Explain the importance of customer service and quality in relationship marketing:
In order for an organisation to retain and have loyal long term customers they have to make sure that their customer service (people and processes) are good and effective and also efficient, they also have to make sure that all their products, place, promotion , physical evidence etc are up to a good quality for the customers
Explain the difference between transactional marketing and relationship marketing:
Transactional marketing is when a customer purchases a product/ service that an organisation offers, in transactional marketing there is very minimal communication per sale as they advertise to all this is short term relationship. Relationship marketing includes a customer purchasing products/ services that an organisation offers but they keep in contact in order to retain the customer this is done through knowing the customers buying habits through loyalty cards, they also communicate to customers through emails, telephone calls etc
Explain the difficulty of attracting new customers:
It is very difficult for customers to leave their current organisation in order to go to another, the only way that a organisation is able to attract new customers is unless you are offering a better offer than their current supermarket, such as a better product, price, place and promotion than their current supermarket. It is also very costly/ hard for the organisation as many organisations spend 80% of their budget on attracting new customers, only 20% of those who are attracted spend at the organisation
Explain the cost of lost customers:
It is very costly for the organisation to lose customers, especially the loyal customers are those are the 20% that create 80% of the revenue for the supermarket. Loosing loyal customers will also be very impacted on the organisations profits as they spend a large amount of their money in the supermarket, by losing them the organisation will have to try even harder and spend even more in order to get that customer back, it is very hard to do so and very costly. Loosing not so very loyal customer will not be impacted on the organisation as they don’t spend large amount of their income in the supermarket and they only spend when your prices are lower/ better promotions. But organisations should try to make those customers come back in order to make them a loyal customer
Explain the how lifetime value of customers might be measured:
Everyone has the potential to become a lifetime partner, you just don’t know who they will be. The lifetime of customers will be measured by how often and how much a customer spends at the organisations. They can also be measured through their buying behaviour and how interactive the customer is with the organisation, if the customer has a loyalty card, if the customer has a mobile contract with the organisation etc. due to lifetime customer organisations achieve increase sales, profit and recommendation, lifetime customers also tend to spend 33% more and they also tend to spend more often
Outline how relationship marketing links with an organisations missions and objectives, connect with an organisation strategic aims and objectives and forms of stakeholders needs and expectations:
Relationship marketing should link very closely with the organisations mission and aims, as one of the organisation strategic aims and objective will be satisfying the stakeholders needs and objectives. The organisation will try to meet the need and expectations the customers through adapting the organisations services and products as much as they can based upon the feedback they receive from their customers, they will try to achieve this because their main stakeholders are their customers because they are those people who spend their money at the organisation. The organisations will try to exceed their expectations through giving them offers, customer service and quality that others are unable to offer and in return the organisation will attract, retain lifetime partners. The needs and expectations of customers are competitive prices and good quality customer service
Outline the growth of the service sector:
The service sector includes business to customer/ business, this is part of the tertiary sector. The growth of the service sector has increased in the UK in the past 40 years, customer will buy a product from a supermarket if they like the product but not the service you offer, but by describing the service and not going that extra mile won’t guarantee that customer will be interested in purchasing the service this is because a product a customer is able to hold and see but a service a customer can’t hold or see, and if you don’t offer customer or advertise the service correctly the customer may choose a variation to your service
Explain the role of information communication technologies in direct marketing and e-business:
Information technology plays a massive role in direct marketing and also e-business as they help provide personal offers and people are now able to use the internet in order to order products and services, IT also help the organisation create revenue as customer that are bed bound or disabled or just dislike shopping (lazy/ busy) are able to purchase products and services from the comfort of their home. IT can also be used to market products and services directly to customers, organisation are also able to respond to customer buying habits through marketing products that are helping to build more personalised communications
Explain how direct marketing and e-business has grown in both business to business markets and business to consumer markets:
Internet has enabled e-business which is marketing and promoting offers to customers through email etc. the internet has enabled direct marketing which is marketing products directly to customers. Direct marketing and e-business has grown massively in business to business/consumer market business are now able to promote directly to customers opposed to 20 years ago, business are now able to launch and also promote their products directly and follow ups by the interested business can be made through the use of IT, this has led to decrease in cost of having a person directly promoting the product to business individually and wasting resources such as hotel and food expenses. By a sales team directly marketing their product to a supermarket once they are able to show their pitch and leave, the supermarket can then use the internet to follow up on the product, through this the promotion team don’t have to keep and coming back in order to achieve sales, they don’t even need to take orders as they can be made directly, i.e. online or phone
Conclusion:
This report has explained how relationship marketing has developed along with outlining the importance of customer service and quality in building relationship with consumer the difficulty of attracting new customer was explained as the cost of lost customers. The benefits of building of long term relationships of mutual advantage with customers are that those customers not only buy more but buy more often and actively and positively promote the business to others all of which result in higher revenue and profits