Many businessmen had to face the fact that their management activities did not bring the expected results. What is the matter, why sometimes projects are not implemented as we would like, or they did not become as successful as originally planned? Very often the problem is that managers do not quite understand how important it is to be able to properly build fruitful relationships with their business partners and clients. While Western business development experts have brought this line of business into a separate science, not all entrepreneurs use their experience in reality.
Relationship marketing is still a fairly young concept that does not have a single definition. This discipline causes a lot of controversy and questions, because most often its theory is based only on the basis of empirical research by specialists from the field of marketing. In recent years, a sufficient amount of information has accumulated on how relationships affect the development of companies and brands, but all this knowledge has only just begun to be systematized and transferred from the plane of abstract data to a more practical channel.
Reorienting Emphasis
Most recently, the highest results were achieved by those entrepreneurs who could offer their customers a quality product at an affordable price. Over time, the number of criteria determining the success of a business has increased. They can be briefly described using the theory of the four “Ps” known to any marketer:
- product (product) - the creation of good;
- price (price) - determination of an acceptable price;
- promotion (marketing) - market promotion;
- place (place of sales) - the right choice of a place of sale, limiting your target audience.
At the dawn of the development of capitalism, as well as during its heyday, following such a concept really brought substantial profits to companies. However, now high competition in each of the business areas is forcing all participants in market relations to raise the bar for the provision of services. Consumers have become more demanding, they are no longer satisfied with the minimum set that all more or less normal companies offer. When searching for new development paths for business structures, promotion specialists noticed how strongly the loyalty of partners and clients affects the success of the project. In this regard, the concept of relationship marketing was introduced into economic science. Initially, it was applied only to industrial enterprises, but over time it began to become more and more identified with the service sector, since it was in this direction of commercial activity that the most active increase in profitability was observed. Nevertheless, relationship marketing should be considered from several perspectives at once, for example, “manufacturer - supplier”, “manufacturer - distributor”, “distributor - end customer”.
The complexity of the definition
Theoretical economists have been studying the relationship between various economic entities for several decades. But despite the existing successes in this matter, they have so far been able to give an unambiguous definition of what relationship marketing is. Interactions in commercial activities are so vast and unpredictable, they are influenced by such a large number of third-party factors that each marketer has his own opinion about the correct definition of this concept.
On the one hand, it refers to the climate management processes that have been created between all business partners (suppliers, distributors, customers), and on the other hand, marketers believe that a more targeted approach to each of these groups of partners is much more important. They put forward the theory that the company will be more productive in one-on-one format with the client. That is, all marketing research is carried out about each specific partner, and all subsequent promotion actions should be directed at him personally, then a truly loyal relationship will be built between him and the company.
It is also not entirely clear who is facing the task of attracting and retaining customers, and more importantly, to find new ones or keep old ones. Ideally, a well-built marketing of relationships with consumers should not only be the idea of the head of the company, it should be “implanted” in the strategy of the enterprise and made a starting point for the functioning of all employees.
Generally accepted standard
Summing up the above, we can conclude that by and large this concept is very multifaceted. In order to somehow standardize and unify relationship marketing, it must be considered comprehensively. It is important for the head of the company to be able to correctly prioritize activities and direct his efforts in the right direction. For this, economists made a visual diagram similar to the famous Maslow pyramid, in which the depth of the study of different types of relationships with partners is determined at three levels:
- database marketing;
- partnering with partners;
- relations with consumers.
This ranking demonstrates that, nevertheless, customer relations are key to business development. Thus, we can conclude that relationship marketing is the management of the processes of building long-term relationships with major business partners. There are several fundamental points that separate successful business relationships from unpromising ones. First, relationship marketing should be aimed at ensuring that partners bring the company profit or other benefits. Secondly, it confirms the fact that retaining existing customers, distributors and suppliers costs the company many times cheaper than finding new ones.
Main course
Relationship marketing management is aimed at achieving stable privileged relationships with business partners, as well as increasing the company's competitiveness in the market. That is, she needs to achieve such a level of loyalty from customers, suppliers and other entities relating to the production or marketing of the product, which would contribute to a stable profit. This is precisely the goal of relationship marketing.
The main tools for achieving such results are:
- adequate pricing policy;
- first class service;
- focused work with key partners.
Relationship marketing helps to achieve profitability for the company not due to the fact that the staff will sell one product to thousands of customers, on the contrary, sales managers must work out each customer as best as possible in order to realize several positions at once. Good results are achieved through an individual approach to consumers.
