Want to know who are the masters of relationship marketing? Check our hairdressers and barbers! They make full use of digital and personal communications and are great at customer retention. But what about corporate Jamaica? Does your insurance company, for example, still wait a whole year until when it is renewal time to contact you about your car insurance?

Do we really know?

Most Jamaican companies claim that relationship marketing is very important to their present and future business success. But when you ask management in these companies to define relationship marketing, each person seems to have a different response.

Among the answers are stories about their salespeople befriending customers and selling to them on the basis of instant friendships, taking people to lunch because that is where business decisions are made, meeting people at social events and so on.

Since it appears that not enough people in business seem to know what relationship marketing really is, let’s spend a few minutes looking at it.

THE PURPOSE OF A BUSINESS

It is now widely accepted that the purpose of a business is to create and sustain mutually beneficial relationships, especially with selected customers. Equally widely accepted is the view that the cement that binds these relationships is the two-way flow of value — that is, the customer enjoys real value from the relationship which converts into value for the company in the form of enhanced profitability.

FROM TRANSACTION TO RELATONSHIP

Marketers of a certain vintage, in thinking of the term ‘relationship marketing’ may recall the early work of Levitt (of marketing myopia fame) who in the 1980s argued that the real value of a relationship between a customer and a supplier occurred after the sale. He further argued that firms therefore needed to shift from the transactional focus of closing a sale to delivering superior customer satisfaction throughout the lifetime of the customer relationship.

And there was Berry, who in 1983 defined relationship marketing as ‘attracting, maintaining, and in multi-service organisations, enhancing customer relationships’. Berry also mentioned the need for internal marketing to support external marketing activities.

DEFINING RELATIONSHIP MARKETING

That was a long time ago, so let’s fast-forward 25 years to 2008 and listen to Christopher, Payne and Ballantyne — acknowledged experts in the discipline of relationship marketing.

‘The objective of relationship marketing is to turn new customers into regularly purchasing clients, and then to progressively move them through being strong supporters of the company and its products or services, and finally to being active and vocal advocates for the company, thus playing a role as a referral source.’

Christopher, Payne and Ballantyne further claim that relationship marketing embodies the following elements:

•Emphasis on a relationship, rather than a transactional approach to marketing

•Understanding the economics of customer retention and thus ensuring that the right amount of money and other resources are appropriately allocated between the two tasks of retaining and attracting customers

•Highlighting the critical role of internal marketing in achieving external marketing success

•Extending the principles of relationship marketing to a range of diverse market domains, not just customer markets

•Integrating quality, customer service and marketing

•Understanding that the traditional marketing mix elements of the 4Ps (product, place, price, promotion) do not adequately capture all the key elements which must be addressed in building and sustaining relationships with markets

•Ensuring that marketing is considered in a cross-functional context.

IS RELATIONSHIP MARKETING INTUITIVE?

Intuitive? It probably depends on your orientation. For who can forget Sam Walton of Walmart fame who, a long time ago recognising the need for customer relationships, told his staff: “There’s only one boss, and that’s the customer, for he can fire everybody, from the chairman down, simply by taking his business elsewhere.”

So back to our hair stylist or nail technician. They know exactly how much each customer is worth to them over a period of a quarter, a year, or 10 years. And if they don’t see you for a couple of weeks, you know they are going to call you in their sweetest voice. For they cannot afford to lose any customer whom they consider important to them.

Relationship marketing at its finest?

Herman D Alvaranga is president of the Caribbean School of Sales Management (CSSM), the region’s first specialist sales, marketing and brand management college. E-mail him at hdalvaranga@cssm.edu.jm