Relationship marketing

Relationship marketing Was first defined as a form of marketing Developed from direct response marketing campaigns qui emphasizes customer retention and satisfaction , Rather than a focus on sales transactions. quote needed ]

Relationship marketing differs from other forms of marketing it fait que Recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. [1]

With the growth of the internet and mobile platforms , the relationship marketing has continued to evolve as technology opens up more collaborative and social communication channels. This includes tools for managing relationships with customers who go beyond demographic and customer service data. Relationship marketing extends to include inbound marketing efforts, (a combination of search optimization and strategic content), PR , social media and application development.


Relationship marketing refers to an arrangement where both the buyer and seller have an interest in providing a more satisfying exchange. This approach tries to transcend the post purchase-exchange process by providing a more personalised purchase, and uses the experience to create stronger ties.Relationship marketing is different from other marketing techniques with customers.

From a social anthropological perspective, relationship marketing theory and practice can be construed as commodity exchange That exploits features of gift exchange . [2] It seems that marketers – consciously or intuitively – are recognizing the power contained in ‘pre-modern’ forms of exchange and have begun to use it. This perspective opens up fertile one marketing ground for future research, Where marketing theory and practice can benefit from in-depth research of the principles governing gift exchange .

According to Liam Alvey, [3] relationship marketing can be applied when there are competitive product alternatives for customers to choose from; and when there is an ongoing desire for the product or service.

The practice of relationship marketing has been facilitated by several generations of customer relationship management. For example, an automobile manufacturer maintaining a database of when and how to repeat customers buy their products, the options they choose, the way they finance the purchase etc., is a powerful position to develop one-to-one .

In web applications, the consumer shopping profile can be built on the website. This information is then used in other countries. These predicted offerings can be viewed through the cross-sell, email recommendation and other channels.

Relationship marketing has also migrated back into direct mail, allowing marketers to take advantage of the capabilities of digital, toner-based printing to produce unique, personalized pieces for each recipient through a technique called ” variable data printing “. Marketers can personalize documents in their databases, including name, address, demographics, purchase history, and dozens (or even hundreds) of other variables. The result is one that is ideally tailored to the individual’s needs and preferences.


Relationship marketing has also been greatly influenced by reengineering . According to (process) reengineering theory, organizations should be structured according to complete tasks and processes rather than functions. That is, cross-functional teams should be responsible for a whole process, from beginning to end, rather than having the work of one another. Traditional marketing is said to use the functional (or ‘silo’) department approach. The legacy of this can still be seen in the traditional oven of the marketing mix . Pricing , product management , promotion , and placement. According to Gordon (1999), the marketing mix is ​​approaching to a flexible framework for the development of customer relationships and relationships. , rather than markets and products.

In contrast, relationship marketing is cross-functional marketing. It is organized around processes that involve all aspects of the organization. In fact, some commentators prefer to call relationship marketing “relationship management” in recognition of the fact that it involves much more than just marketing.

Because of its broad scope, relationship marketing can be effective in many contexts. As well as being able to report ‘for profit’ businesses, research indicates that relationship marketing can be useful for organizations in the voluntary sector [4] and also in the public sector. [5]

Christopher Martin, Adrian Payne, and David Ballantyne [6] at the Cranfield School of Management claim That relationship marketing Has the potential to forge a new synthesis entre quality management, customer service management, and marketing.



Relationship marketing relies upon the communication and acquisition of consumer requirements by the customer through an ” opt-in ” system. [7] With particular relevance to customer satisfaction and the relative price and quality of goods and services produced by the company. May be broad, accuracy of communication and overall readiness to be more important than direct marketing, but has less potential for generating leads than direct marketing and is limited toViral marketing for the acquisition of further customers. quote needed ]


A principle of relationship marketing is one of mutually beneficial relationship [7] [8] This technique is counterbalancing new customers and opportunities The term “leaky bucket theory of business” is used in the context of maximizing profits and counteracting the “leaky bucket theory of business”. [9] [10]This process of “churning” is more economically viable than retaining all customers by using new customers. [11]

Many companies in competing markets will need to allocate large amounts of resources or attention to customer retention. much more extensive resources to cause defection from competitors. [11] However, it is suggested that because of the extensive marketing theory of the marketplace , it is suggested that rather than maintaining them, the majority use of direct marketing as its importance becomes more recognizable. [11]

It is claimed by Reichheld and Sasser [12] that a 5% improvement in customer retention can increase profitability between 25 and 85 percent (in terms of net present value ) depending on the industry. However Carrol, P. and Reichheld, F. [13] dispute these calculations, claiming they result from faulty cross-sectional analysis. Research by John Fleming and Jim Asplund says that it is more efficient than usual.

