Relationship marketing and customer retention pdf to jpg

relationship marketing and customer retention pdf to jpg

Relationship marketing has proven itself to be an indispensable part of doing Finnair, relationship marketing, airline industry, customer retention, customer. Effects of Relationship marketing to customer satisfaction. .. relationship marketing that banks use to attract and retain customers? What are the effects of, retrieved on 16th February BOA ( ). Cooper ,D.R and. Customer Satisfaction can provide you with major competitive advantages, which can directly lead to increase in profitability and growth. They are: Repeat.

Some of them are not compatible with mission of the company due to the changes in their needs and behaviors.

relationship marketing and customer retention pdf to jpg

Therefore cost of keeping relationships is higher than the profit which is gained from these customers. Thus the companies must reevaluate their investment on customers and 2 close unsuccessful relationships. Most of companies are trying to find the best relationship marketing strategies to increase the loyalty of customers. Relationship marketing is in high popularity Palmatier et al. Relationship Marketing refers to marketing actions to implement, develop and maintain prosperous relational exchanges in business Morgan and Hunt,p This paper concentrates on the impact of relationship marketing strategies on customer retention behavior.

Bloemer and and Odekerken - Schroder examined the relationship between social belongingness need and customer behavior in beauty salons. They suggested a model about the direct impact of social belongingness need and customer tendency of relationship on behavioral results including Word-of-mouth marketing WOMMprice sensitivity and repurchasing.

This model had three parts; first part included personality features, social belongingness and relationship tendency, second part included WOMM, price sensitivity and repurchasing and third part studied customer situation after committed relationship and trust.

Results showed higher level of social belongingness need and higher customer tendency for relationship increase WOMM, price sensitivity and repurchasing.

relationship marketing and customer retention pdf to jpg

Bejouet al studied the effect of relationship satisfaction on relationship commitment based on marketing mix. They explain all marketing tools are based on marketing mix and they have positive effect on relationship satisfaction. They explain when a customer has satisfaction of product, promotion, price and placement distributionit is likely that there is satisfaction of relationship between customer and seller.

The Impact of Relationship Marketing Strategies on Customer Retention - PDF

The results showed there are positive relationships between product, price and placement satisfaction and relationship satisfaction. G studied Instrumental and Interpersonal Determinants of relationship satisfaction. Instrumental variables were product, distribution costs and marketing communications that all companies need to use them in their marketing mix.

Interpersonal variables were credit, benevolence and opportunism. The reason of choosing these variables is to evaluate different aspects of trust as a multi-dimension concept and its important role in maintenance and development of long term 3 relationship with customers and supplies.

Results clarified that there are positive relationship between instrumental variables product, price and distribution satisfaction and relationship satisfaction; also there are positive relationship between interpersonal variables credit, benevolence and opportunism and relationship commitment. One of the main outcomes of strong relationship between buyer and seller is customer retention Crosby et al. Cost saving and increasing profitability has priority for all businesses and customer retention can be considered as a key element to achieve these goals.

Many studies and available evidences have shown existing customers are more profitable in compare with establishing relationship with new ones O Connell and Keenan,; Reichheld and Sasser, ; Jones and Sasser, Thus applying strategies that have positive impacts on customer relationship and customer retention can be one of the best tactics to achieve the highest potential of customer profitability. The effect of relationship marketing strategies on customer retention It is an accepted concept that ability to expand loyal customers and maintain the existing ones is determined as a critical factor for long-term success of organizations Slater, ; Kandamully and Duddy, Successful Relationship marketing has important outcomes for retailers and service providers due to increase in loyalty and satisfaction such as: The importance of developing customer relationship increase when retailers and service providers consider the fact that attracting new customers is more costly than keeping existing ones Harley,also existing customers have higher rate of purchase than new ones Weiser, ; James S.

Barksdale Jr and Julie T, Relationship marketing is defined as a form of marketing that companies try to maintain and improve close relationship with customers. Relationship marketing endeavor to implement the relationship which was existed in old years between retailers and customers.

There are many strategies in the concept of relationship marketing that can be used to improve the strength of connection between 4 customer and retailer. The forms of applying these strategies are different and depend on the nature of businesses but the result is increase in customer retention and repurchasing. These strategies are categorized in communication, preferential treatment, personalization, rewarding and trust in this study.

Communication Communication has a vital role for connecting retailers and customers Mohr and Nevin, and initiate customer trust Ring and Van De Ven, Communication is a conscious or unconscious process of transferring feelings and opinions in form of message which is sent, received and perceived Mohammad Arabi and DavoodIzadi, Communication is defined as advertisement, sales force face to face connections, public Relation, packaging and any form that company send its products to external environment.

Communications are trying to teach customers something about products, persuade customers to search for product information, increase customer satisfaction and loyalty.

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Macintoth suggests a company without effective sales forces with strong communication does not have any chance to enhance the relationship with customers and persuade them for repurchasing Macintosh et al. Therefore communication is an important strategy to establish relationship with new customers and improve connection with existing customers Singh and Sirdeshmukh, There is a positive relationship between communication strategy and customer retention.

