Relationship Marketing Part 1

8/3/2019 Relationship Marketing Part 1

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Relationship marketing(RM)

Relation marketingconcept

The influence on Interneton customer relationships

The difference betweenmarketing paradigm andcustomer centric approach


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Learning objectives

Assess the concepts of relationshipmarketing, direct and database marketingon Internet

Learn the influence of Internet oncustomer relationships

Learn the stages and techniques tosupport the dialogue with customers

Methods of acquiring and retainingcustomers in the context of Internetmarketing


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Types of relationships

Relationships with suppliers

Relationships with distributors

Relationships with customers

With non profit organizations

With financing organizations


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Group task

Which relationships from thementioned above are the most

important? Which are the key relationships,

according to the articles?

Give examples for the differenttypes of relationships


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Relationship marketing

A tool, used by the company to learn moreabout its key customers

Company activities, connected with an increaseof the customer database

Technology, using the methods of data mining.

Strategic planning and marketing techniques ofpersonalization.


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Relationship marketingdefinitions All activities, oriented towards establishing, developing

and maintaining successful exchange relationships. (Huntand Morgan, 1990)

RM calls for intimacy, trust and commitment, manifestedbetween supplier, customer and processors. (Gronroos)

Marketing method in which businesses constantly maintaintwo-way communication with their prospective, currentand inactive customers in order to gain deeper

understanding of their needs while delivering personal andcompelling marketing throughout their lifecycle (Vtrenz)


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Relationship marketing as aprocess

GrowCustomer value

Retaincustomers

NurtureProspects


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Group task

Discuss the difference between thepush and pull approach in

marketing. Give examples of two approaches

Which of the two approaches is

more suitable for the Internetmarketing.


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Nurture stage

Identify & Target prospects Build awareness Use offers Collect information Quality for purchase Build trust

Demonstrate expertise Nurture to purchase Create a value proposition


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How to improve relationshipmarketing effectiveness?

Build your database

Segment your list

Design your communication

Build your micro site Include a survey

Schedule & Send your campaign

Follow-up on leads

Nurture prospects Analyze campaign results

Repeat the process


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Grow stage

Customer loyalty means a positiveattitude toward a company

Loyalty is a tendency to choose oneproduct or service over another

Customers are loyal when they

make repeat purchases orrecommend company to others.


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Grow stage philosophy

Maximize the value of the existingcustomer relationships through a set

of relationship marketing principals,tactics and metrics.


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Loyalty ladder Advocate- a customer that provides unpaid promotion for

your organization, product or services

Customer- a business or individual that has on one or

more occasion purchased from your organization

Prospect- A business or individual who has been qualifiedwith intention to purchase from or donate to yourorganization

Suspect- A business or individual who has direct or indirectcontact with your organization, products or servicespurchased from or donated to your organization


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How to move fromcustomers to advocates?

First time buyer

Initial adoption

Repeat buyer

Repeat consumption

Loyal buyer

Supporter

Evangelist


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Steps to grow customervalue

Welcome campaign

Recent purchase study

Newsletter

Customer satisfaction surveys

Cross sell/Up-sell promotions

Relational campaigns


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Principles for growingcustomer value

Reduce buyer remorse Reinforce value proposition Encourage adoption Increase satisfaction Develop stickiness Position as trusted advisor

Understand needs Quality for Repurchase Gain referrals


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Specifics in CRM in e-commerce

Factors, affecting acquiring of customersof e-commerce.

Factors, affecting the retention ofcustomers.

Factors, affecting the process of buying ofcustomers.


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Stages of CRM in e-commerce

The stages of CRM consist of thefollowing three phases:

1) Acquisition of customers

2) Retention of customers

3) Extension of customers.


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Customer lifecycle

Customer acquisition

Customer retention

Customer extension


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Stages on customeracquisition

Set objectives

Segmentation and profiling

Targeting Media planning

Development and communication of

the offer Fulfillment

Response analysis


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Aspects of customer acquisition

Attract new customers to thecompanys web-site

Convert the web traffic into buyers

(Kotha, 1990)


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Reasons for retention ofcustomers

Acquiring new customer is morecostly than keeping a current one

Customers have become moreprofitable over time

You are more likely to win back a

lost customer than attract a new one


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Principles for winningcustomers back

Identify at risk customers early Evaluate customer value Understand motivations for defection Track the competition Improve on the attributes most valued Leave a good note Stay in touch Ask for another chance Provide a peace offering


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Strategies for identifying and reengagingLost customers

Inactive Customer survey

Periodic newsletter

Win-Back promotions

Welcome-back campaigns


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CRM in e-commerce

Targeting is more effectively.(Chaffey,2002)

Customers have become more powerful

as they are more informed. Customer is the leading part in the

relationship with the organization. He canpull information he needs.

Increase depth, breadth and nature ofrelationship. Lower cost. Personalization in the relationship with

customers.


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Factors, influencing CRM ine-commerce

Internet penetration. Income of household. Number of home PC. Level of computer literacy of Internet

users. Type of Internet connection. Trust of customers in e-commerce

(Novak, 2002) Website usability( Nielsen, 2000) Customer confidence and trust in

Internet. Onsite resources


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5Is concept by Peppers

Identification

Individualization

Interaction

Integration

Integrity


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Documents

Relationship Marketing Part 1