According to Buchanan and Gilles, [14] the increased profitability associated with customer retention efforts has been established with a customer.

  • The cost of acquisition OCCURS only at the Beginning of a relationship, so the walk along the relationship, the lower the amortized cost.
  • Account maintenance costs decline as a percentage of total costs.
  • Long-term customers tend to be less inclined to switch, and also tend to be less sensitive. This volume can not be maintained in volume sales volume.
  • Long-term customers can initiate a new word of mouth promotions and referrals.
  • Long-term customers are more likely to purchase ancillary products and high margin supplemental products.
  • Customers who have a relationship with the market are more likely to be competitive, making it difficult for competitors to gain market share.
  • Regular customers tend to be less expensive because they are familiar with the process, require less “education”, and are consistent in their order placement.
  • Increased customer retention and loyalty makes the employees’ jobs easier and more satisfying. In turn, happy employees feed back to the customer satisfaction in a virtuous circle .

Relationship marketers speak the relationship ladder of customer loyalty . It’s all about loyalty. The ladder’s first rung consists of “prospects”, that is, people who have not yet made it to the future. This is followed by the successive rungs of “customer”, “customer”, “supporter”, “advocate”, and “partner”. The relationship marketer’s objective is to “help” customers get as high as possible. This is generally used to provide more personalized service and to provide a service that exceeds expectations at each step.

Customer retention efforts involve considerations such as the following:

  1. Customer valuation – Gordon (1999) describes how to value customers and categorizes them according to their financial and strategic position.
  2. Customer retention measurement – Dawkins and Reichheld (1990) calculated a company’s “customer retention rate”. This is simply the percentage of customers at the beginning of the year that are still customers by the end of the year. In accordance with this statistic, an increase in retention rate of 80% to 90% is associated with a doubling of the average life of a customer relationship from 5 to 10 years. This ratio can be used to compare between products, between market segments, and over time.
  3. Determine the reasons for defection. This involves probing for details when talking to train customers. Other techniques include the analysis of customers’ complaints and competitive benchmarking (see competitor analysis).
  4. Develop and implement a corrective plan – This could involve actions to improve employee practices, using benchmarking to determine best practices, recognizing the approval of top management, making adjustments to the company’s reward and recognition systems, and using recovery strategies to eliminate causes of defections.

A technique to calculate the value of a sustained customer relationship has been developed. This calculation is typically called customer lifetime value .

Retention strategies may also include building barriers to customer switching. This may be done by product bundling (with multiple products or services), cross-selling (selling related products to current customers), cross promotions (selling discounts or other promotional incentives to purchasers) of related products), loyalty programs (giving incentives for frequent purchases Single) Increasing switching costs (Adding termination costs, Such as mortgage termination fees) and Integrating computer systems of multiple organisms (Primarily in industrial marketing).

Many relationship marketers use a team-based approach. The rationale is that the more points of contact between the organization and the customer, the stronger will be the bond, and the more secure the relationship.


Relationship marketing and traditional (or transactional) marketing are not mutually exclusive and there is no need for a conflict between them. In practice, a relationship-oriented marketer still has choices, depending on the situation. Most firms blend the two approaches to their portfolio of products and services. citation needed ] Many products have a service component. quote needed ]

Internal marketing

Relationship marketing stresses what it calls internal marketing, or using a marketing orientation within the organization itself. It is claimed that many of the relationship marketing attributes like collaboration, loyalty and trust determines what “internal customers” say and do. According to this theory, every employee, team, or department is a supplier and a customer of services and products. An employee obtains a service at a point in the value chainand then provides a service to another employee further along the value chain. If internal marketing is effective, every employee will provide both. It also helps employees understand the significance of their roles and their roles in relation to others. If implemented well, it can also support the perception of value added, and the organization’s strategic mission. Further it is claimed that an effective internal marketing program is a prerequisite for effective external marketing efforts. (George, W. 1990)

The six markets model

Christopher, Payne and Ballantyne (1991) [6] identify six markets which claim to be central to relationship marketing. They are: internal markets, supplier markets, recruitment markets, referral markets, influence markets, and customer markets.

Referral marketing is developing and implementing a marketing plan to stimulate referrals. Although it may be the most effective part of an overall marketing plan, it is often the most effective part of an overall marketing plan and the best use of resources citation needed ] .

