RELATIONSHIP

MARKETING
Kaushik Samant

Relationship Marketing 1
 What is Relationship Marketing?

 Why Relationship Marketing?

 Are there any Benefits from RM?

 What are the Requisites for successful RM?

 Are there any challenges?

Relationship Marketing 2
 Relationship Marketing
 Strategic orientation, that focuses on
keeping current customers and
improving relationships with them.

 The focus is less on attraction, and

more on retention and enhancement of
customer relationships.

Relationship Marketing 3
Stages in Relationship
Marketing

Relationship Marketing 4
Underlying Logic of
Customer Retention

Relationship Marketing 5
 Need for Relationship
Marketing
Transactional Marketing Relationship Marketing
1. Single sale recruitment 1. Retention of customer
2. Product Features 2. Product benefits &
systematic solution
3. Short term 3. Long term Relationship
4. Customer service taken
4. Little importance to
as most important
Customer service
element
5. Communicate to
5. Communicate to make
persuade sense & meaning
6. Goal is to delight the
6. Goal is customer customer
satisfaction
Relationship Marketing 6
Benefits of Relationship
Marketing
Customers:
1. Receipt of greater value

2. Confidence benefits:
trust , confidence in provider, reduced anxiety

1. Social benefits:
familiarity, social support, personal relationships

1. Special treatment benefits:

special deals, price breaks

Relationship Marketing 7
FIRMS:
1. Economic benefits:
increased revenues, reduced marketing and administrative costs

regular revenue stream

1. Customer behavior benefits:

strong word-of-mouth endorsements, customer voluntary performance

social benefits to other customers, mentors to other customers

1. Human resource management benefits:

easier jobs for employees, social benefits for employees

employee retention

Relationship Marketing 8
Benefits of Relationship
Marketing

Relationship Marketing 9
 Strategies for Building
Relationships
Core Service Provision:
Service foundations built upon delivery of excellent
service: satisfaction, perceived service quality, perceived
value

Quality in the core service

Segmentation and Targeting:
Focus and Competitive Advantage, Not worth the effort ,
Profitability Segments

Relationship Marketing 10
Market Models

custom
er

Relationship Marketing 11
 “80/20” Customer Pyramid
What segment spends more with us
Most profitable over time, costs less to maintain,
customers spreads positive word-of-mouth?

What segment costs us in time,

effort and money yet does not
provide the return we want?
Least profitable What segment is difficult to do
customers business with?

Relationship Marketing 12
Difficulties faced by customers in
switching service providers

Switching Barriers:
 customer inertia
 switching costs:

 setup costs, search costs, learning costs,

contractual costs,
 Perceived risk

Relationship Marketing 13
RELATIONSHIP CHALLENGES

Not all customers are good

relationship customers:
 Customer is not always right
 Wrong segment
 Not profitable in the long term
 Difficult customers

Relationship Marketing 14
Life Cycle of Satisfied customer

Relationship Marketing 15
 Conclusion

Relationship marketing is all about

creating, building and maintaining
the relationships with the customers
for the long-term profits.

Relationship Marketing 16
THANK YOU

Relationship Marketing 17