Relationship Marketing Essay

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Holistic Relationship Marketing

Relationship Marketing

Relationship marketing is one of the fastest growing research topics in business and marketing today. The premise of relationship marketing is very broad and includes or should include external and internal relationship building as a reciprocal factor for firm success. Successful relationship marketing, according to the literature, results in high productivity, high employee and customer satisfaction, low employee and customer attrition and ultimately high profitability and success. According to businessdictionary.com relationship marketing is defined as: Marketing activities that are aimed at developing and managing trusting and long-term relationships with larger customers. In relationship marketing, customer profile, buying patterns, and history of contacts are maintained in a sales database, and an account executive is assigned to one or more major customers to fulfill their needs and maintain the relationship (n.d.) Yet, fundamentally, this definition of relationship marketing (RM) demonstrates only one aspect of its purpose, which is ultimately for the firm to develop both internal (employee) and external (customer) relationships by building and maintaining professional and possibly even personal relationships with all members of the firm community. The defining desire of relationship marketing is to make each participating member, be it a large or even in some cases small customers, firm employees and even suppliers all feel as if they are valued and respected. The goal of relationship marketing being to make each feel important to the firm and supported in whatever way possible. This work will discuss RM in these terms, as both an internal and external tool to support firm success arguing the thesis that relationship marketing is both an external and internal component of success as well as a vital component for successful marketing of firms. To perform this analysis the work will first look at a base of literature that supports either internal or external relationship marketing or both and then use this information to investigate an existing firm which states a mission focused on both internal and external relationship marketing and reports success. The firm analyzed will report factors of success in this process using a holistic relationship marketing mission and will; report high customer and employee satisfaction, low levels of employee and customer attrition, higher productivity and higher profitability as compared to a previous mission structure.

Table of Contents

Executive Summary 2

Table of Contents 3

Introduction 4

Applying Holistic Relationship Marketing Theory 5

Relationship Marketing Theory 5

Relationship Marketing External 7

Relationship Marketing Internal 8

Holistic Relationship Marketing 9

Market and Firm History and Background 10

Historical Mission 11

Implementation of Holistic RM 11

Firm Outcomes Analysis 12

Discussion of Outcomes 12

Conclusion 13

References 15

Introduction

Relationship marketing is one of the fastest growing research topics in business and marketing today. The premise of relationship marketing is very broad and includes or should include external and internal relationship building as a reciprocal factor for firm success. Successful relationship marketing, according to the literature, results in high productivity, high employee and customer satisfaction, low employee and customer attrition and ultimately high profitability and success (Ballantyne, 1997, pp. 343-366; Ballantyne, 2000, pp. 274-286; Herington, Johnson & Scott, 2006, pp. 364-381). According to businessdictionary.com relationship marketing is defined as: Marketing activities that are aimed at developing and managing trusting and long-term relationships with larger customers. In relationship marketing, customer profile, buying patterns, and history of contacts are maintained in a sales database, and an account executive is assigned to one or more major customers to fulfill their needs and maintain the relationship (n.d.) Yet, fundamentally, this definition of relationship marketing (RM) demonstrates only one aspect of its purpose, which is ultimately for the firm to develop both internal (employee) and external (customer) relationships by building and maintaining professional and possibly even personal relationships with all members of the firm community.

The defining desire of relationship marketing is to make each participating member, be it a large or even in some cases small customers, firm employees and even suppliers all feel as if they are valued and respected. The goal of relationship marketing being to make each feel important to the firm and supported in whatever way possible. This work will discuss RM in these terms, as both an internal and external tool to support firm success arguing the thesis that relationship marketing is both an external and internal component of success as well as a vital component for successful marketing of firms. To perform this analysis the work will first look at a base of literature that supports either internal or external relationship marketing or both and then use this information to investigate an existing firm which states a mission focused on both internal and external relationship marketing and reports success. The firm analyzed will report factors of success in this process using a holistic relationship marketing mission and will; report high customer and employee satisfaction, low levels of employee and customer attrition, higher productivity and higher profitability as compared to a previous mission structure.

Applying Holistic Relationship Marketing Theory

Relationship Marketing Theory

Relationship marketing has a relatively short history in the business and marketing world, and has been and will likely continue to be defined as the manner in which firms develop and maintain lasting relationships with existing customers in an attempt to retain and reengage these same customers. There is a clear sense that external relationship marketing demonstrates a more effective business strategy than attempting to gain new customers, dollar per dollar as existing customers already have a relationship with the firm and to some degree understand the workings of the firm. Companies that retain existing customers while creating new ones experience much more rapid growth. (Seroka, Feb 2000, p. 43). The reasons for success associated with the narrow definition of RM is associated with lower cost of contact, meaning that it costs less in time and resources to communicate with existing customers than it does to seek novel customers via various marketing means. RM has also been traditionally focused on larger customers, where the firm places most of its resources on keeping the big customers close and happy so that when they seek to utilize services again. Kindling and rekindling these relationships can vary a great deal by business and industry but as is noted in businessdictionary.com this often means the one on one relationship development with large customers. Historically speaking the RM trend began in the mid 1970s in Europe with a small group of firms in the industrial marketing and purchasing group (IMP) and was then introduced to the services industry and lastly to consumer markets (Veloutsou, Saren & Tzokas, 2002, p. 433). The RM trend as a business strategy then has expanded to nearly every area of business, with the first proponents working in relatively small number relationship markets, where suppliers and consumers dealt with large quantities of products in big numbers and has grown to be included as part of companies that deal with direct consumer purchasing where each customer is seeking to purchase and/or utilize only a small percentage of business share. The necessity of retaining customers is high as just a single customer could potentially make a huge impact if he or she were to seek out and purchase those same materials from another supplier. Business models that might utilize this later RM strategy are firms like banks or travel agencies where there are examples of both large and small customers and the firm attempts to make each encounter with each as easy, pleasant and memorable as possible.

Relationship Marketing External

As has been stated previously external RM is the first conception of the practice, with the longest tradition and the most infrastructural development. The services and standards associated with building customer relationships have been around for a long time and RM as a marketing strategy gave it a name and a structure for both business and research development. The goal of many firms then became one that attempted to make a customer and customer for life (Seroka, Feb 2000, p. 43). Increased pressure from demanding customers is a mark of the business world today and companies must respond to that effectively to gain competitive advantage. (Herington, Johnson & Scott, 2006, p. 364) This emphasis has led to trends that focus on customer relationships as the most important aspect of keeping and gaining market share in a mass market sense. Early purveyors of the expanded conception of RM as a tool that can be used by business with large customer bases, where single customers only represent alone small transactions but together represent large business percentages began to recognize the need to emphasize positive customer relations as crucial and foundational to success. These firms then began to place great emphasis on building huge multi-access point databases that contained customer information to aide in the process of employee recognition of customer history and were an attempt to create relationships even when the customer might be accessing a different employee contact point at every encounter. (Lee & Trim, 2007) Some firms even stepped towards creating…[continue]

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