Marketing to suppliers is designed to ensure long-term conflict-free relationships in which all parties understand each other’s needs. Such a strategy can reduce costs and improve quality.

Influence markets involve a wide range of sub-markets including: government regulators, standard bodies, lobbyists, stockholders, bankers, venture capitalists, financial analysts, stock brokers, consumer associations, environmental associations, and labor associations. These activities are carried out by the public relations department, but relationship marketers feel that marketing is all about the responsibility of everyone in the organization. Each market may require its own explicit strategies and a separate marketing mix for each.

Live-in Marketing

Live-in Marketing (LIM) is a variation of marketing and advertising in which the consumer is allowed to sample or use a product. Much like product placement in film and television is a non-invasive and much less effective way of advertising.


While LIM represents an entirely untapped avenue of marketing for both big and small brands it is not all that novel an idea. With the rising popularity of experiential and event marketing [15] in North America and Europe, Compared to traditional medium-market advertising, industry analysts see LIM as a natural progression.


LIM Functions de la premiere que la marketing ou advertising agencies. From that point forward avenues such as sponsorship or direct product placement and sampling are explored. Unlike traditional event marketing, LIM suggests that end-users will sample the product or service a comfortable and relaxed atmosphere. The idea behind this technique is that the end-user will have as positive as possible an interaction with the given word leading to word-of-mouth [16]communication and potential future purchase. If the success of traditional event and marketing is shared with LIM, then it could point to a lucrative and low-cost means of product promotion. However, this means of advertising is still in its infancy and is required to determine the true success of such campaigns. The first company to explicitly offer LIM services was Hostival Connect in late 2010.

See also

  • Personalized marketing
  • Customer relationship management


  1. Jump up^ PALMATIER, ROBERT. Relationship Marketing . MARKETING SCIENCE INSTITUTE.
  2. Jump up^ Rus, Andrej (2008). “‘Gift vs. commoditiy’ debate revisited”.Anthropological Notebooks 14 (1): 81-102.
  3. Jump up^ Berry, Leonard (1983). Relationship Marketing . American Marketing Association, Chicago. p. 146. ISBN  0-87757-161-9 .
  4. Jump up^ Bussell, H., & Forbes, D. (2006). Developing relationship marketing in the voluntary sector. Journal of Nonprofit & Public Sector Marketing, 15 (1-2), 151-174.
  5. Jump up^ Gillett, AG (2015). REMARKOR: RELATIONSHIP MARKETING ORIENTATION ON LOCAL GOVERNMENT PERFORMANCE. Journal of Services Research, 15 (1), 97.
  6. ^ Jump up to:b Christopher M., Payne, A. and Ballantyne, D. (1991). Relationship Marketing . Butterworth-Heinemann, Oxford. p. 264. ISBN  0-7506-4839-2 .
  7. ^ Jump up to:b Gale, BT, Chapman., RW (1994) Managing Customer Value: Creating Quality and Service That Customers Can See New York: Free Press
  8. Jump up^ Gordon, Ian (1999). Relationship Marketing: New Strategies, Techniques and Technologies to Win the Customers You Want and Keep Them Forever . John Wiley and Sons Publishers. p. 336. ISBN  0-471-64173-1 .
  9. Jump up^ Kotler, Philip, Armstrong, Gary, Saunders, John and Wong, Veronica. (1999). “Principles of Marketing” 2nd ed. Prentice Hall Europe.
  10. Jump up^ Kotler, Philip, Armstrong, Gary, Saunders, John and Wong, Veronica. (1999)., P482
  11. ^ Jump up to:c Kotler, Philip Armstrong, Gary, Saunders, John and Wong, Veronica. (1999)., P483
  12. Jump up^ Reichheld, F. and Sasser, W. (1990) “Zero defects: quality ed to services”,Harvard Business Review, Sept-Oct, 1990, pp 105-111
  13. Jump up^ Carrol, P. and Reichheld, F. (1992) “The fallacy of customer retention,” Journal of Retail Banking, Vol 13, No. 4, 1992
  14. Jump up^ Buchanan, R. and Gilles, C. (1990) “Value managed relationship: The key to customer retention and profitability”, European Management Journal, Vol 8, No. 4, 1990
  15. Jump up^ Ad, Marketing Spending to Rise 3.9% in 2008, Media Post, Erik Sass 16 July 2008
  16. Jump up^ EMI Strategic Insights Report: The Viral Impact of Events, Event Marketing Institute 2007