Relationship Marketing

Case: Liverpool Football Club

 Relationship Marketing (RM)

 Relationship Marketing is an ongoing process of continued interactions with the customer

through multiple touch points and channels, so as to build a bond between customers and the
organisation.
 The primary goal of RM is to build and maintain a base of committed customers who are
profitable for the organization.
 Organizations focus shifted from Return on Investments (ROI) to Return on Relationship
(ROR).
 Definitions of RM
 Relationship Marketing (RM) draws attention to the importance of retaining as well as
attracting customers, with emphasis being placed on the development of long term relationships
with customers.

 • The primary goal of RM is to build and maintain a base of committed customers who are
profitable for the organization
 RM: Interaction perspective
 the ongoing process of engaging in cooperative and collaborative activities and programs with
immediate and end user customers to create or enhance mutual economic value, at reduced cost’
(Parvatiyar and Sheth 1999: 8);
 ‘marketing based on interaction within networks of relationships’ (Gummesson 2002: 587);
 ‘the process of identifying and establishing, maintaining, enhancing, and when necessary
terminating relationships with customers and other stakeholders, at a profit, so that the
objectives of all parties involved are met, when this is done by mutual giving and fulfilment of
promises’ (Grönroos 2004: 101).
 Case: Liverpool Football Club
 From the perspective of LFC, an RM approach is being adopted to retain fans, not just through
providing them with a team to support on match days, but also through other devices that
enhance their commitment to the club; ring-tones and credit cards, for example.
 Even the attraction of new fans, through the replica kits for toddlers, is achieved via the existing
committed fans, the parents.
Case study: Political Marketing
 Technology and RM
 With a revolution in the IT and telecom industry in India, the accessibility of customers to
products and of marketers to customers has significantly increased.

 Penetration of mobiles throughout India and availability of the Internet has brought a paradigm
shift in marketing techniques.

 Geographical boundaries have broken down and connect with the customers is just a click
away.

 Social media has become the centre for RM to connect with people.
 Assignment: 1
 1. Log in to Narendra Modi’s website/ twitter/Facebook/etc. and critically examine the
features.
 2. What are the features that encourage website visitors to engage with Modi?
 3. Do you think the website and its related links helps create trust with, and commitment to
Modi? Provide evidence for your views.
Transaction marketing Vs Relationship marketing
Transaction Marketing Relationship marketing

One of exchange, Focus Ongoing exchange

Brand Customer
Short term Time perspective Long term

Mass Primary communication Personal

Periodic Feedback mechanism Ongoing

Mass market Market size Market of one

Market share Criteria for success Share of customer

Profitability Critical metrics CLV

Brand equity Customer equity
Themes related to RM
1. Customer Care
 2. Knowing Your Customer
 The foundation of any good customer care system is a good knowledge of the customers.
 Identifying their needs, wants and expectations and responding accordingly is crucial for
customer care.
 This knowledge on customers is gathered by the organisations during each interaction.
 Such information generally comes through contact centres, sales persons and service
technicians.
 Besides these, organisations often have special market research projects to know their existing
and prospective customers.
 The knowledge of customers involves information in the following areas:

 ■ What do consumers buy?

 ■ Why do they buy?
 ■ When do they buy?
 ■ Where do they buy?
 ■ How often do they buy?
 ■ How often do they use the product?
 ■ What are the service requirements?
 ■ How does a customer interact with the organisation?
 ■ What are the modify cations in the product/services required by the customer?
 Better knowledge of customers helps an organisation devise strategies in the following areas:

 ■ Customer care mechanism

 ■ Marketing communication plans
 ■ Market segmentation
 ■ Targeting of consumers
 ■ Positioning of products
 ■ New product development/product innovations
 ■ New market penetration
Mini case: Swedish airline, SAS
 3. Customer Touch Points and Moments of Truth
 Every customer has a particular experience whenever he/she comes in contact with an
organisation, its employees, its products/services or any other channel of interaction.
 All these interactions represent touch points.
 This experiences of ‘touching’ the brand and getting associated with the organisation creates an
impact in the mind of customer.
 These touch points generate ‘moments of truth’, wherein the customer perceives the
experience of interaction with organisation as either good or bad, constructive or destructive,
positive or negative.
 It is the quality of these moments of truth that decides customers’ long-term association and
involvement with the brand/service.
 For example,
 a single negative experience with a crew member while using a flight of a particular airline
service provider can hamper the chances of availing the services of same airline in future by the
customer.
 The same can happen in a restaurant, where interaction with the waiter can be crucial for repeat
visits of the customer.
 The first touch point occurs when a customer becomes aware of the brand or the point.
 Multiple experiences at individual touch points create an overall impression in the mind of
customers.
 Over a period of time, these interactions strongly bind the customer emotionally and
psychologically with the brand/service/organisation.
 For this to happen, there should be consistency of positive experiences.
Mini case: Touch Points of Maruti Suzuki India
 Assignment 2
 Prepare a detailed project on the banking sector of India, highlighting all possible touch points
used by banks today. Also prepare a comparative analysis of the touch points used in
nationalised banks and private banks in India.