ISRAR AHMADInternational Islamic University Islamabad

AGENDAWhat is Relationship Marketing?

Ultimate objective of Relationship Marketing?

Conventional Vs Relationship Marketing?

$$Benefits of Relationship Marketing?

Benefits for Small and Local business Entrepreneurs?

Five Best Practices in the Real World

Deliverables of the Relationship Marketing

What is “Relationship Marketing?”

It isn’t “talking to customers,” and it’s more than “listening to customers.”

It is actively listening to and being involved with customers and suppliers as a normal part of your business.

It is “an organization’s effort to develop a long term effective link with all stakeholders for mutual benefit.”

“Relationship marketing refers to all marketing

activities directed toward establishing, developing,

and maintaining successful relational exchanges."

Morgan & Hunt 1994

What is “Relationship Marketing?”

Ultimate objective of Relationship Marketing

Emphasis on new

customer (Customer

Caching)

Emphasis is on developing and

enhancing Relationships (Keeping Customer)

Partner

Advocate

Supporter

Clint

Customer

Prospect

The Firm’s Potential Marketing Relationships

Buyer Partnerships

InternalPartnerships

Supplier Partnerships

Lateral Partnerships

FocalFirm

Employees

BusinessUnits

GoodsSuppliers

ServicesSuppliers

Competitors

NonprofitOrganizations

Government

UltimateCustomers

IntermediateCustomers

FunctionalDepartments

Relationship Marketing Strategy Compared to Transaction (Traditional) Marketing StrategyFactor Transaction Marketing Relationship

Time orientation Short-term Long-term

Organizational goal Make sale Retain customers

Customer service priority Relatively low Very high

Customer contact Low to moderate Frequent

Customer commitment Low High

Seller-customer interaction Conflict manipulation Cooperation; trust

Source of quality Mainly from production Company wide

Long-term customers tend to be less inclined to switch, and also tend to be less

price sensitive.

Long-term customers may initiate free word of mouth promotions and referrals.

Long-term customers are more likely to purchase related products from you.

Regular customers tend to be less expensive to service and tend to be consistent

in their purchase habits.

Increased customer loyalty makes employees' jobs easier and more satisfying.

$$ Benefits of Relationship Marketing

The Good News for Small & Local Businesses

Easier than ever for local and regional businesses to

develop mutually beneficial relationships with customers

Relationship Marketing can distinguish your business

from chain/national businesses

BUT HOW DO YOU DO IT?

5 Best Practices in the REAL WORLD Research: Identify your UNIQUE VALUE PROPOSITION. How do you solve problems for

your customers? Find out what your competitors are doing.

Develop a Marketing Strategy: How to build on your company or organization’s strengths

while taking advantage of competitors' weaknesses

Create a Marketing Plan: Prepare a document that shows how you will reach your strategic

goals with marketing tools (advertising, PR, print, web, etc.).

Don’t forget common sense: Be flexible. Business owners and managers deal with

environmental factors, limited resources, uncertainty and tight time tables. The most successful

marketer is often the one who trains his or her 'gut-reaction' to simulate that of the average

customer!

Measure your results! “How did you hear about us?” KEEP TRACK!

Integrated Financial Solutions, LLC - The Ultimate Relationship Marketers

Relationship Marketing Techniques: Investment in defining and branding what makes them unique (“Wealth Engineering”)

Investment in high-end communications materials, refining message, making product easy to understand and easy to

buy

Team based sales and service approach Birthday cards

Hand written thank-you notes Hand-delivered Christmas presents

Annual customer appreciation party Pre-meeting agendas, follow-up notes for clients

Asking for referrals at every opportunity

Serve on boards, committees where likely to meet target customers.

Result: WORD OF MOUTH brings in business

Commitment & Trust vs. Satisfaction

Satisfaction is very unstable

Satisfaction is a poor predictor of outcomes

Commitment & Trust are very stable

Commitment & Trust are good predictors of

outcomes

Outcomes of Commitment & Trust

Retention

Positive Word of Mouth

Cooperation

Ease of Complaining

Willingness to Complain

Uncertainty

Functional Conflict

Share of Wallet

New Product Adoption