Services Marketing

Chapter 17 : Relationship Marketing

Relationship Marketing Defined

Benefits of Relationship Marketing

Benefits for the Firm
Benefits to Customers

Relationship Marketing and Transactional Marketing

Six Markets Model

Customer Markets
Internal Markets
Supplier Markets
Referral Markets
Recruitment Markets
Influence Markets

Strategy in Relationship Marketing Management

Mission and Vision
SWOT Analysis
Strategy Formulation
Quality and Relationship Marketing

Retention Strategies

Four Level Retention Strategy
Monitor Relationships
Value Addition to the Service
Increased Customer Contact
Enhanced Customer Service

Recovery of Customers

Track and Anticipate Recovery Opportunities
Solve Problems Quickly
Train and Empower Front Line Employees

Communication and Relationship Marketing

The four R's for Rewarding Relationships

Chapter Summary

Berry and Parasuraman defined relationship marketing as a process of attracting, maintaining and enhancing relationships with customers. Relationship marketing benefits customers as well as organizations. Customers can reduce their time and search costs and avoid anxiety by selecting services from a known supplier. Organizations can also save on the time and effort involved in attracting new customers.

They can also benefit from the positive word-of-mouth publicity given by loyal customers. Some of the factors that differentiate relationship marketing from traditional marketing are focus on customer service, long-term orientation, high commitment to customers, customer interaction and commitment to quality. In order to adopt relationship marketing, organizations need to maintain relations with not just the customers but also with employees, recruiters, suppliers, referrals and influencers.

Organizations need to develop a sound relationship strategy to enhance their relations with customers. The strategy is developed in a systematic way as follows – develop the mission and vision, conduct SWOT analysis, formulate strategy and develop plans to improve service quality. Some of the retention strategies used by customers are offering financial incentives, forming social bonds, customization bonds and structural bonds, monitoring relationships, adding value to services, increasing customer contact and enhancing customer service.

Sometimes, despite efforts made by organizations to offer service with zero-defects, some errors creep in and the customer may experience problems. To deal with such situations, organizations should have a proper service recovery system in place to identify and solve problems at the earliest and minimize the inconvenience caused to customers. Organizations practicing relationship marketing should give the utmost importance to two-way communication to reap the desired benefits.

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