Preventing the Premature Death of Relationship Marketing

By Barun Jha, PGDM 2020-22

Introduction:

Relationship marketing is one aspect of CRM that focuses on building long term relationship with the customers that may yield to free word of mouth promotions, lowering the cost and increasing the revenue of a company. The ultimate aim is to bring back the customer in future, once he has made the first purchase.

Companies are using all sort of solutions these days to make the relationship with customer, long lasting. Unfortunately, the companies are not able to build so. Rather, they fall in trouble of dis-satisfaction. Customers do not delight in the way the companies try to convince them, by confusing them with more products, introducing many new features of electronic gadgets, lots of invitation to participate in frequently reward program and so on. The ultimate aim of Relationship marketing is to build the epitome of Customer satisfaction.

The more the companies try to offer reward program for the customers, the more they make their relationship with customer worse. Company needs to think and figure out how and why are they undermining their best efforts, as well as how things can be brought back on the track.

Seeing through the eyes of customer:

1. Companies policy of making one on one relationship with customer seem to be useless because very less consumers agrees for the same. If companies take too many steps to build one on one relationship, the consumer stops taking heed of you. Simply paying discounts/money to consumer can also never give long term relationship.
2. There should be a balance between ‘give and get’ for a healthy relationship. The data taken by company from any consumer must not be repeated to build trust. And the information taken out from consumer must be respected.  If any customer has availed any particular service in the past, then that doesn’t necessarily mean that the customer would want the same, even if they liked it earlier. It depends on the present condition of the customer. Not understanding this would result in weakening the relationship.
3. Companies should not only rely on designing relationship/loyalty programs for those who generates more revenue. In such case, other consumers would feel left out and this may back fire the company.
4. Sometimes the company adopts any strategy and think that it will solve the problem of consumer but many a time it creates more problem. For example, too many solutions for any one problem many lead to confusion for customers. Also, a sense of freedom of choice should be provided to customer to bind commitment and trust.
5. It is wiser to understand that sometimes technology designed to reduce the work, ends up increasing the work load. So, it is essential to understand the needs of consumer. Consumer develop ‘purchase & consumer’ rules. Instead of accepting the advances (which you as a company think that you are helping your customer, you end up providing them to arm themselves to fight back.

Regaining Trust:

  In 1985, psychologists Michael Argyle and Monica Hinderson defined universal rules of friendship:

1. Provide emotional support
2. Respect privacy
3. Preserve confidences
4. Tolerant of other friendship

In light of relationship marketing, companies hardly provide commitments to any of the above-mentioned rules.

How to then regain the trust of customers?

1. To start with, we can think of new products extension. Research states that most of the product extensions are not proper because the managers were not able to explain and understand what will resonate with customers and what not? We must eliminate or reduce the features while introducing new products that frustrates or overwhelms consumers. For example, P & G has standardized its new products formulae and packaging, reduced number of promotions and coupons, pruned marginal brands and cut back on dizzying array of new product bunches. While executing, company must think that are these initiatives undertaken with genuine concerns for consumer’s emotional well-being?
2. The next step is to respect the private information of customers. To build long term relationship, make sure that customer should not suspect you even once. Company must not ask sensitive information from customer, repeatedly, unless it is put for use.
3. Finally, the relationship goals should be practical and based on foundation of genuine-ness. Company must avoid fluff, fake promises and bad languages etc. The main aim should be honest commercial intent of doing business by convincing them that it is a good deal.

Attaining Intimacy:

The above three points, even if honestly followed, the company still faces trouble in making long term relationship. True intimacy is the key to rewarding relationship. To attain that, one must understand the consumer behavior. That is how does the consumer uses your product on day to day lives.

1. The company can’t rely only on the rating of customer on satisfaction scale. There are two major dimensions company must attend if they want true intimacy:

Product satisfaction and life satisfaction

• Only data collection is not enough to understand the discontent of consumer but to get into the heads of consumer, marketer needs to turn on the tools of ethnography and phenomenology. Video tapes and photography are also reporting tools.
• Some of the underutilized data can be used to find the clear picture of customer responses. For example, customer service hotlines may give actual picture of consumer response but unfortunately, they are not being used properly.
• There are also external sources of the company that is readily available to provide information. For example, Ad agencies can be a good source of trend analysis.
• To understand the consumers effectively, the company personnel are required to go on the field. Not only the researchers but also the senior managers, middle level managers or else engineers etc.
• Only data can’t provide us required information about customer’s psyche. To be truly effective, one must understand philosophy, communications, psychology and religious studies. Understanding emotional part of consumers is very critical to overall analysis.

Conclusion:

1. Marketers are the boundary line between the customers and the company. Marketers must understand the needs of consumer and act accordingly. That is, they provide the company, customer’s point of view. But these days, both the roles are not being played effectively that puts Relationship marketing in danger.
2. To build relationship, company often takes many muddled steps that makes relationship even worse. So, the company must understand true meaning of relationship and delivers, on the principles on which it was founded.