CHANGING PARADIGMS IN RELATIONSHIP MARKETING
Anwesha Bose & Rajnish Kumar

INTRODUCTION

We are witnessing a marketing revolution. The forces that are causing and shaping this are Globalization, Technological Development and Deregulation. Distances are dead and the advent of Internet finally administered coup de grace to technology based competitive advantages. These numerous changes are generating a host of new challenges and opportunities. Moreover, these opportunities need to be looked upon from fresh perspectives.

Does that mean that the old and established principles of marketing are dead? No. Needs are still to be satisfied, Competition tackled and the biggest of all Customer is still the King. More so, he has become wiser, is better informed and more demanding. The changing landscape makes this the perfect time to build profitable learning relationship with the customer. Relationship marketing is very well there albeit in a new avatar.

RELATIONSHIP MARKETING

It is generally agreed that the single most important reason of customer loss is indifference of the marketer towards the customer. Segmentation, targeting and positioning are all potent tools but one single fact that we need to keep in our mind is that a customer is not a demographic segment; he is a human being and has to be treated as one. Relationship Marketing is the answer. It is a marketing tool—and much more. It is a business strategy; an attitude that permeates successful businesses at all levels.

Relationship Marketing of yesteryears

Traditionally Relationship Marketing has involved knowing the customer very well and focusing on their requirements over time. It involves approaching the customer off and on, offering suggestions and addressing grievances. It is more about customer management than product or brand management. The crux is that if you do not take care of your customer, someone else surely will.

The company has to be proactive rather than reactive. The company and client forge a partnership. The firm offers incentives like Frequency Marketing Programs (FMS), buyer’s club etc. Assurance of quality post sales service also keeps customer loyal. The firm has to expect the customer’s expectations and delight the customer by exceeding them. For example, service oriented industries like Hotels maintain elaborate databases of their regular customer’s choices and preferences and ensure that the guests have everything up to their liking during next visit. Some hotels maintain information to the extent of birthdays and anniversaries and arrange surprise cakes and celebration for their guests in case they happen to stay in the hotel on such days.

Relationship Marketing in today’s world

In today’s highly competitive business world, the most powerful tool in the hands of successful entrepreneurs is information. Phenomenal changes have taken place in the world ever since the World Wide Web made its appearance. Hyperlinks have subverted hierarchies and communication within and between organizations as well as all along the supply chain has undergone a drastic metamorphosis. New forms of social and business norms are emerging. Customers have become more knowledgeable, smarter, demanding, conscious and tough bargainers.

Naturally, a new paradigm in the world of relationship marketing has also arrived depending heavily on the effective usage of information to establish a relationship with the partner inducing him to enter a dialogue and thus intensifying the business relationship. Media today is used to ensure that customers receive only that information which accurately reflects his or her needs profile.

How are companies of today going to capitalize on emerging communication channels?

We must remember that a customer is not interested in what the company has to say. He is interested in what he needs.

• A simple company presentation site provides one-sided information retrieval, only limited to prospective customers.

• A customer more interested in a particular product or service will go for more detailed information like electronic brochure or catalog or a product database for a quick overview. For e.g. a customer using a courier service may like to know the status of his consignment through a status data database.

• Customized information is made available to customers today through site customization where the homepage of the company is adapted to the visiting customer’s need.

• Special forms of email, newsletters meet individual customers demand, so does email help desks where specific technical problems are addressed, which offer shorter response time.

• As relationship marketing evolved over time, along with customer-company relationship customer-customer relationship has gained equal importance. Interactive computer forum like online chat rooms and online clubs support discussion between customers and meet customers’ communication-related expectations.

Challenges that Relationship Marketing faces today

Relationship marketing with all its popularity stands at the face of some challenges today.

Constant and repeated interaction with customers is necessary to obtain a detailed and updated set of information. The company should know the precise need of its target groups and design its communication program to ensure repeat visits. In addition, to encourage customers to participant in interactive discussion forums high incentives ought to be provided.

Customers expect a fast response to their electronic enquiries, so companies need to take care to see that they organize their resources appropriately.

Product involvement and product interest needs to be high, at the same time it should be taken care to see that customers don’t indulge in destructive and derogatory discussion forums which may affect the company adversely.

A major issue of concern today is the three fold dynamic of Internet customer communication.

The first dynamic is the escalation process where a customer is dissatisfied or angered if the company does not react to his private complaint on time. This indicates that the company is not willing to listen to the customer and so he tries to gather support by making his complaint heard globally to other readers so that the company cannot overlook anymore.

The second dynamic comes with the escalation of the number of participating customers leading to a broad dissonance over the issues.

The third dynamic, which is the most crucial one, comes in when the topic of complaint changes with the discussion process. A complaint may trigger negative feedback from other customers and occasionally may include dissatisfied employees as well. There are cases where the employee may support the customers’ point of view by revealing internal procedures, or he may also be defensive about the company. An example in this context may be the internet site ‘www.untied.com’, a site providing extensive information about the poor passenger service provided by UAL. Even former frustrated employees of UAL vent their feelings openly through the site.

To summarize we may say that with all its virtues and vices, relationship marketing holds promising possibilities for companies across the globe to improve their customer service. With a little care and concern to deliver timely information and satisfying customer requirements so that individual criticism does not become the word of mouth globally, companies can actually have a leading edge over each other. A word of caution to tomorrow’s managers is that they should carefully monitor the communications, analyze them and react appropriately so that a win–win situation with the customers is created.


Authors:
Anwesha Bose (PGP 1) & Rajnish Kumar (PGP 1)
Xavier Institute of Management, Bhubaneswar

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