E s h i t a H a j e l a | I n n o v a t i v e m a r k e t i n g T e r m 4 | 2 0 1 4 0 1 2 1 1 1 0

The major focus of relationship marketing is on the future i.e. building long term relations rather than trying to encourage just a one-time sale. It also tries to promote customer loyalty by providing admirable products and services. Relationship marketing, by contrast, is usually not linked to a single product or offer. It involves a company refining the way they do business in order to maximize the value of that relationship for the customer.

Relationship marketing involves forming long-term relationships with all stakeholders, primarily customers.

The basic philosophies of relationship marketing are based on the assumption that company-customer interactions and strategies can earn and keep the loyalty of customers. (Berry, 1995).

Doyle (2002) says, the three cornerstones of relationship marketing are: planning and controlling of customer satisfaction, customer loyalty and customer value management.

The basic necessity towards building any relationship invariably is trust. In market and business, trust implies confidence that a customer or any stakeholder has in the business to deliver the set goods and services.

Customer satisfaction is important in contributing towards customer loyalty because satisfied customers are less likely to switch to a competitor. Customer loyalty and the ability to retain customers are, therefore, highly dependent on the customer's actual satisfaction; undoubtedly, customer service is a key ingredient in relationship marketing and consequently, in customer retention

According to Doyle (2002), a highly satisfied customer will exhibit the following characteristics: (1) stays in loyal longer, (2) buys more (3) talks favourably about the company, (4) pays less attention to competing brands and advertising (5) the company will cost less to serve than new customers.

The concept of Relationship marketing is one of the most fundamental and important changes in the recent years with regard to how marketers look at marketing and practice their marketing activities.

Relationship marketing looks to establish a long-term relationship with the customer based on understanding of mutual needs. In this way, it is suggested that the marketer will find it easier to attract and retain customers through building customer royalty. This can be explained using the ladder of loyalty.

The relationship marketers coined the concept of ladder of customer loyalty. According to the same, customers are grouped according to their level of loyalty

The loyalty ladder is a tool for marketing communicators. The idea is that consumers can be moved along a continuum of loyalty using a number of integrated marketing communications techniques. The loyalty ladder is also called branding ladder.

PROSPECT Although a prospect may not have bought from the brand, he or she may have heard or read about us and thus, may have formed an opinion about the brand or the supplier. Indeed at this stage they might still decide not to purchase at all. At this level on the ladder, this group had no loyalty to any brand or supplier and will buy from the one that offers what they feel is the best deal on offer. The key task for the marketer at this stage is acquiring customers and convincing the prospects then that they are being offered to do the best value and may need to offer their inducements to buy.

Lowest rung of the ladder, it denotes those customers who have set forth to buy at this stage but have not finalised on a definite brand or supplier. They have a need to buy our product/ service & also have the want to possess or make use of the same.

It is essential therefore that the marketer try to ensure this is the case by ensuring that the customer is satisfied both during and after the exchange. At this level of the ladder, customer back and after-sales service become important.

CUSTOMER

This second rung on the ladder comprises of those prospects who have been persuaded to buy. Even at this rung on the ladder, the emphasis in the marketers task switches from acquiring customers to keeping them. A customer, as opposed to a prospect, is someone who, because they might have bought before, even at this stage have begun to develop an element of loyalty to the brand or supplier. Needless to say, they will only start to do this if they are satisfied with the experience of the transaction and the product or service purchased.

CLIENT

A subtle but nevertheless important difference when moving to this level of the ladder is that the relationship between the marketer and the customer begins to become one of mutual respect and understanding.

The buyer begins to think of themselves as being much more than simply another sale and will expect to be given priority and a high level of service. In turn, the marketer begins to treat the buyer more as an equal and certainly valued partner in the exchange process. The people and process elements of the marketing mix begin to become more important at this stage and the customers loyalty and support to the supplier or brand deepens.

