Relationship marketing was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions.Relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages.
With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels.Modern consumer marketing originated in the 1960s and 70s as companies found it more profitable to sell relatively low-value products to masses of customers. Over the decades, attempts have been made to broaden the scope of marketing, relationship marketing being one of these attempts. Arguably, customer value has been greatly enriched by these contributions.The practice of relationship marketing has been facilitated by several generations of customer relationship management software that allow tracking and analysing of each customer's preferences, activities, tastes, likes, dislikes, and complaints.For example, Tesco maintaining a database of what their regular customers buy, when and how much of it, can then send offers and email vouchers to their customers based on what they buy when they are most likely to need it.
Every time you check out at Tesco, you swipe your ClubCard that way giving Tesco information about what you buy. If you buy birthday cards early in June every year, next year Tesco will email you vouchers for birthday cards and presents.In web applications, the consumer shopping profile can be built as the person shops on the website. This information is then used to compute what can be his or her likely preferences in other categories. These predicted offerings can then be shown to the customer through cross-sell, email recommendation and other channels. When you shop online at Amazon and eBay, they always have a section on the side or at the bottom of the page in the lines of ‘other customers also bought…’The main aim of relationship marketing is to build a customer-business relationship which can prove to be valuable over longer period of time.
This is the exact opposite of transactional marketing where the business focuses on attracting customer to buy something just once. For example, a high street shop might want you to buy a DVD but they are not expecting you to come again whereas Tesco gives you vouchers to make sure you come again. Making a sale every time a customer comes through the door may be profitable but having a lifetime customer will be more valuable over time. It’s cheaper to retain an existing customer, than attracting someone completely new.“We want Tesco to be a company that earns trust, not just respect, through everything we do – be it our in-store shopping trip, our Price Promise, or our determination to assure customers on food quality. We want to be a business that customers, colleagues and communities trust and are loyal to.
”Tesco have introduced their ClubCard scheme as a relationship marketing tool to help them achieve their aim of having trustworthy and loyal customers. Quite a few people today earn enough to be able to choose their grocery provider not just based on the value but also their customer experience.
