems and challenges addressed and ; • to receive regular communication, follow-through, and support. These personal connections build strong relationships and result in more, or continued, business. Con: It takes time. A business needs to take the time to build customer relationships. Spend more time with each customer, for example. Or give customers room to make a purchase decision. Many sales do not happen on the first engagement point. It takes many interactions to establish the trust and relationship needed to garner results. Con: Negative feedback. Word of mouth, if negative, can ruin a relationship marketing campaign. Consumers often expect immediate gratification. One negative experience shared with others has the power to derail a campaign. Consumers share experiences fast. If they don't get what they want, in the timeframe they expect, they will tell others about their bad experience. Balance strong relationships with the ability to capture buyers at the right time. Con: New customers are no longer a priority. A strong relationship marketing strategy aims for customer retention and growth. But a business cannot succeed without new customers. Don't neglect opportunities to foster new relationships. No matter how much an organization prioritizes retention, some customers leave, and growth calls for repeat and new purchases. Source: LaFleur, G. (2021) How relationship marketing works, its pros, cons, and levels: TechTarget, Customer Experience. Q.2.1 In order to achieve customer loyalty, certain stages have to be followed by any marketer. Discuss each of the stages in relationship development. Further provide some examples from the case study to support your answers accordingly. Q.2.2 With reference to the above case study explain the three prerequisites that a business should have implemented before implementing a CRM strategy. Provide practical examples to demonstrate your understanding.
What is relationship development and how does it work? Amazon Web Service Companies invest extensive resources and money to get customers' attention, make a sales pitch, and then facilitate a sale. Therefore, they use different strategies for transactional sales versus growing relationships. Many marketing departments split resources to focus on one or the other. [Accessed: 05 June 2023] Relationship marketing is a tactic to form long-term relationships with prospects and customers. Relationship marketing focuses on overall experience with the brand rather than sales alone. [Accessed: 05 June 2023] A brand experience helps attract new customers and retain them for a long time, earning repeat sales. Businesses must foster customer loyalty and provide products that those customers deem exemplary. In turn, customers stay with the company longer and make unsolicited referrals. Companies that invest in relationship marketing have the potential to achieve a much greater
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