Relationship Marketing

VS Traditional
Marketing

Written by:
Farhan Saqib

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Relationship Marketing VS Traditional Marketing

Change does not roll in on the wheel of inevitability, it requires a continuous struggle.
There has been growing interest in the future of marketing and changes in marketing's organization and
role within the firm. However, there has not been research that holistically explores key changes in
marketing organization. There is growing evidence in the business press that the way firms are organizing
their marketing activities is subject to major changes. As an example, many companies have changed
their organizational structures to become more responsive to customer needs. In this vein, there have
been some voices questioning the adequacy of classical organizational forms in marketing, especially
product or brand management. There have recently been a number of articles that consider innovative
ways of organizing marketing activities.
Achrol (1991), focusing on the effect of increasing environmental turbulence on marketing organization,
argues that a higher level of organizational flexibility is needed and suggests two ideal forms that he
refers to as the marketing exchange company and the marketing coalition company. Webster (1992)
discusses changes in marketing's role within the firm and argues that "managing strategic partnerships and
positioning the firm between vendors and customers in the value chain" will become the focus of
marketing. Day (1997) claims that "firms will increasingly evolve toward a hybrid or hypertext form of
organization---combining the best features of horizontal process and vertical functional forms--in order to
get closer to their customers".

Every thing around us is being marketed since the beginning & everyone around us is playing the role of
marketer. Before 1970 there was a trend that firms used to sell what so ever they used to produce. There
whole focus is on increasing sales, without thinking of what a customer wants. Moreover they do not feel
the need of providing after sales services. But then a revolution took place & during the era of 70’s to
80’s a new concept came into being, known as relationship marketing. Customers became the God for the
organizations. Then the firms just start developing long-lasting relations with their customers. The
organizations who adopted this new trend realized that their profits are increasing at a tremendous pace.
Developing long-lasting relations does not only helped in spreading the good word of mouth, but also
helped in retaining & in the acquisition of new customers. The loyal customers served as an in-direct
marketers for the organization.

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Relationship marketing is not about having a "buddy-buddy" relationship with your customers. Customers
do not want that. Relationship Marketing uses the event-driven tactics of customer retention marketing,
but treats marketing as a process over time rather than single unconnected events. By molding the
marketing message and tactics to the LifeCycle of the customer, the Relationship Marketing approach
achieves very high customer satisfaction and is highly profitable.

The relationship marketing process is usually defined as a series of stages, and there are many different
names given to these stages, depending on the marketing perspective and the type of business. For
example, working from the relationship beginning to the end:

Interaction > Communication > Valuation > Termination

Awareness > Comparison > Transaction > Reinforcement > Advocacy

Suspect > Prospect > Customer > Partner > Advocate > Former Customer

Using the relationship marketing approach, you customize programs for individual consumer groups and
the stage of the process they are going through as opposed to some forms of database marketing where
everybody would get virtually the same promotions, with perhaps a change in offer. The stage in the
customer LifeCycle determines the marketing approach used with the customer.

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A simple example of this would be sending new customers a "Welcome Kit," which might have an incentive
to make a second purchase. If 60 days pass and the customer has not made a second purchase, you would
follow up with an e-mailed discount. You are using customer behavior over time (the customer LifeCycle)
to trigger the marketing approach.

Let's say a customer visits your site every day and then just stops. Something has happened. They are
unhappy with the content, or they have found an alternative source. Or perhaps they’re just plain not
interested in the subject anymore. This inaction on their part is a trigger telling you something has
happened to change the way this customer thinks about your site and perhaps your service.

You should react to this and then look for feedback from the customer. If you improve the content, e-
mail them a notice, and if the customer starts visiting again, the feedback has been given. The cycle is
complete until the next time the data indicates a change in behavior, and you need to react to the
change with communication.

Let’s say this same customer then makes a first purchase. This is an enormously important piece of data,
because it indicates a very significant change in behavior. You have a new relationship now, a deeper
one. You should react and look for feedback.

You send a welcome message, thank the customer for the trust they have displayed in your site, and
provide a second purchase discount. Then you await feedback from the customer, in the form of a second
purchase, or increased visits. Perhaps you get negative feedback, a return of the first purchase. React to
this new feedback and repeat the process.

All of the marketing decisions in the examples above were triggered by customer behavior, the actions of
the customer as tracked by their activity (or lack of activity). This activity tracked over time is the
customer LifeCycle.

If you can track customer LifeCycles, you can begin to predict them, and if you can predict them, you can
target your marketing efforts at the most critical trigger points in the customer LifeCycle. This approach
eliminates a lot of wasted marketing spending, and creates very high ROI marketing campaigns. You
spend less money overall, and the money you spend is much more effective.

All of the above is accomplished by using the data customers create through their interactions with you to
build simple LifeCycle models or rules to follow. The relationship marketing approach then uses this
LifeCycle model as a "timing blueprint" to follow, targeting the right customers at the right time, with the
most profitable offer.