Tasks
But all the same, marketing is not sales in its purest form, it is only the tool that helps them increase, promote the product on the market. Despite the vague wording of this economic doctrine, its results are quite predictable, they can be estimated and analyzed. So, if the marketing campaign went off with a bang, then this is very likely to entail an increase in the profitability of the enterprise.
Relationships in this regard are a little more complicated, because this is an even more abstract concept related to the intended results. The objectives of relationship marketing are not limited solely to a banal increase in sales and to growing turnover. They relate to such aspects of interaction between business partners:
- guarantees of long-term liabilities;
- speed of response to commercial offers;
- level of trust between partners;
- their mutual interest in each other.
The main task facing relationship marketing is, first of all, to build trustful relationships between partners with far-reaching plans. If successful, the company receives an invaluable asset in its portfolio, which in the future will become an excellent prerequisite for the implementation of its strategic goals.
Relationship Marketing Concept
The main slogan of the "fathers" of the doctrine of the relationship between business partners is the phrase: "The conclusion of the transaction is not the end of the relationship with the client, but their beginning."
Based on this postulate, we can say that the main concept of relationship marketing is high-quality after-sales customer service. The company must “tie” the client to itself, making it its permanent partner, providing him with such an exhaustive range of services that he will not need to contact another organization with a similar question.
In what form is expressed?
The main form of relationship marketing has clear commercial outlines. Any actions of the company are always aimed at increasing profits. Therefore, it does not make sense to maintain good relations with customers or suppliers if it does not bring real money now or does not have prospects for generating income in the future. You need to clearly understand that sometimes customer service is too expensive for the company, and the resources spent on its retention do not pay off.
Of course, in this case we can talk about prestige, raising the status, but you should always consider all the pros and cons of interacting with customers, especially from the VIP category. Relationship marketing is not necessarily work for one specific consumer. Often you need to evaluate the effectiveness of promoting a product or service with a specific target audience.
Examples
Very good examples of high-level relationship marketing are the sale of banking, insurance, medical services or goods intended for a specific group of consumers - youth, children, retirees, etc.
Many financial organizations, having debugged the mechanism of their work, began a full-scale capture of potential customers. Moreover, the tactics of their actions look quite aggressive. Most often they promote their products through various information channels, direct impact on consumers, personalized messages, the comprehensive imposition of their services, including violent ones (through direct agreements with employers, hospitals, etc.).
But few companies can act so openly, for example, it is difficult for industrial enterprises to establish a direct dialogue with their customers. Nevertheless, there are a number of brands that have accomplished this task. For example, the Italian confectionery giant Ferrero. Their marketing campaigns have a strict focus vector, in addition, the company has well-functioning feedback mechanisms with its customers, it cares about its reputation, being a role model in its field of activity.
Macro approach to the issue
Customer relationship marketing strategies are always aimed at long-term partnerships, maintaining long-term relationships with consumers and business partners.
Relationship marketing strategy should address the following issues:
- ways of forming long-term relationships with customers;
- search for responsible and mandatory partners;
- increasing customer loyalty;
- work with databases;
- creating an attractive company image in the eyes of partners and consumers.
Of course, in each individual case, the marketing strategy will have the features inherent in one particular company, this is the difficulty in building long-term working relationships - it is impossible to rely entirely on the experience of other enterprises, because too many external factors affect the success of any project.
Interaction problems
On the one hand, the company is faced with the question of how to build relationships with business partners - suppliers, distributors, contractors, subsidiaries and stand-alone units. In this vein, the only right decision that can partly guarantee a fruitful, stable, long-term relationship is to document the relationship. Oral business arrangements are not acceptable. Nothing reliably holds a deal together like a well-written detailed contract.
Interpersonal relationships
But with personal communication, things are much more complicated. No contract will make two people like each other. If antipathy is brewing between partners, they are unlikely to work well in the future. This explains in many respects that relationship marketing very often depends on the human factor. Experts in this area believe that any company strategy based on building long-term relationships with customers should have support from employees at all levels of value creation. That is, it should be equally implemented by all employees of the enterprise, from top management to simple workers.
Catching up with the whole world
At the moment, relationship marketing in Russia and abroad has significant differences. The customer focus of domestic enterprises has not yet reached the Western level, although it is very committed to European and American options for assessing the quality of work. By and large, they are being pushed by consumers themselves, who, when they are abroad, know what good service and after-sales customer service are. The first companies on this path were companies with foreign capital, as well as those that operate on franchises. It is expected that after them their Russian competitors will also win customers, trying to win their place in the sun.