Relationship Marketing vs Selling – Pam Ivey International
Definition of relationship selling: The marketing process that involves having sales staff form well established associations with consumers in order to promote . Relationship marketing was first defined as a form of marketing developed from direct response These predicted offerings can then be shown to the customer through cross-sell, email recommendation and other channels. Relationship. RELATIONSHIP MARKETING and RELATIONSHIP SELLING (Your first-ever Business e-Coach): In today's customer-driven economy, corporations must move.
Customer retention efforts involve considerations such as the following: Customer valuation — Gordon describes how to value customers and categorize them according to their financial and strategic value so that companies can decide where to invest for deeper relationships and which relationships need to be served differently or even terminated. Customer retention measurement — Dawkins and Reichheld calculated a company's "customer retention rate".
This is simply the percentage of customers at the beginning of the year that are still customers by the end of the year. This ratio can be used to make comparisons between products, between market segments, and over time. Determine reasons for defection — Look for the root causes, not mere symptoms.
Relationship Marketing | What is Relationship Marketing?
This involves probing for details when talking to former customers. Other techniques include the analysis of customers' complaints and competitive benchmarking see competitor analysis. Develop and implement a corrective plan — This could involve actions to improve employee practices, using benchmarking to determine best corrective practices, visible endorsement of top management, adjustments to the company's reward and recognition systems, and the use of "recovery teams" to eliminate the causes of defections.
A technique to calculate the value to a firm of a sustained customer relationship has been developed. This calculation is typically called customer lifetime value. Retention strategies may also include building barriers to customer switching. This can be done by product bundling combining several products or services into one "package" and offering them at a single pricecross-selling selling related products to current customerscross promotions giving discounts or other promotional incentives to purchasers of related productsloyalty programs giving incentives for frequent purchasesincreasing switching costs adding termination costs, such as mortgage termination feesand integrating computer systems of multiple organizations primarily in industrial marketing.
Many relationship marketers use a team-based approach. The rationale is that the more points of contact between the organization and customer, the stronger will be the bond, and the more secure the relationship. Application[ edit ] Relationship marketing and traditional or transactional marketing are not mutually exclusive and there is no need for a conflict between them.
In practice, a relationship-oriented marketer still has choices, depending on the situation. Most firms blend the two approaches to match their portfolio of products and services. It is claimed that many of the relationship marketing attributes like collaboration, loyalty and trust determine what "internal customers" say and do. According to this theory, every employee, team, or department in the company is simultaneously a supplier and a customer of services and products.
An employee obtains a service at a point in the value chain and then provides a service to another employee further along the value chain. If internal marketing is effective, every employee will both provide and receive exceptional service from and to other employees.
It also helps employees understand the significance of their roles and how their roles relate to others'. If implemented well, it can also encourage every employee to see the process in terms of the customer's perception of value added, and the organization's strategic mission. Further it is claimed that an effective internal marketing program is a prerequisite for effective external marketing efforts.
The Business Case for Building Real Relationships with Customers
Referral marketing is developing and implementing a marketing plan to stimulate referrals. Although it may take months before you see the effect of referral marketing, this is often the most effective part of an overall marketing plan and the best use of resources[ citation needed ]. Marketing to suppliers is aimed at ensuring a long-term conflict-free relationship in which all parties understand each other's needs and exceed each other's expectations. Such a strategy can reduce costs and improve quality.
Influence markets involve a wide range of sub-markets including: It should not be viewed as a traditional marketing expense since the returns for evergreen content will last as long as the thoughts stay relevant. But content and relationship marketing as a whole go far beyond acquisition. Using content as a form of support is also marketing.
Free resources, help documentation and webinars can marketing to customers as long as the content is educational, enjoyable, and motivational. Social media marketing If you can get past the hype, social media can truly be a useful channel for creating relationships with customers. As an example, see how FedEx has used social media to build trust and prestige with customers and to successfully resolve issues: Mostly in a matter of minutes. Their Twitter account has become one of the most popular online corporate accounts.
Building relationships through social media is about knowing your customers and creating a social media presence that reflects what they want to see from you. Email marketing "Email is still one of the most powerful relationship marketing mediums, as it is just so personal.
Incorporate this channel by delivering free course content and product updates via email.Transactional Selling vs Relationship Selling
Having a clear, distraction-free channel to notify customers of these offerings is how you can elicit responses like this: This may become a weekly tweet. Consistently amazed by the fantastic free resources helpscout emails.
The more you demonstrate your specific understanding of their problems, concerns and aspirations, the more quickly they'll buy from you, often without really understanding what you are selling.
Sell High When you sell high in customer organizations the close rates are higher, and sales cycles are shorter. Besides, there are no "surprise" decision makers at the point of close. Modern Customer-based Relationship Approach "Anyone who views a sale as a transaction is going to be toast down the line.
Selling is not about peddling a product. It's about wrapping that product in a service — and selling both the product and the service as an experience.
This approach to selling helps create a vital element in the process: