RELATIONSHIP MARKETING

By Olatunji Toyib

01/26/09
OUTLINE
 What is relationship marketing.
 Definition of relationship marketing.
 Background to relationship marketing.
 The essence of relationship marketing.
 Relationship marketing.
 Comparison.
 Elements of relationship marketing.
 Ladder of customer loyalty.
 The relationship developed by …
 Why is retention important ?
 Example of relationship marketing activities.
 Summary of relationship marketing.
 Conclusion

01/26/09
What is Relationship
Marketing ?
A long term strategy to build relationships with individual
customers.

• Relationship marketing is a form of marketing

developed from direct response marketing
campaigns which emphasizes customer retention
and continual satisfaction rather than individual
transactions and per-case customer resolution.

• Relationship marketing differs from other forms

of marketing in that it targets an audience with
more directly suited information on products or
services which suit retained customer's interests,
as opposed to direct or "Intrusion" marketing,
which focuses upon acquisition of new clients by
01/26/09
targeting majority prospective client lists.
Definition of Relationship
Marketing

 The consistent application of up to date

knowledge of individual customers to products
and services design in order to develop a
continuous long term relationship.
 Relationship Marketing focuses on the firms
attention on customers retention with a view to
building a long term relationship with a
customer.

01/26/09
Background to Relationship
Marketing
 Success comes from attracting and retaining
customers but retention is often neglected.
 Most companies’ marketing efforts is focused
on getting customers with little attention paid
to keeping them.
 The average company loses between 10% and
30% of its customers each years.
 There is a high correlation between customer
retention and profitability.

01/26/09
Essence of Relationship
Marketing
1. Looks at each customer as an individual and tries to
establish a relationship.
2. Emphasis on trust, honesty, commitment and promise
keeping.
3. Development of an ongoing relationship with customers.
4. Activities are directed towards existing customers based on
interaction and dialogue.
5. Cultivation of key customers.
6. Profit through a decrease in customer turnover and a
strengthening of the relationship.
7. Orientated towards product benefits rather than product
features.
8. Adoption of total quality approach.
9. Development of employees to maintain contact with
customers.
10. Long term, continuous series of transactions between the
parties.
01/26/09
Relationship
Marketing.
The Relationship Marketing perspective is
based on the notion that on top of the value of
product s and services that are exchanged,
the existence of a relationship between the
two parties creates additional values for the
customer and also for the supplier or services
provider.

01/26/09
Comparison

Additional Marketing Relationship

Marketing
Transaction based. Focus on customer
relations
Aim is to seek new customers. Continuous customer
contact.
Focus on single scale. Importance of
product benefits.
Discontinuous customer contact.Longer time scale
Importance of product benefits. High customer
benefits.
Short time scale. Quality is the
concern of all..
Less emphasis on services. Regular
01/26/09
communication.
Why is retention so important?
Loyal customers are valuable because:
• They do not have to be acquired
• The cost of acquiring new customers can be
substantial.
• They don’t need to be persuaded
• They need less time from sales staff.
• Their account is already set up
• They buy more and a broader range of
products
• They become less sensitive to price over time
• They can recommend by word of mouth.
• They cost less to service as they are familiar
with the companies ways of doing business
• They are more predictable.
• They make it more difficult for new firms to
01/26/09
enter the market or increase their market
Element of Relationship
Marketing

RELATIONSHIP MARKETING

Quality Customer service Marketing

01/26/09
Ladder of customer loyalty

Description of buyer Marketing

Activities
5. Advocate Customer
Keeping
4. Supporter
3. Client
2. Customer
1. Prospects Customer
Catching
The relationship is
developed by.
 Satisfying the customer
 Adding value
 Privileges
 Customer orientation
 Use of data base
 Two way communication.
 Quality products
 Loyalty schemes

01/26/09
Examples of Relationship Marketing
activities
• Relationship Marketing has long been a feature of B2B
marketing
• Examples in consumer or B2C marketing include:
3. Supermarket loyalty
4. Provision of technical support
5. After sales services
6. Direct and database marketing
Summary of relationship
marketing
• Customer retention rather than
attraction.
• Ongoing relationship rather than
one.
• Regular contact.
• Quality and customer satisfaction.
• Spirit of trust.
• Work towards partnership.
Conclusion

• Relationship with customers should

be targeted at retaining the
existing customers rather than
laying more emphasis on getting
more customers, with little or no
resources to manage them.
Thank you.