Topic 5 Relationship Marketing
Relationship Marketing Designed to create, maintain, and enhance strong relationships with customers and other stakeholders
Why is it important?
Costs five times as much to attract a new customer as it does to keep a current one satisfied
Claimed that a improvement in customer retention can cause an increase in profitability
Easier to deliver additional products and services to an existing customer than to a first-time “buyer.”
Types of Markets
Supplier Markets
Internal Markets
Recruitment Markets
Referral Markets
Influence Markets
Customer Markets
Customer Lifetime Value
Losing an existing customer means losing the entire revenue stream that customer represents – not just that single encounter or sale.
From this they concluded that long-term relationships lead to lower relationship costs and higher profits
Relationship Lifecycle
Acquisition
Development
Retention
Decline
Attracting Retaining and Growing Cusomers
Customer Satisfaction The extent to which a product or service’s perceived performance matches a buyer’s expectations based on:
Past buying experiences
Friends,family and other associates
Information about the competition
Promises made in marketing materials
Customer Loyalty and Retention Customers that are satisfied are:
Less price sensitive
More likely to talk favorably about you
More likely to refer you to others
Remain loyal for longer
Cross Selling Getting more business from current customers by selling them additional or complementary services
Trust, Commitment and Satisfaction
Customer Service
Customer Experience