Traditional marketing concepts were generated in the Fast Consumer Goods Sectors that
were the powerhouse industrial sectors of the United States until the 80´s
However in post industrial societies services become the dominant activities of the most
developed countries. New technologies like the Internet emerged and changed deeply

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people’s daily activities and the way firms created links with customers.
New Marketing ideas and concepts appeared as a result to these changes: acquiring
customers was replaced by a new marketing objective, retaining customers, and new ideas
like loyalty programs and marketing one-to-one started to appear. New Information
Technology developments allowed the appearance of new tools like database marketing and
internet marketing that supported and put in practice loyalty programs.
In this course we will cover some concepts of relationship marketing and we will develop an
applied project based on the net that allows you to put in practice marketing concepts.

Relationship marketing delivers many benefits to a design firm, big or small. Slowly but surely, as you
build your client and prospect list, you'll be able to reduce marketing expenses, build referrals, and grow
your business in step with your clients' needs.

1. Change your Perspective from "Here's what I do" to "What do you need?"

The cornerstone of successful relationships is to discover precisely what your clients need and want.

2. Recognize your Vulnerability:

In the midst of a project, you might be in touch with your client several times a week. But it's the time
between projects that is crucial to relationship-building. Once the work is done, you drop out of that
enviable top-of-mind awareness position. Over time, your client isn't as likely to think of you as their first
port of call for a solution to their problem. This is when you're most vulnerable to replacement by a
competitor.

Fortunately, an affordable solution can help you retain those clients you worked so hard to acquire.

3. Keep in touch:

It's such a simple concept, but keeping in touch often sinks to the bottom of the 'to do' list. The single
easiest way to keep in touch is to publish an email newsletter. Ask clients to subscribe and insert a
subscription box on your site to capture email addresses of prospects who like the look of what you're
doing.

The secret to a good newsletter is to avoid blatant self-promotion, and instead offer valuable information
to your subscribers. With their permission, you have the opportunity to drop into their email boxes every
month with news, tips, case-studies, FAQs, and other relevant info that subtly promotes your services,
reinforces your brand, educates your clients, and builds trust.

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4. Position Yourself as an Expert.

5. Grow to Meet Client Needs.

The Payoff

The benefits of a relationship marketing approach go both ways. Your client views you as a valuable
consultant, rather than a cost center. Your potential for increased revenues and a long-lasting
relationship is real.

There's payoff for you, too, including reduced marketing expenses measured in both time and money. If
you can retain more clients for longer periods, you'll trim costly space advertising and other marketing
costs.

If you ask, you'll get more referrals from your clients. Priceless word-of-mouth endorsements from
satisfied customers will result in new business which magically walks in the door.

You won't even have to request client testimonials. Start by recognizing when you receive a spontaneous
testimonial, whether it's in an email, thank-you letter, or a conversation. Ask your client if you may use
his words and name in your brochure and on your site, with a link to his business. Most often, the answer
is yes. Testimonials are a critical piece of successful service marketing and worth their weight in
whatever precious metal you value.

Case-studies will be a breeze and add a powerful marketing tool - perfect for your Website or for
inclusion in printed marketing materials. Follow a 'situation -- problem -- solution -- benefits' flow to
highlight how you solved the client's problem, stressing the benefits the client now enjoys as a result of
your work. Use a handful of client case studies in industries you're targeting for new business
development. Examples of "just like me" situations help prospective clients understand exactly how useful
your services are.

Relationship-focused marketing isn't something that will happen overnight. It requires a change in thinking
and some discipline along the way. Your email newsletter won't do much good unless you publish it
regularly and the content is valued by your subscribers. But the rewards can be significant. And the truth
is that no matter how wonderful you are, clients go away. Their businesses close down, change focus, or
are sold.

Media has played an important role in this perspective. Media-related commercial marketing aimed at
promoting the purchase of products and services by children, and by adults for children, is ubiquitous and
has been associated with negative health consequences such as poor nutrition and physical inactivity. But,
as Douglas Evans points out, not all marketing in the electronic media is confined to the sale of products.
Increasingly savvy social marketers have begun to make extensive use of the same techniques and
strategies used by commercial marketers to promote healthful behaviors and to counter some of the
negative effects of conventional media marketing to children and adolescents.

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Evans points out that social marketing campaigns have been effective in helping to prevent and control
tobacco use, increase physical activity, improve nutrition, and promote condom use, as well as other
positive health behaviors. He reviews the evidence from a number of major recent campaigns and
programming in the United States and overseas and describes the evaluation and research methods used
to determine their effectiveness.

He begins his review of the field of social marketing by describing how it uses many of the strategies
practiced so successfully in commercial marketing. He notes the recent development of public health
brands and the use of branding as a health promotion strategy. He then goes on to show how social
marketing can promote healthful behavior, how it can counter media messages about unhealthful
behavior, and how it can encourage discussions between parents and children.

Evans concludes by noting some potential future applications to promote healthful media use by children
and adolescents and to mitigate the effects of exposure to commercial marketing. These include adapting
lessons learned from previous successful campaigns, such as delivering branded messages that promote
healthful alternative behaviors. Evans also outlines a message strategy to promote "smart media use" to
parents, children, and adolescents and suggests a brand based on personal interaction as a desirable
alternative to "virtual interaction."

In the end it could easily be revealed that change is compulsory for survival in market. Relationship
marketing is something which has helped a lot to the organizations in generating abnormal profits.

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