How relationship marketing has developed

Lifetime customers is a crucial benefit for all businesses and there are reasons why that is, some of the reasons for that are:

• Businesses can rely on Lifetime customers to boost their profits and sales because Lifetime customers make up about 80% of sales from a business
• Lifetime customers help a business grow further and expand
• Lifetime customers also promote the name of business further by telling their friends or relatives how great the business is

Importance of the functions of customer services and quality in relationship marketing

In relationship marketing, it is really important to have and emphasise on quality and customers services because these two things are what differentiates relationship marketing from transactional marketing. They add the essential thin that pleases the customers, get them satisfied and keep them coming back for more. Without these two things a business will only be able to offer transactional marketing instead of relationship marketing.

Cost of lost customers

The average company loses between 10% and 30% of its customers each year. This is costly to businesses because that one customer for example, could badly advertise other customers about the business which will make the company lose even more customers. The loss of customers could also lead the business to poor performance which will in turn lead the business make less profit and benefits.

Lifetime value of customers

Lifetime customers make up about 80% of sales from a business and they also make about 20% of the overall customers a business has so therefore any business to prosper, they ought to gain customers, build a good relation with them and retain these lifetime customers.

Some businesses spend 80% of their marketing budgets on gaining new customers, rather than nurturing existing ones. They should aim on retaining also all their general customers they already have because according to statistics, it cost 5 times more to attract new customers than to keep an existing one therefore they should concentrate more on satisfying the one they already have to avoid losing them. Existing customers spend 33% more than new customers therefore businesses should encourage them to stay.

Link with organisational mission and objectives  

In order for businesses to easily attract new customers, they should plant relationship marketing at the heart of their business values because it helps attract customers and leads them to believe that the business really does care about them. Even though not all customers are aware of Tesco’s values, is the link they have chosen to promote their missions and objectives.

Stakeholders’ needs and expectation

Customers in general no matter whether they are old or new, they all expect good customer service, good quality products and satisfaction from every business. Basically, they all want the 7 ps from the business.

Growth of services sector

Offering good quality product could be transactional marketing and good customer services could be relationship marketing. Transactional marketing is all about the price, a good sold at a fair price will result in transactional marketing but it is also the same thing customers would expect from any business. On the other hand, good customer services like a good and helpful member of staff who knows what he/she is doing and is happy to help customers is classed relationship marketing, but this alone isn’t what offers satisfaction. In order for relationship marketing to be complete, other things such as the 4p’s for example must be added to it. All of these factors are what really make relationship marketing work efficiently.

Role of information and communication technologies

ICT has enabled businesses to better engage in direct marketing with customers because when we, the customers buy something online, the website from where we did our shopping collects our information about our taste of products and what kind of products we like to buy. That information is then used to provide us with products that will suit our needs because the business now has a better picture of our shopping taste and habits. They can send direct emails with personalised offers based on the information and CRM data from club cards for example. Technologies have really helped businesses development in recent years because everyone uses the internet nowadays and this makes it much easier for them to attract new customers.

In business to customers, ICT is used to contact customers by sending them emails to try and maintain the relationship whereas in b2b, it’s more about writing letters and phone calls where businesses contact their business customers to make sure they are still interested in their mutual relationship.

Conclusion

Having outlined how relationship marketing has developed and why this happened overall, I have described importance of the functions of customer services and quality in relationship marketing within accompany. I have also role of information and communication technologies.