Pre-Industrial Age - Personalised 1:1 relationship between producer and consumer Industrial Age - Mass production/creation desegregation between producer and consumer Service Economy Age - Production combined with intangibles to deliver solution to consumers Knowledge Economy Age - Information combined with products and services to deliver personalised customized solutions Relationship needs arise out of four goals that exist when an organization/consumer are engaged with each other on a win-win basis: Need fulfillment goal Economic goal Security goal Esteem goal Key Principles of Relationship Management Manage customers as an asset Rate customers on basis of their profit stream
– current and future potential
Customize relationship to individual
customer – using information based decision
making capabilities Implement innovative ways and means to get
close to the customer to hear the ‘Voice of
the Customer’ To succeed in the relationship economy companies must:
Create the capabilities to service the new customer
Driven by voice of the customer
Listening and learning process
Customer experience mapping
Appropriate level of segmentation
Connect the Business to the Customer
Align mindset and connectivity Invest in enough knowledge to get the job done Balance elements of model business(strategy, people, process, knowledge and technology) Develop efficient and effective fulfillment solutions (self Service v/s full service) Techniques and Applications to Manage Relationships Acquisition Stage: From the time a company decides to target a prospective customer to the time a customer makes the final purchase - relationship management needs to focus on ensuring that customer expectations of product features, quality and cost are: Well understood by consumers – through ‘correct’ advertising, sales promotion material, trade communication, product literature, etc. Providing consumers avenues to easily raise any relationship disconnects and issues during the acquisition process. ‘Product’/ ‘Service’ return guarantee in case consumer does not want to continue relationship post acquisition for whatsoever reasons. Post Acquisition Stage a) Single product/service user: Education, Complaint/Request and Query management support , Relationship recognition b) Multiple product/service relationship:
Recognition of ‘Total Share of Wallet’ instead of
discrete spends made by the consumer, Catering to individualized/personalized needs c) More favourable terms for additional business Acquisition Cost v/s Relationship Cost
Relationship management entails expenditure
on maintaining the various relationship programmes/processes. While acquisition costing/profitability are well understood, it is found that companies struggle to appropriate a correct costing structure to support relationship management aspects. This cost can be spread over the following: Post purchase transaction handling:Cost incurred on the contact center, collection, showroom, front desk, web support, etc. Loyalty programmes:This can be of following kinds – Continuity Marketing Programmes which are designed for: --Retaining Customers --Increasing Loyalty Partnering programmes:Co-Branding, Affinity Partnering
Personalised services:One to One Marketing
Customer Experience Management – Psychological and Behavioural Principles Sequence Effects Duration Effects Rationalisation Effects Five Operating Principles from the above behavioural findings: Principle1 - Finish Strong Principle 2 - Get the Bad Experiences Out of
the Way Early
Principle 3 - Segment the Pleasure - Combine
the pain Principle 4 - Build Commitment through
Choice Principle 5 - Give People and Stick to Them