Marketing and Customer Relationships

Marketing today is very much focused upon business relationships, especially in the B2B markets. Historically companies would manufacture products that would be promoted to customers. However as markets have become more competitive, marketing companies seek to attract customer by building strong relationships so that customers are ‘retained’ i.e. you keep hold of your customers. This is the basis for relationship marketing, which we consider here as marketing and the customer relationship.

The marketing concept, customer focus and relationship marketing.

At this point in our studies we can now identify a path which connects the marketing concept, customer focus and relationship marketing. The marketing concept centres all organisational activities upon the customer (which is our customer focus) and if we think in terms of the long-term we have now added relationship marketing. Marketing focuses everything on our customer and their recruitment, their retention into the long-term, and finally marketing aims to extend products and services to the same customers from other product categories. So historically marketers would ‘acquire’ or recruit customers whereas today we acquire customers and then we ‘retain’ them.

There are a couple of theoretical tools that we can use here. So in this next section we are going to take a look at the Pareto principle and the loyalty ladder, which both help us to understand how we move from customer acquisition to customer retention and the implications for marketing.

Think about the value-added, high quality airlines, such as Emirates. Companies such as these are specialists in building the customer relationship and it is obvious that they add value at each customer contact point. You are treated to high levels of customer service from the moment that you check-in, during your flight and even when you have finished using their service. For example, airlines have air miles promotions and upgrades which keep the customer flying with the company and ‘retains’ them as a customer.

The key to relationship marketing is the long-term customer relationship. So if you recall your introduction to marketing definitions, this is at opposite ends of the scale to be production or product orientation which is the basis for modern marketing. As a rule of thumb, relationship marketing tends to be practised well in the airline industry and in the travel industry. However branding is another way of maintaining the customer relationship, as is innovation and design. Nike and Apple may not deliver the same amount of face-to-face relationship building, but they do have very loyal long-term customers. Try to think of other examples of businesses that practice strong relationship marketing.