One of the most expensive and difficult tasks facing any business is acquiring new To retain current customers, businsses engage in relationship marketing. Deborah O. Aka1; Oladele J. Kehinde2; Olaleke O. Ogunnaike3. 1,2,3 Department of . the in uence of relationship marketing on customer. For better customer retention, keep these six relationship marketing strategies in mind. 1. Offer Quality Customer Service. As the name implies, relationship.
If relationship costs are minimized and relationship revenue is maximized over time, satisfied and loyal customers should generate greater profitability than short-term customers. Relationship Marketing and Customer Loyalty The basic philosophies of relationship marketing are based on the assumption that company-customer interactions and strategies can earn and keep the loyalty of customers Berry, Gummesson defines relationship marketing as a continuation of the mutual relationship between a service provider and a customer who will lead to formation of profitability.
Prior studies confirm that service companies have received incredible benefits of loyal customers Bagherzad, Chavosh, and Hosseinikhah, Yim, David and Chan defined customer loyalty as a highly deep commitment to keep on purchasing a product or service in the future regardless of the fact that there are situational factors and marketing efforts, which have been potential to create switching behavior.
In the banking sector, it is the main job of manager and marketers to create and develop customer loyalty if they want to maintain their company and increase its profitability.
How to Improve Your Relationship Marketing
Therefore, we hypothesize the association between relationship marketing and customer loyalty as follows: Relationship marketing influences customer loyalty. Relationship Marketing and Customer Satisfaction Doyle argues that the three cornerstones of relationship marketing are: Kotler argues that customer satisfaction management includes the comparison between the expected delivered value and the real delivered-value as well as the image of the company, the readiness to reaction, the dependability and the product attributes.
The customer will be satisfied if the performance matches or exceeds the expectations, and in contrary, the customer will be dissatisfied if the performance falls short of the expectation. Thus, it will increase the customer satisfaction and relationship strength of the banks Barnes and Howlett, ; Ennew and Binks, Therefore, based on those empirical findings, hypothesis 2 is proposed as below: Relationship marketing tactics influence customer satisfaction.
Relationship Marketing and Customer Trust The final concept necessary to build relationships is trust. Trust relates to the belief that a customer has in an honest investment and engagement with the service provider Peltier, Pointer, and Schibrowsky, In the banking context, trust is defined as customer confidence in the quality and reliability of the services offered by the organization Garbarino and Johnson, It becomes the moral values that are established to enhance their business relationship between banks and customers.
Dwyer, Schurr, and Oh argue that trust is considered the foundation of strategic partnerships, and it seems to be a mediating or intermediary element in provider-customer relationships.
Prior studies find trust to be the core of the relational approach and consider it key to the development of the notion of commitment in provider-user relationships Gundlach and Murphy, ; Nooteboom et al. Therefore, based on the prior empirical findings, hypothesis 3 is proposed as below: Relationship marketing tactics affect customer trust.
Customer Satisfaction, Customer Trust and Customer Loyalty Customer satisfaction is important because satisfied customers are less likely to switch to a competitor Kotler, Customers in successful relationships have been far more potential for loyalty as they are often prepared to pay a premium price for goods or services Newell, According to Doylea highly satisfied customer will exhibit the following characteristics: The study of Flint, Blocker and Boutin shows the customer loyalty is derived when organizations give more importance to the expectations of its customers.
Prior studies confirm that customer satisfaction and loyalty are highly correlated Athanassopoulos, Gounaris, and Strathakopoulos, ; Hallowell, ; Silvestro and Cross, Based on those empirical findings, we proposed the following hypothesis: Customer satisfaction influences customer loyalty According to the study of Coulter and Coultermore than half of bank customers believe that having a relationship of trust with their financial institution is more important than getting the best value for money.Principles of Marketing Lesson 1 #3 - Building Customer Relationships
It means that when the customers have trust on the services and products of a company, then it will lead them towards loyalty Ribbink, Liljander, and Streukens, Even though there are several factors that determine customer loyalty, the role of trust is a crucial one Harris and Goode, It affirms that customer loyalty begins with trust.
Based on those prior findings, we hypothesize the relation between customer trust and customer loyalty as follows: Customer trust affects customer loyalty.
