Professional Documents
Culture Documents
Building Customer Relationships
Building Customer Relationships
Building Customer Relationships
Relationship Marketing
Relationship Challenges
6-1
Objectives for Chapter 6:
Building Customer Relationships
Explain relationship marketing, its goals, and the benefits of long-term
relationships for firms and customers.
6-2
Relationship Marketing
is a philosophy of doing business, a strategic orientation, that
focuses on keeping current customers and improving
relationships with them
6-3
The Bucket Theory of Marketing
6-4
Customer Goals of Relationship Marketing
6-5
Exhibit 6.1: A Typology of Exchange
Relationships
Customers as Strangers Acquaintances Friends Partners
Buying activity Interest, exploration, Reduced need for Buying without Commitment in the
(what customer does) trial search perfect information form of information
sharing, specific
investments
Focus of selling Encouraging trial Familiarity and Specific segment Specific knowledge,
activities (what firm facilitates initial general knowledge knowledge idiosyncratic
does) selling investments
Relationship time None Short Medium: trust takes Long: detailed
horizon time to build knowledge,
interconnections
Sustainability of Low: must continue Low: must build Medium: must High: depends on
competitive to attract, induce trial unique value into understand various uniqueness &
advantage standard product customer needs effectiveness of
interconnections
Primary relationship Acquire customers Satisfy customer Retain customers Enhance relationship
marketing goal business needs business with customer
6-6
Benefits of Relationship Marketing
Benefits for Customers: Benefits for Firms:
Receipt of greater value Economic benefits:
Confidence benefits: increased revenues
reduced marketing and administrative
trust
costs
confidence in provider regular revenue stream
reduced anxiety Customer behavior benefits:
Social benefits: strong word-of-mouth endorsements
familiarity customer voluntary performance
social support social benefits to other customers
personal relationships mentors to other customers
Special treatment benefits: Human resource management benefits:
special deals easier jobs for employees
social benefits for employees
price breaks
employee retention
6-7
Profit Generated by a Customer over Time
6-8
Customer Loyalty Exercise
6-10
Figure 6.4: The Customer Pyramid
6-11
The Customer Pyramid
6-12
Relationship Development Model
6-13
Strategies for Building Relationships
Core Service Provision:
service foundations built upon delivery of excellent service:
satisfaction, perceived service quality, perceived value
Switching Barriers:
customer inertia
switching costs:
set up costs, search costs, learning costs, contractual costs
Relationship Bonds:
financial bonds
social bonds
customization bonds
structural bonds
6-14
Levels of Relationship Strategies
6-15
The Customer Is NOT Always Right
wrong segment
difficult customers
6-16
Ending Business Relationships
6-17