Preferential Treatment Preferential treatment concept concentrates on selected customers and gives them higher social recognition and offers products above the standard value and services beyond regular practices Lacey et al. In this study Preferential Treatment means customer perception about the level of higher services that retailers and service providers give to loyal customers Smith and Taylor, It is a marketing fact that customers are not equal and they must be separated based on their profitability for the company Parviz Dargi, Sometimes cost of maintaining some customers is higher than the profit which is gained from them.

Therefore companies need to reevaluate their investments on customers and finish unprofitable relationships. In other hand applying preferential treatment can improve the quality of services Chien-Ta Bruce Ho and Wen-Chuan Lin, with loyal customers and this treatment develops the level of customer retention.

There is a positive relationship between preferential treatment strategy and customer retention. Personalization Personalization marketing refers to adjustment and modification on products and services based on additional information from customers Jari Vesanen, ; Anyuan Shenand A. This strategy enhances the relationship between retailers and customer Chia-Yu Lin and E.

Companies also use IT applications to personalize services and products Ansari and Mela, ; Winer, to establish long term and more personal relationships with valuable customers Anyuan Shenand A.

Customers have different desires for personalization Bettencourt and Gwinner, In this study personalization means how warm and since reloyal customers are treated by salespersons in retailer.

CRM (Customer Relationship Management) -

There is a positive relationship between personalization strategy and customer retention. Rewarding Rewarding defined as an incentive strategy for products, distributer or end customer that immediate sales is its primary goal Belch, Rewarding is a promotion tool in sales process. Promotion is an acceleration tool to maximize sales to customers who are not persuaded by advertisement.

Companies should be able to monitor the growth potential of the market, sector or individual customers and be able to effectively set the correct marketing activity or communication. Who are our customers and how to approach them? The company can have 5 or even 20 million. In each of these cases it must naturally proceed otherwise. It will have a different marketing strategy.

It will act in different ways with its customers. It will act differently if it will be the business customers B2B or if customers will be people, consumers B2C. Crucial is also how big turnover every customer makes. Consequently, the company takes efforts and individual attention.

In a small number of customers who make us large amounts of turnover, we have to access each of them completely individually, mostly with a personal conduct. In contrast, if we have millions of small customers, we have to handle them in a completely different way.

We must be able to classify, segment and target.

  • CRM (Customer Relationship Management)

Such a mass market does not allow always personal conduct, but that does not mean that it is not possible to access customers individually and friendly. In the mass market we can operate to our customers by completely different means and methods. Due to the strong development of the Internet and social networks of all kinds, companies have a lot more options to meet their customers in the mass market and, on the other hand, the Internet can provide a lot of information about the behavior and preferences of customers.

Anyway, it is necessary to take into account the differences in the needs of different customer segments and choose an appropriate strategy for a particular segment. Sometimes it is appropriate addressing of using telephone campaigns elsewhere, it is better to use traditional media such as television.

The dialogue and highest possible customer interaction is a current trend in the very competitive market. Basic processes of customer relationship management Marketing promotion processes and finding opportunities Their main aim is to achieve positive influence on customer throughout its lifecycle. From the first awareness of brand to maintenance of long-term relationship and loyalty. Marketing uses various communication channels e. TV, radio, websites, e-mails, postal mail, which we combine to make us able to let customers know of our existence, the existence of our brands or to constantly improve their positive perception and to provide interaction.

Marketing processes include addressing of market, of potential customers, specific new customers and effect on the present ones. Typically, the communication is divided into marketing campaigns planning, design, implementation, evaluation. Sales and business processes Business processes are closely linked to marketing processes. Their main objective is to sell products or services to potential customers and clients.

They include everything from business proposals to enter into a contractual relationship, ensuring the performance after sales service.

The Impact of Relationship Marketing Strategies on Customer Retention

They include a comprehensive dialogue with a particular customer from obtaining, a confirmation of contractual documents through implementation of the performance, and the care and resale. Just in business processes there is one of the focal points of building long-term customer relationship.

Another important pillar is in the after-sales service and communication. For products, of course, there is not only about their quality and price, the customer decides on the design, taste, image, and fashion trends. For services, the situation is more complicated, but on both it is applied a great importance of additional services see Kano model.

After-sales services and customer communication It is actually the beginning of the beginning. Or quite the opposite - in poor after-sales services and improper or poor quality care we can lose a customer, who has been very satisfied with our product. After-sales service and care are part of the ability to deliver and manage additional services to the main product promotion, financing, transportation and logistics, convenient payment, etc. They become the main competitive differences.

What the customer relationship management actually is It is all marketing, sales and after-sales processes together. It is acquiring new customers. It is effective communication with customers through multiple communication channels. It is an individual approach to customers. It is building loyalty, trust and respect. Trust is a very important part of building a long-term relationship between the company and its customers.

In a competitive environment where it is increasingly difficult to meet customer requirements, additional services and trust are just the ones that are the decisive factors in the competition. In practice, customer relationship management differs if the customers are companies so called B2B or if the customer is a consumer so called B2C.