Tuesday, 20 February 2018

CUSTOMER RELATIONSHIP Part 3: Benefits of Relationship Marketing to Customers

The first part of this series has analyzed the concept of Relationship Marketing while the second part titled CUSTOMER RELATIONSHIP Part 2: Benefits of Relationship Marketing to Firms outlined its benefits to organizations that practice it. Here, I present another sequel and third part of a theme we started couple of months back, which highlights what customers stand to gain when organizations engage in relationship marketing.
Customers many times don’t give deliberate attention to brand loyalty; they just want the best, most affordable or most convenient product or service. But most times they subconsciously find themselves stuck on a product, usually as a result of the relationship marketing tactics deployed by the manufacturer. So, in the long run, the customers enjoy the services being rendered to them and also benefit through relationship marketing because they get a better product, a good backup service and the company is always prepared to listen to their grievances. Such major customer benefits may be summarized as follows:
- Superior value through better products and services
- Attention to customer complaints
- Customization of products and services

All such firms that have taken the relationship route have invested substantially in improving the quality of products and create systems to provide the requisite backup service. Because to retain a customer it is necessary to keep him/her satisfied.
When Philips NV, the Netherlands-based electronic giant, developed an online product for children that would soon be launched in Europe, they sent industrial designers, cognitive psychologists and sociologists in mobile vans to communities in Italy, France and the Netherlands to help brainstorm for ideas for new electronic products to meet customers’ changing needs. They hosted a dialogue in which specialists ‘and customers interactively imagined new possibilities. Philips looked at all the ideas, narrowed them down and settled on one online interactive product for children. The researchers then went back to the communities and tested the new product idea on the same children.
Another example relates to how Unilever group gave us an insight into how firms are trying to solve their customers’ product application related problems in India. Kitchens of institutions like hotels, hostels, airports and factory canteens work almost continually without enough time available for cleaning. Kitchen grills usually have extremely greasy deposit formations on them, which are tough to clean.
Traditionally, using chlorine has been the preferred method for cleaning them. Besides the fact that chlorine is a hazardous chemical, the process itself is arduous because the grill needs to be dismantled, cleaned and left out to dry overnight. So there is need for a backup grill while one is being cleaned.
Lever Industrial already had its Taski and Clax range of cleaning products for such applications, but when confronted with the problem of cleaning kitchen grills, Lever Industrial found that these products were not fully effective. The company therefore asked its R&D division to develop a new product for this specific application. Within a few months they came out with Suma grill-cleaning liquid. It is non-hazardous in nature and removes deposits without any need for dismantling the grill.
To win and retain customer loyalties, it is essential to hear the complaints and solve their grievances effectively. Philips Electronics started a 24-hour complaint registration service for customers. Some of their service centres offers free check-up of sets to be repaired. Hero Honda and LML Vespa have also substantially beefed up their service centres to offer personalized attention and satisfactory solution to product-related problems. Service organizations such as Apollo Hospitals, Citibank, ANZ Grindlays Bank, Hyat Regency Hotel, HDFC, Federal Express Service and Singapore Airlines are getting specially attuned to listening to customer problems. At times, they even go out of their way to solve customer problems.
Customization means offering a product or service tailor-made to suit the convenience of each individual customer. In the Air India frequent flier scheme (discussed in part 2), for instance, there is a customized chain at work. The database records the customer’s flight and travel preferences and other likes and dislikes. This is updated each time the customer takes a flight. So the system allots the person a favourite seat, his preferred meal and on arrival at destination a room in the hotel where the newspaper he prefers is delivered to him. All of these go into building closer bonds with the customer.
Levi Strauss, the California-based apparel company began marketing a ‘made to order’ service for customizing women’s jeans in selected US locations. Sales clerks measure customers and feed the data into a computer-aided design information system. The customer tries on sample jeans in the store, to perfect the fit. This additional data is also fed into the system. The system forwards the information to a computerized fabric-cutting machine at the factory and the jeans are made to order. The custom jeans cost only US$10 more than the mass-produced jeans.
In India, Mafatlal sells fabrics as well as branded readymade garments. A research conducted by MARG showed that while most executives buy readymade shirts, only a few preferred to buy readymade trousers because unlike shirts, trousers don’t offer as good a fit as tailored ones. In its quest to get closer to the customer, Mafatlal decided to create a product that offers the purchase convenience of readymade trouser with the fit of a tailored garment. Thus was born the ‘Dial-a-trouser’ service targeted at busy executives. The service was first introduced in Bombay and is now extended to Bangalore and Delhi. The customer may call the company’s showroom to send the tailor to his home or office. The tailor goes there with the shade card and samples of fabrics. The fabric and colour are selected, measurements taken and the trousers are delivered within five days of the order.
One common attribute of the three customer benefits enumerated above is that, they all solve some major consumption related problems, like quality, purchase process, ease of use, product suitability and so on. At the end of the day, all efforts made by firms to retain their customers, as much as it benefits the company’s turnover also end up to the benefit of the customers. So, next time you want to choose a brand, you may want to consider what more is in it for you besides consumption. Adam Smith, a famous economist in his book “Wealth of Nations” in the year 1775 says “Consumption is the sole end and purpose of all production and the interest of the producer ought to be attended to, only so far it may be necessary for promoting that of the consumer”.

Reference: National Institute of Business Management – Marketing Management – Module II

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