Evolution of Relationship Marketing

Marketing Management has evolved to become a multi faceted and all embracing science over a period of time. Studies in Marketing do not involve the 4Ps anymore. The markets, geographies, the consumer segments have changed leading to multi tier and complex networks and relationships.

Marketing Managers of today are no longer following the same rules of game that they followed two decades ago. Technology has changed the rules of the game and competition has become more intense. Instead of concentrating on selling the product, the marketing effort is now directed to expanding the customer base and relationship.

By widening the customer base as well as expanding the depth of the customer base using relationship marketing, they see the possibility to lengthen the revenue lines. Therefore Marketing professionals to be will benefit greatly by understanding more about Relationship Marketing as well as direct marketing, service marketing and CRM etc.

From times immemorial including the times when trading used to happen through the silk route, the basis of trading was the relationship that was built on trust, loyalty and previous history of transaction. Traditionally if you analyze the jeweler’s business, you will see that the families have always been going to one jeweler for generations together. The same is the case with banker who would extend loan to a well known individual who was personally known or referred by a known person. Even while renting out a house, the owner prefers to let out to a known person or a person referred by a known party where there exists some kind of relationship. Therefore we can say that relationship has always been the basis of business.

However the growth of Relationship Marketing as a discipline and practice got an impetus post industrial era. Until this period the products and services were always produced in smaller quality where things were in short supply and were marketed in the local area. Industrialization led to mass production as well as standardization of the products and services. The businesses started expanding their geographic boundaries and exploring new markets where in it became necessary for them to evolve new methods of marketing. They understood the importance of having to reach out and build a relationship with a customer and make efforts to retain the customer rather than keep spending on marketing to new customers every time.

At this stage we do see significant changes that happened at an Organizational level. Organizations realized the importance of having to put the Customer ahead of its business. Organizational philosophy seemed to have shifted from profits, products and markets to Customer first. Right from product design to manufacturing as well as selling began to be designed around what the Customer wants, his needs, his comfort and satisfaction. Customer focus and relationship became the Organizational focus and lead to many new trends in manufacturing methods the most significant being the concept of TQM or Total Quality Management.

On the marketing front too, the managers had to come up with new channels for marketing and sales for they had to reach out to bigger markets and new customer segments. As a result we saw the emergence of Direct Mailer or catalogue sales was born in the 1960s. Information technology further enhanced the marketing methods whereby database marketing, direct mailing and customer loyalty programs along with marketing services came into being. With the advent of internet we have see several more marketing methods like e commerce, online selling, one to one selling happening. All these marketing channels have been built around the concept of relationship marketing. We as consumers have now are used to being courted by the companies and given individual attention. Most of our purchases of products and services are based on relationships with companies that make us comfortable and valued.