Marketing relationship

Relationship marketing aims to build stronger, long-term relationships with customers and other businesses. The business is carried out through strategic orientation, where the relationship with existing customers is improved rather than finding new ones. It aims to meet the needs of individual customers. The main part of it includes studying the customer's need and how it changes in different circumstances.

Relationship marketing applies techniques such as marketing, sales, customer service, and communication. Not only is the relationship strengthened, but its life span is increased through these strategies. When a customer realizes the value of the relationship, they get closer. This marketing focuses not only on building relationships and attracting customers to their products and services but also on how to retain them.

An early form of marketing emerged in the 1960s. But organizations were still having difficulty selling products, so a system was developed to sell low-cost goods to a wider range of customers. Leonard Perry and Jag Sheth created this marketing in 1982. It started in B2B markets and industries, which involved long-term contracts for many years. Over time, different marketing strategies have been improved and relationship marketing is one of them.

Relationship marketing applies when customers have many options in the market for the same product or service and the customer has the right to make the choice decision. In such type of market, companies try to retain their customers by providing relatively better products and good service, thus achieving customer loyalty. Once this is achieved, it becomes difficult for competitors to perform well in the market. Customer turnover rate was not given attention as the main concern was customer satisfaction. This type of marketing was initially called defensive marketing. Aggressive marketing is a marketing strategy in which new customers are not only attracted but sales are also increased through increased repeat purchase. This type of marketing focuses on liberating dissatisfied customers and acquiring new ones.

According to one research, the cost of retaining an old customer is only ten percent of the cost of acquiring a new one, which makes sense for not running to get new customers in relationship marketing. According to another research conducted through cross-sectional analysis, he says that a five percent improvement in customer retention is responsible for twenty-five to eighty-five percent of profit. A high cost is usually incurred when acquiring new customers, so if enough existing customers are retained, there will be no need to acquire new customers.

Once the customer's trust is gained, his chances of switching to another company become relatively less, he buys goods in bulk, buys other complementary goods and starts neglecting the average price change. This maintains unit sales volume and there is an increase in dollar sales volume. Existing customers will be a live advertisement. If he is happy with the company he will recommend it to his friends and acquaintances.

Since existing clients are familiar with the process, it will take less time and money to educate them about the procedures which puts less burden on employees as well and makes them feel more satisfied with their jobs. Customers are divided into groups based on their loyalty. This procedure is known as the customer loyalty relationship ladder. The groups in ascending order are Prospects, Customers, Customers, Supporters, Advocates and Partners.

Due to advances in computers and the Internet, software has been developed to facilitate customer relationship management. With the help of this software, customers' tastes, activities, preferences and complaints are tracked. Almost all companies have this program in their marketing strategy, which benefits the customer and the company as well.

Hence the main objective of relationship marketing is to build and maintain relationship with committed customers aiming to generate profit for the company. Other benefits achieved are trust building and social benefits.