We summarize all proposed hypotheses as seen in Table 1. Summary of Hypotheses Therefore, we model the hypotheses testing in the following research framework: Specifically, it tests customer satisfaction and customer trust as the intervening variables in the linkage of relationship marketing and customer loyalty.
The results will provide valuable and recent information on the relationship marketing tactics that marketers can use to form the bank image. Methodology and Research Model To study the linkage between relationship marketing and customer loyalty, we used bank customers as the sample, which has certain characteristics, such as his or her minimum age is 17 years old, have been the customer at least for one year, and have made more than six times banking transactions within the last six months.
How to Improve Your Relationship Marketing | Social Media Today
We argued that respondents with those characteristics could evaluate the marketing tactics developed by the banks. We employed personal interviews using questionnaires as a measurement tool to collect the data, and which were conducted during the period January to May To support the primary data, we also explored the documented data on the customer surveys done by the banks.
In this study, to measure marketing relational tactics, we adapt the work of Yen, Liu, and Chaowhich has three dimensions, i. These dimensions are measured in eight indicators. Larger companies typically invest the most in carrying out sophisticated relationship marketing campaigns. In some major companies, relationship marketing is a strategy that affects every department with a client facing purpose sales, customer service, shipping etc. Industry leaders constantly face competition from new companies who claim to provide similar goods with a higher-quality level of service.
Holding onto their existing customers is the only way they can maintain their position at the top of their industry. This is true for businesses in all industries, from cell phones to baby food. When the company changed the font in their ubiquitous catalog, Ikea lovers took to the Internet to air their complaints.
Rather than alienate their customers for a trivial reason, Ikea changed the font back in the next catalog. Direct Recruitment — The direct mail marketing firm sends out handwritten birthday cards to clients and associates every year.
This simple, personal touch helps clients feel like Direct Recruitment cares about them as people rather than simply consumers. American Airlines — The airline maintains a comprehensive frequent flyer program that rewards customer loyalty with the promise of free flights, upgrades, and discounts. Dell — Dell computers created a special online store for high volume corporate customers. By tailoring the ordering process to the specific customer's needs, Dell was able to expedite many of the hassles corporate technology buyers face.
Providing a higher level of service leads to increased loyalty.
Vyvanse — The makers of the popular ADHD drug created an extensive online portal that included videos, forums, expert articles, and mobile apps to help those who suffer from ADHD. Rather than relying on the strength of the product alone, the drug makers created a place for users to gather and interact that was linked back to the company.
Sites like Facebook and Twitter make it fast and easy for companies to communicate information to their customers. But in order to make this a long term relationship, the company has to get their customers to become regular followers of their social media profiles. As the chart shows, most customers do not elect to follow a company out of mere curiosity. Companies can increase their social media followers if they offer incentives like coupons or insider information. Relationship marketing can involve revising major aspects of the way a company conducts business.
This can be expensive, time consuming, and have serious consequences for both customers and employees.
The only way to carry out a relationship marketing strategy in a thoughtful and effective way is to follow a comprehensive marketing plan. Companies must first look at demographic and historical data about their customers to understand who they are, what they buy, and how to provide for them over the long term. The company must understand why a consumers returns for repeate business.
There is the tendency to think that customers return because the company has served them well, but maybe they return to a store because it is the closest to their house, or the only one in the area that stocks the product they want to buy. This means committing to it as well, not just having a Twitter bot that tells them to email with their details.
Relationship Marketing: How to Market to Your Customers
This also includes being available at the time of day they are active. To make a sweeping assumption: Again, a social intelligence tool can help you understand the hours of the day and days of the week that customers are tweeting about your brand or your product category in general.
Customer success tell them how good they are Customer loyalty programs are a mixed bag. Some say that they foster loyalty.
Relationship Marketing | What is Relationship Marketing?
Others say they eat into profits from customers who are already loyal. From CRM data and surveys to social media researchunderstand your clients and prospects and personalize any messaging to them. This is especially true of email marketing, which is still a powerful channel for customers and prospects alike.
Relationship marketing and the age of the customer go together like two peas in a pod.