SUPPORTER

A supporter is a customer who is not just happy with a supplier or brand but who is delighted , so much so that they are unlikely to switch brands unless they have a bad experience and even then they may be reluctant to switch. At this stage, the buyer is then extremely loyal to the supplier or brand and will continue to repeat purchase.

Having customers with this degree of loyalty is a real marketing asset and something which a marketer must strive for.

ADVOCATE

An advocate is so delighted with their experience of a supplier or brand that they actively recommend the supplier or brand to friends and relatives.

Word of mouth recommendations are known to be one of the most powerful influences on supplier and brand choice. The emphasis is on retaining the customers and keeping them satisfied at all times by offering highest levels of customer care and service. And so, an advocate talks about you, does your marketing for you and brings customers to you.

PARTNER

Once achieving the top rung, you are often described as a trusted advisor, a true partner. You are considered an extension of your customers own business. They promote your business on your behalf. They are so happy about your product/service that they tell others. They want to see your business go from strength to strength.

An advocate becomes a partner when he is earnestly involved in the judgements of the company and the brand. A relationship that is aimed at developing customer value via various partnering activities has a greater probability of creating greater bonding between marketers and customers .

Everyone in the organization focuses on the customer and how they can help create advocates.

The emphasis shifts from customer catching to customer retention.

Top management run customer-oriented environment is created and sustained.

Provisions to understand customers be made because effective relationship marketing needs updated marketing information at all times.

Customer care, quality and service are needed to create and retain supporters and advocates.

A few years ago, most consumer goods marketers spent a large proportion of their advertising and promotional budgets on trying to lure customers from competitors. Using a variety of deals and offers, marketers were obsessed with attracting customers from other suppliers and brands. In doing so, they encouraged the growth of the customer who had no loyalty to a particular brand or supplier and simply switched whenever there was a better deal on an offer. These so-called brand promiscuous customers became a feature of the marketing landscape. However, with the recognition of the power and commercial sense of relationship marketing many companies are now refocusing their promotional and marketing efforts to concentrate on customer retention rather than customer catching. Most marketers today have turned their attention to how to build customer loyalty and move their customers up the ladder of loyalty.

Investment on

Relationship Marketing

Feeling of gratitude

Gratitude based

reciprocal behaviors

Customer trust

Customer commitment

Customer purchase intention

Sales and revenue growth

Customer size and

competitor force

Customer gratitude

Seller performance outcomes

Controls

The prominence and importance of having a loyal customer has been clearly acknowledged and understood. A good, well-maintained relationship will go a long way in keeping the customer attached to the brand. Correct identification of the customer in view of the ladder of customer loyalty and investing accordingly helps in gaining customer trust and commitment that further help in accelerating sales and revenue and make the customers fall in love with the brand for ever.

Having done all of this, the ladder of customer loyalty can be made of good use in times to come and thus, the resources can be used further optimally.

The only possible barriers are customer size and competitor force that need to be taken care of by targeting the customers cluster wise (on the basis of the loyalty ladder prospect, customer, client, supporter, advocate, partner) and catering to their needs and expectations individually.

Customer service improvement

Sales can be worked upon accordingly

Regulatory compliance

Profitability tracking

Client management

The ladder of customer loyalty is a pivotal part of the entire concept of customer relationship management which in turn is one of the prime and the most efficient approaches in maintaining long term relationships of a brand with its customers. Once an initial emotional connect is built, it is extremely simple for a brand to recognize the actual needs, demands and expectations of the customer and that further help the organization to serve them in a much better way. Improving and expanding on this bonding accelerates the business of a brand to greater heights of success.

conceptdraw.com learnmarketing.net thepathtodigitaltransformation.com/customer-satisfaction-metrics wikipedia.org sitepoint.com The Perfect Customer Experience - Article by Shaun Smith (nextup.wordpress.com) Mohamad Rizan, Ari Warokka and Dewi Listyawati (2014), Journal of Marketing Research and Case Studies, Customer service by Patty Rai Smith, University of Kentucky and Barbara Cunningham. CIM course book Marketing Fundamentals by Frank Withey and Geoff Lancaster

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