Building Customer Relationship “Service is so great an opportunity for the company that our vision for the next century is that GE is a global service company that also sells high quality product.” Jack Welch

Relationship Marketing Relationship marketing is a philosophy of doing business, a strategic orientation, that focuses on keeping and improving current customer rather than acquiring new customer. There has been a shift from a transaction to a relationship focus in marketing. customers become partners and the firm must make long term commitment to maintaining those relationship with quality, service and innovation.

Goals of relationship marketing To build and maintain a base of committed customers who are profitable for the organization. Customers goals of relationship marketing :getting customer, satisfying customers, and enhancing customers. Loyal customers can be even better customers

Benefits for customers and firms Confidence benefits Social benefits- social support benefit resulting from these relationship are important to consumer quality of life. Special Treatment Benefits

Benefits for the Organization Increased revenues Reduced marketing and administrative cost. Free advertising through word of mouth Employee retention

Factors that influence relationship Value Length of an average life time. Average revenue generated Sales of additional products and services over time Referral generated by customer over time. Cost associated with serving the customers

Foundations for relationship strategies Quality in the core service Market Segmentation and targeting. Continuous monitoring of relationship

Bases for market segmentation Demographic: Age sex family size, income, occupation, or religion. Geographic Psychographic: Bases on social class, lifestyle, or personality characteristics. Behavioral segmentation: based on knowledge, attitude, uses or responses to a service

Requirement for effective segmentation Measurability Accessibility Substantiality Action ability

Criteria for evaluating market segments for market targeting Segment size and growth-information on current rupees sales, projected growth sales, and expected profit margins. Segment structural attractiveness-current and potential competitors, substitute products and services, relative power of buyers and relative power of suppliers. Company's objectives and resources: Involves whether the segment fits the company objective.

Steps in market segmentation and targeting for services. Identify bases for segmenting the market Develop profiles of resulting segments Develop measures of segment attractiveness Select the target segments Ensure that segments are compatible

Monitoring relationship Basic market research in the form of annual customer relationship surveys for determining their perception on value received, quality, satisfaction with services and satisfaction with the provider relative to competitors.

The 80/20 Customer pyramid 20% of customer produce 80% of sales or profit. 20% of the best customer spends more with company over time, costs less to maintain, and spreads positive words of mouth’. 80% of the other customers cost the company in time, efforts, and money and yet does not provide the return the want

The expanded customer pyramid The platinum tier The Gold Tier The Iron Tier. The lead Tier

Levels of relationship strategy Level 1-Financial Bonds-volume and frequency rewards, bundling and cross selling, stable pricing Level II- Social Bonds-continuous relationship, personal relationship, social bond among customers. Level III- Customization Bond- Anticipation/innovation/mass customization, Customer intimacy Structural Bond-Integrated Information Systems, Joint Investments, shared process and equipment

CRM CRM deals with learning about the needs and behavior of customer in order to develop stronger relationships with them. It involves the use of technology to enable organizations to continue attracting new and profitable customers while forming tighter bond.

CRM involves various tools, technologies and business procedure to attract and retain customers, prospects and business partners- Contact Management Sales Force Automation Opportunity Management Relationship Management ERP (enterprise relationship management) is also a tool of CRM

CRM software is designed to help companies keep track of their customers and boost revenues. CRM is the process that helps bring together various pieces of information about customer, sales, marketing effectiveness and market trends.

CRM helps company provide Better customer service Make call centre more efficient Cross sell product more effectively Close deals faster Simplify marketing and sales process Find new customers and increase customer revenue

CRM software collect following information Responses to campaign Shipping and fulfillment dates Sales and purchase data Demographic data Shipping and fulfillment dates Account information Service and support records Web sales data

CRM helps companies to Gain better understanding of customer needs and build individual customer solutions. Establish a dialog with customers using internet. Improve marketing efforts by using readily accessible customer information link departments, giving them access to the same information updated in real time.