The Nature of Relationships


Any relationship involves human element. A human interaction can greatly affect the business and its relationship with the customer. This fact is the back bone of the services industry.

The customer interaction can be one on one basis, over a phone, email, chat etc. Hence these interactions are going to determine whether customer is going to have any relationship with the customer. However human touch does not necessary create problems for the company but can also serve as a base for strong customer relationship.

Relationship marketing can be utilized to the fullest in certain types of market and develop customer relationship to business advantage.

Customer Relationship

Customer will enter in relationship with business only if they find value in company’s offering. This value begins in the mind with perception about the product and the company. Relationship can add value to customer through following:

  • The company needs to get closer to the customer and start interaction with them. Through the interaction the company is going to understand needs and requirements of the customer. This understanding of expectation may be through personalized marketing, if the product is customized.

  • By close interaction with the customer, company is going working to create a relationship of trust and commitment. This will help both company and customer make the right decision.

  • As a company progresses it start to look at more standardization and reduce customization. But through relationship marketing and human interaction this standardization can be made more acceptable.

Customer Requirements

A market consists of customer with various needs and requirements. In order to achieve economies of scale, company indulge in mass production, this is applicable to FMCG type of markets.

Relationship marketing helps in bringing customer centric approach back. One of the ways is through mass customization.

Today’s customers are looking for products which offer a high degree of customization. Customized product offer a great value to the customer and can help the company give edge over the competition.

There are four ways through which to achieve mass customization. These four ways are combination of options, personalization, and postponement and bespoke.

  1. Combination of Options: This technique lets consumer stack up their individual choices in the final product, without affect the economies of the scale. This kind of technique is more prevalent with car manufactures. This allows consumer to create a unique product suiting their requirements.

  2. Postponement: This technique involves collaboration across supply chain. All components are manufactured along the supply chain but not assembled till the last moment. This allows retailer to create exactly customer required product. This kind of technique is used by computer companies. They order different parts from different supplier and then assemble the product as per the customer requirement.

  3. Personalization: This technique converts a mass produced standard product into personalized product in one way or another. This kind of technique is often used by cake shops, for example printing family pictures, favorite cartoon characters etc.

  4. Bespoke: This technique involves creating products and services which suit individual customer requirements. This technique creates product and services which are expensive compared to customized product available through other techniques. This kind of technique is used holiday specialist, tailors etc.

    The essence of any relationship is communication. Traditionally marketing encourages creating communication which target whole audience base rather than individuals. This approach does not create relationship or value for the consumer. The direct mail is classic example of mass communication.

Social Network

Companies like to conduct business with people whom they know or are recommended by friends and family. This introduced the factor of network in building relationships. The network is extension of relationship through friends and family, with whom there would be no interactions otherwise. There are broadly three types of networks formal networks, informal networks and cultural networks.

Formal networks or association are developed more at professional level and less at personal level. The classic example of formal networks are alumni associations, sports club etc.

Informal networks are association made at personal level. The examples of informal network are friends, family, neighbors, colleagues etc.

Culture networks are association based on place of birth or religion. These networks are formed based on religion, language, social class etc.

Business Networks

Business networks are kind of extension of social networks, only differentiation here is that there is interaction among different organizations. But as in any relationship or networking it involves the human element.

A classic relationship example is between the supplier and manufacturer. There are so many interactions between buyer and supplier at various levels, starting from the CEO to finance department to quality control.

In this world of competition and ever evolving technologies differentiation is the key to success. Therefore it is important to manage customer interaction and different types of relationships.

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