In conventional efforts to improve the probability of retaining customers, many organisations have turned to the techniques and philosophy of relationship marketing. The focus of relationship marketing is on building bonds and ties between the organisation and its customers to improve feedback and ultimately enhance the prospects of customer loyalty.

 THE RELATIONSHIPWay back in 1995, Adrian Payne and Martin Christopher (not to be confused with Jamaica’s Christopher Martin) gave us a relationship marketing ladder consisting of six identifiable stages in relationship building: prospect, customer, client, supporter, advocate and partner.At the bottom of the ladder is the prospect, or the target customer. The initial emphasis will be to secure the prospect as a customer. To achieve this, marketing effort (and much of sales training) is concentrated on customer catching. Once the customer has been caught, however, the emphasis shifts to securing a longer-term, ongoing relationship.While a customer may be essentially nameless and may have done business with the company once or only occasionally, a client is more individual and does business on a repeat basis. Clients may, however, be ambivalent or neutral towards the supplier company.Relationship marketing seeks to convert clients into becoming supporters, those who have positive feelings towards the supplier, or even advocates (those who may actively recommend the supplier to others). The top rung of the ladder is a partner. At this level the supplier and the customer are working together for mutual benefit. The focus of relationship marketing is moving customers up the ladder, finding ways of enhancing the value that both parties get from the relationship. SUCCESSFUL CUSTOMER TARGETINGClearly, not all prospective customers will be equally worth the effort needed to move them up the ladder. Critical to a successful relationship marketing strategy is targeting customers of sufficient value (current or potential) to warrant the investment in creating a relationship with them. But how does your company handle this critical matter? Is there a process for determining which customers should be given special attention and which ones shouldn’t? Or do they simply state that a customer is a customer, so we should treat them all equally? And if you take the latter approach, aren’t you wasting resources on some people who will never climb above the second rung of the ladder? FOUNDATIONS OFThere are, broadly, three foundations of relationship marketing as follows:1. Sound reasons on both sides of the relationship:Fundamental to establishing a relationship is to determine what each party gets, or could get, from that relationship. Too many organisations still look primarily from their own perspective, recognising the value to them of customer retention or loyalty, but not thinking through clearly what value the customer will get from the deal that would motivate them to participate. In financial services, for example, attempts to create closer relationships with individual clients may have been naive in assuming the client will automatically see a value in having a ‘personal banker’.2. Mutual trust and respect:This may be difficult to achieve, because some of us have been battered by big multinational corporations for so long that a genuine attempt at offering higher customer value may be treated with some element of spuriousness. Hmm…can you think of any such firm in the Jamaican environment?3. Employee motivation and commitment:While companies may set strategies in the boardroom for relationship marketing, the success of those strategies ultimately rests with the employees who are charged with putting them into practice. Employees, from front-line sales staff through accounts personnel to car park attendants, need to understand their role in relationship building, be committed to it, and be motivated to achieve it. A COST OR AN INVESTMENT?So, is relationship marketing a cost or an investment at your company? Perhaps the first step in that discovery process is revisiting your marketing plan and asking two fundamental questions: What are our marketing objectives? And did we get the market segmentation and targeting right? For if you didn’t get these right, your relationship marketing efforts may be a high cost to your company rather than an excellent investment that has your CFO and CEO smiling. 

Herman Alvaranga FCIM, MBA, MISM, is president of the Caribbean School of Sales and Marketing (CSSM). E-mail hdalvaranga@cssm.edu.jm