This is perhaps the most instructive of the series and hopefully
the last one. Having treated the
concepts of relationship marketing as a practice, its benefits
to firms and its benefits
to customers, it is important to discuss how it can be practiced in order
to relish its many benefits. This will particularly be very useful to entrepreneurs
and small scale businesses.
Almost all companies can make a start with relationship marketing
by identifying the ‘key customers’. But the one thing that must be remembered
is that most customers want a single interface with the company; they don’t
like to deal with several departments to put together all that they want from
the company. So the relationship manager or the account manager, whatever the
designation, should have access to enough resources and backup to resolve any
problem the client needs tackled. The account manager also needs to be tuned
into the client’s organization.
A number of companies are today trying to create structures that
allow proper relationship building with their valued clients. The account
manager or the relationship manager is one of the keys to relationship
marketing. He acts as much as an internal consultant to the customer as the
representative of the company he is employed with. The account manager is the
main contact point for the customer with the supplying organization and he
makes sure that the customer’s needs are taken care of in the most efficient
manner possible.
Relationship marketing may be regarded a process which requires basic
steps to carrying it out and it would benefit account managers or relationship
managers if they consider using the following recommended steps:
- Creating
a database
- Gathering
more information about enlisted persons
- Identifying
key customers
- Creating
customer profile
- Getting
closer to the customer
- Maintaining
relations
CREATING
A DATABASE
In relationship marketing, firms are required to gather intimate
information about the customer and then use that knowledge to sharpen the
marketing focus. The database, therefore, is at the heart of this new marketing
methodology. Many firms acquire the data from database companies like
Datamatics or card issuers like American Express, for a fee per name depending on
the list quality.
For example, a popular magazine called Reader’s Digest uses its primary source to generate
the database. It asks its subscribers to suggest names of 14 people who they
think will want to subscribe to the magazine. In return the subscriber gets a
small gift, usually a book. On an average, the magazine gets a million names
every year to make a pitch for fresh subscription.
Most companies use a combination of commercially available and
self-generated database because generally, no single database can cover the
full range of customer profile. Established firms can also use their own sales
records, bills, invoices and warranty cards to prepare a list of the existing
customers.
GATHERING
MORE INFORMATION
Firms may try to gather more information about the individuals
listed in their computer records through direct mail or cross-references.
Refining and updating the database may be necessary if it doesn’t have the
requisite segmentation parameter built into it. When the Indian Tobacco Company
(ITC) collected the database for its brand Classic cigarettes, the much-needed
information on whether the person was a smoker and whether he preferred Classic
was not available.
So the firm had to actually conduct a search through telephoning
the prospect’s office or club. Once it was established that the person smoked
they sent hostesses to his office and offered him a handsome leather case with
a box of classics as a gift. In the course of the conversation the hostess
would find out the complete smoking pattern of the person. ITC finally ended up
with a database of 15,000 executives in Delhi and Bombay.
IDENTIFYING
KEY CUSTOMERS
Relationship marketing takes off only after identification of the
key customers by the firm. The revenue pattern of most firms follows the 80/20
rule, i.e., 20 percent customers brings in 80 percent revenue. Modi Xerox, a
leading practitioner of relationship marketing, gets more than 30 percent of
its business from just 900 corporate clients. In case of HCL-HP, 750 clients
cover about 80 percent of its business. The firm may segment these key
customers into certain distinct groups to identify distinct purchase patterns.
DHL, for example, segments its key customers into three groups: Banks, MNCs and
large corporations, and Exporters. Obviously these customers have different
needs and they are to be treated differently.
CREATING
CUSTOMER PROFILE
The more you know about the customer, the easier it is for you to
build a relationship with him. In case of institutional clients, personal
particulars of the decision maker, such as birthday, marital status,
anniversaries, children and special interests are very important for the firm.
Customers actually appreciate knowing that you are concerned about who they are
and are also aware of their needs and interests. Like any other professionals
they admire any effort that results in more benefits to them.
Getting a detailed profile of the customer is essential for
service organizations such as banks, travel agencies, hotels, airlines and
courier firms, because personal factors count the most in a service business.
Specific needs can be fulfilled and likes and dislikes taken care of only if
the company has a complete profile of the client.
GETTING
CLOSER TO THE CUSTOMER
Department store magnate J C. Penney once said, ‘All great
business is built on friendship ‘(Fraber and Wycoff 1993). The process of
getting to know your customer and letting him get to know you may mark the
beginning of a relationship that may turn into a sort of friendship in due
course of time. You can’t get closer to your customer if you don’t know what he
or she is all about, what problems he/she is facing and how can you help
him/her. Getting into some account research and gathering useful information
about the needs, purchase pattern and problems of the customer, often proves
fruitful to firms.
Many firms have now evolved formalized methods of listening to the
customer. They invite two
or three people who
can give the kind of information the firm is looking for. Such meetings usually
take place in a relaxed and informal environment. If a customer meeting is
viewed by the firm as an opportunity to learn what it takes to improve
performance, strong bonds of relationship and understanding may be created with
the customer
The in-house customer meetings provide a powerful forum for
finding out how your customer feels about your company, its products, services
and support.
MAINTAINING
RELATIONS
Maintaining relationships is more difficult than cultivating
relations. Sending a ‘Thank you’ card after a meeting or a sale provides a
little extra as a token of appreciation for the customer’s business. Wayne
Block, President of Block Business Systems, sold a new piece of business
equipment to a firm. He immediately delivered to the chief executive a cake
with the company’s logo on it.
Subsequently this token gift became so famous that if the company
people were late for some reason, customers would call back and ask for the
cake.
Even in India, if you ever buy a pair of spectacles from Lawrence
and Mayo, be it a simple reading glass or one of the Ray-Ban types, be assured
that you will receive a birthday card for the rest of your life. A thought that
keeps the brand alive in your mind and carefully, albeit in an understated
manner, builds the relationship value intrinsically.
You may read up the previous posts in this series in order to
learn more on the
concepts of relationship marketing.
Reference:
National Institute of Business Management – Marketing Management – Module II
@TywoAkintoye
