Relationship Marketing Effective Strategies for Customer Retention

Relationship Marketing

Effective Strategies for Customer Retention in the Digital Age: A Comparison of Relationship Marketing Models

Few aspects of modern society have been left untouched by the Digital Revolution and the advances that have been made in mobile technologies. Phone books, which were still incredibly useful resources for many just a decade ago, are now almost laughably archaic wastes of paper; our phones themselves can make restaurant recommendations, find a doctor's phone number, and even perform these functions on their own with a simple voice command. Encyclopedias have gone much the same way, with an (over)abundance of information available on the Internet supplying enough variety to make up for, according to many perspectives, the increased need to verify reliability. The very way in which we receive and process information has been changed by such technologies, and this cannot help but be noticed and acted upon by those that depend on the human ability to process information.

It is perhaps not surprising, then, that one of the biggest changes that has occurred as part of the Digital Revolution is to be found in the field of marketing. Information processing is the mechanism by which marketing operates, and which marketers are always trying to engage in more efficient and effective ways. One of the major developments in the marketing arena over the past few decades has been the emergence of what is known as relationship marketing, which is a fundamental shift in the overall approach to marketing. In relationship marketing models, marketing strategies deal with customers over a full time span rather than in discrete moments.

This paper will examine two distinct relationship marketing models, allowing for a demonstration of the perspectives and roles that are common to the grand framework of relationship marketing generally, and which aspects are prone to individual definition and difference based on the specifics of the industry, organization, or situation in which the marketing strategy is being employed. A behavior oriented model, of which there are several even more specific models, will be compared with a process oriented model of relationship marketing, of which there are also several sub-varieties. From the comparison of these two types of models within the larger relationship marketing framework, and understanding of relationship marketing perspectives and their usefulness in a wide variety of settings can be demonstrating, allowing the reader to more effectively utilize marketing strategies relevant to the current era.

Behavior Oriented Models

One way to view behavior oriented models of relationship marketing is to see the marketing relationship as one that unfolds based on certain triggers -- i.e. customer behaviors (Novo 2011). Simply put, a series of strategies can be developed that encourage an ongoing relationship between the customer and the company offering a good or service, with specific strategies being employed based on specific customer behaviors (Novo 2011; Bruhn 2003). Implementing such a strategy requires a fair amount of knowledge regarding consumer behaviors up front -- what certain actions tend to indicate, and how a specific marketing tactic might affect various consumers, for instance -- and can be highly effective (Peck 1999).

There are several ways in which behavior oriented relationship marketing strategies can be modeled and employed, depending on the specific business and industry needs and operating mechanisms. In some businesses, such as brick-and-mortar retail establishments, the first contact between the business and a customer might actually be a full interaction, whereas in service-oriented businesses with less approachable storefronts creating initial awareness might be the first step (Novo 2011). Outlines of various models and the different phases within them have been produced for a many different types of businesses and marketing perspectives; depending on the business and industry, the customer might potentially become a partner for a time, or perhaps there will be an advocacy relationship, or both might occur (Peck 1999; Buttle 1996). The key in a behavior oriented relationship marketing strategy is to be aware of the potential developments and to have responsive plans in place (Novo 2011).

Process Oriented Models

Though all marketing strategies can ultimately be thought of as behavior oriented, as they all seek to influence behavior, not all of them take as direct an approach as outlined above. In a process oriented relationship marketing strategy, the customer life cycle is seen as an ongoing process that all consumers go through in all businesses, though perhaps with varying paces and specifics (Hennig-Thurau & Hansen 2000). Rather than a variety of plans needing to exist for any particular behavior, then, in a process oriented model behavior needs to be analyzed only insofar as it demonstrates the phase a customer is in (Peck 1999).

Just as there different models within the larger behavior oriented framework, however, there are also several different ways to frame a process oriented relationship marketing strategy. These are differentiated more based on the perspective employed in the development of the underlying theory than on differences in business models or industry mechanisms (Hennig-Thurau & Hansen 2000; Bruhn 2003). One typical process oriented relationship marketing model, also called a dynamic model, breaks the customer life cycle into the following five stages: awareness, exploration, expansion, commitment, and dissolution (Hennig-Thurau & Hansen 2000). According to this model, the customer always eventually terminates its relationship with the company, though there is generally an increase in benefits for both the customer and the business for maintaining the longest relationship possible (Hennig-Thurau & Hansen 2000).

Similarities and Differences

There are many notable similarities in the behavior oriented and process oriented models of relationship marketing. Both model types break the customer-business relationship into a series of phases that comprise a life cycle, and require adjustments to marketing strategies and activities based on movements of the customer from one phase to the nest (Novo 2011; Peck 1999; Hennig-Thurau & Hansen 2000). When it comes to relationship marketing differences form other marketing strategies, it is clear that both behavior oriented and process oriented models view the goal of marketing as helping to unfold and maintain long-term customer relationships, which is of course relationship marketing's defining feature.