The future of relationship marketing
Relationship marketing is a modern concept. This concept focuses on developing, maintaining and retaining long term relationship with customers for the benefit of the organization. Relationship marketing is a strategic concept which needs to be accepted throughout the organization and key to the future financial success.
In the last couple of decades with the advent of information technology and internet, the customer power is ever increasing and there is more transparency. Customers do not just want mass produced goods, but they want manufacturers to provide value which makes them delightful and happy.
Customer satisfaction is beginning of relationship and future collaboration.
New Technology and Relationship Marketing
Innovation and technology are ever evolving. The concept of search engine optimization is the key to organization in the age of the internet. Blogs, video clips, social networks, etc. play an increasing important role in relationship marketing. These mediums are interactive in nature and help companies maintain real time relationship with consumers.
Early adoption of new technology and associated capabilities is seen as crucial for organizations to succeed in an international business environment. Also advent of Web2.0 and its utilization would provide companies the competitive advantage in coming decades.
Web 2.0 refers to enhancing capabilities of the internet and its broader application in building customer relationships. The enhance capabilities of internet include Podcast, Webcast, Intranet and Microsites. A podcast is a digital video or audio available over the internet for download. Webcast refers to the usage of the internet to broadcast any specific type of messages. Intranet refers to the usage of internet within organization for information exchange. Microsite refers to smaller associated sites to supplement primary site.
Integrated Customer Approach
The field of information technology is going to be ever changing and will become more sophisticated. But the key focus will remain on the relationship component by utilizing consumer experiences and ideas. As the sophistication in product and services increase, the basis of differentiation will reduce, thus customer experience and relationship will drive the value of satisfaction.
With the increase of the interactive medium, more power will start flowing into consumer and they will exert more control in relationship with the organization. This will help companies read the market requirement well in advance.
Customer related innovation will be guided by interactive dialogue made possible by newer internet technologies. The increased transparency can benefit companies in many ways. The transparency can help companies identify consumers with whom they would like to make long term relationships and would be able to target them with precise and clear communication.
Trust is the key element of a continued and successful relationship. Generally, trust in companies is very difficult to develop and easy to dismantle. Also the customers like to be associated with companies they can identify with. The reference groups of fellow consumers also play important role in building trust element.
Reference groups are kind of forums where like-minded people come and share their opinion and experience with another. Many consumers are making their buying decision after approaching and reading through these reference groups.
Social networks also have been steadily increasing their clout over the internet. These social networks form ideal platform for companies to undertake advertising campaign and even direct sales.
Every action taken by the company in creating and maintaining a relationship involves financial investment. Hence it becomes very crucial for companies to develop metrics which can help them track financial benefit for a given relationship. Companies are able to track their valued customers through closer relationship and developing better and effective techniques for retaining them.
With so many changes happening on the technology front, it is important that companies are able organize themselves in the best suitable way. Organizations are beginning to understand that primary asset of an organization are its customers. This primary asset needs to be nurtured and developed in a way that helps organization survive this era of global competition.
Customer as Driving Force
The customers are going to be in the center of any strategy companies is going to develop. If a particular customer is currently generating lower margin, but has a great future potential than it makes more sense for the company to develop strategies around that customer. A customer who is currently at high margin and also has the potential of generating more margins would also be in focus for the organization. The customer with high margin, but lower future potential is an ideal candidate for re-engineering strategy to bring them back into higher margin. However the candidate with low margin and lower potential should be completed removed from company’s transaction.
Relationship marketing is serving as a paradigm shift for the all organization. It offers organization fullest potential to develop and prosper. As companies are able to deliver value and maintain healthy relationships with the consumer, their profitability is also increasing. Customer retention becomes easier and attracting a new customer is also more cost effective. This benefit of relationship marketing is not restricted to customer but also with supplier and all internal-external stakeholders.
Authorship/Referencing - About the Author(s)
The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
- Relationship Marketing - Introduction
- Relationship Marketing – Background and Theory
- Evolution of Relationship Marketing
- The management of relationships
- Importance of Relationship Marketing
- The Nature of Relationships
- Relationship Marketing and CRM
- Organizations & Relationship Marketing
- Organizations and Types of Relationships
- RM - Company & Marketing Perspective
- Relationship Marketing Sells
- Electronic Relationship
- Internal Relationships
- External Relationships
- Networks and Relationships
- Supplier Relationship
- Leveraging on Supplier Relationships
- RM with Business Associates & Partners
- RM and Business Strategy
- RM and Green Marketing
- CRM as Relationship Marketing Tool
- RM through Multiple Stake Holders
- Internal Relationship Marketing
- Relationship Marketing in Practice
- Relationship Management & Customers
- RM and Marketing Strategy
- RM and Legal Function
- The future of relationship marketing