Sunday, May 11, 2008

From transactional to relationship marketing (MC, unit 4)

Transactional:
Disintegrated approach: marketing, customer services and quality were separate functions
Single sales oriented
Discontinuous customer contact
Focus on product features
Short timescale
Limited commitment to customer service or meeting customer expectations

Relationship:
Integrate approach - coordinated functions
Customer-oriented
Focus on customer value
Long timescale (long-term relationship achieving customer loyalty)
High commitment to customer service or meeting customer expectations

WHY?
Main reason is increasing efficiencies brought by retaining existing customers rather than focussing on acquiring new customers. High costs involved with continually needing to acquire new customers.
5% reduction in customer defections can improve profitability by more than 25%.
VALUE PROPOSITION
the sum total of benefits which a vendor promises that a customer will receive in return for payment
- must meet customer expectations
- the more you know about your customers, the closer you can be to closing delivering to their needs and closing the expectations gap
- defining the value proposition: establish core & peripheral values, decide how to deliver through channels tailored to customer needs

INTERNET
Helps loads. Easy, accurate and low-cost way to gather & analyse customer data. Can access an 'electronic footprint' of customer behaviour. But also makes comparison of the customer value proposition and the switching process much easier.

EXAMPLES
Examples: Tesco clubcard (add more)

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