Definition: The Relationship Marketing refers to the activities undertaken by the firm to establish and maintain the profitability and the long-term relationship with the customers.
The Relationship marketing differs from the Traditional marketing in the sense that the former rely heavily on the customer retention and their satisfaction, that results in the long term relationship and the repeated sales, whereas, the latter emphasized majorly on customer acquisition and one-time sales without giving much importance to building relationships.
Nowadays companies have adopted the customized marketing strategies rather than the mass marketing program. Providing exactly what customers want and maintaining a proper communication with them increases the satisfaction level of the customers.
E.g. The Dominos emphasizes on relationship marketing by making the feedback calls to the customers, to know about the quality of their pizza, once delivered.
Benefits of Relationship Marketing
- The Relationship Marketing ensures the long-term retention of the customer. When the company focuses on increasing the customer satisfaction by providing exactly what the customer wants, then the customer is likely to stay longer with the brand.
- The word of mouth plays a crucial role in marketing the product or services. When the customer is satisfied with the brand, he will definitely refer it to his family, friends, peers and colleagues. This will ultimately lead to the increase in the revenue and the customer base of the firm.
- Once the strong relationship is formed with the customer, then even the rise in the price of a product due to the change in the economic conditions, won’t have a much effect on customer purchase. Thus, the relationship marketing helps in retaining the customer even in the worst economic conditions.
- When the customer shares a healthy relationship and is happy with the brand, will readily give its valuable feedback for the firm’s new product or service launched in the market.
- The companies can gain the competitive edge over the other competitors by offering a more personal touch to the customers. This can be achieved if the company is,
- Honest and keep an open line of communication
- Maintains a proper feedback channel
- Provides an efficient service support
- Interacts with customers online via social media.
- Monitors the image of the brand online and respond accordingly.
The relationship marketing is the main component of the Customer Relationship Management that focuses on creating the loyalty and long-term customer engagement with the brand rather than focusing on attaining the short term goal of customer acquisition and sales.