Relationship marketing Digital marketing >development RM theory >customer relationship management theory >Nature digital marketing >E-business/E- commerce > RM a result direct marketing 1) markerting
Relationship Marketing and Digital Marketing
Development of Relationship Marketing Theory
Relationship marketing is a form of marketing that focuses on customer retention and satisfaction, in comparison with other forms of marketing that focus on sales. This type of marketing is characterized by increased interest in the value that customer relationships can provide companies that cultivate long-term relationships with them through specialized communication strategies.
The development of relationship marketing is in accordance with technological developments. The expansion of online social networks provides great potential that can be exploited by companies that develop and implement relationship marketing strategies. The most frequently used strategies in relationship marketing are represented by inbound marketing efforts, public relations, social media, and others.
The need for relationship marketing is determined by markets characterized by numerous competitive products that address similar needs. In such situations, customers prefer to frequently purchase different brands. Customer loyalty is reduced in these cases. In order to improve customer retention, sellers focus on improving the purchasing process, by providing personalized customer experience. This helps them develop a relationship with customers and to be able to address them through other strategies than traditional marketing.
In addition to this, sellers are trying to use relationship marketing in order to improve customer satisfaction. In this case, sellers focus on developing relationship with existing customers rather than on investing in the effort to attract potential customers. The customer retention process is based on certain activities. The process is based on customer valuation that determines the value and category of each customer in order to determine where it is more profitable to invest.
The customer retention measurement activity is intended to determine the customer retention rate. In accordance with this rate, companies are able to compare and analyze certain products and customer segments. These activities allow companies to determine the strategies that can provide the most significant effects.
Most large companies address relationship marketing in their strategies. For example, Coca Cola, EBay, and Dell have developed marketing strategies that include relationship marketing techniques. They developed certain activities directed towards customers that are based on the characteristics of the local market and that focus on building a relationship with customers. This objective is reached through organizing different events, sponsoring sports or social events.
There are several models used by companies that address relationship marketing. Internal marketing is one of the most important models. It refers to developing relationships within the company with its employees, managers, and departments. This is intended to improve employee satisfaction, which leads to improved efficiency and productivity (Egan, 2008).
The six markets model is also used in relationship marketing strategies. The markets addressed by this model are represented by internal markets, supplier markets, recruitment markets, referral markets, influence markets, and customer markets. These markets required different strategies that the company must develop and implement.
Customer Relationship Management
Customer relationship management focuses on the customer. In other words, CRM is used in identifying customer segments, analyzing them in order to identify important characteristics, and using this information in order to improve their experience and relationship with the company. CRM is also used in identifying customers' needs and developing products and services able to satisfy these needs.
However, this requires organizational and strategic changes in the case of companies. This means that they should change their focus from the product to customers. In addition to this, the company must focus on providing products needed by customers, and not products that are in accordance with the company's traditional possibilities.
In order to develop successful CRM strategies, it is important to identify customers' needs. This can be achieved through questionnaires, research studies, and focus groups. There are significant differences between customers in different markets. Therefore, it is recommended to develop research programs in order to determine these different characteristics and address them with specialized strategies.
The development and implementation of CRM strategies is quite expensive. The cost of software and hardware required by CRM are significant. In addition to this, CRM specialists that develop plans for companies that require such strategies are expensive and their plans also require significant investments. There are also other costs associated with CRM strategies (Prasongsukarn, 2010).
There are several steps that must be followed in order to develop and implement successful CRM strategies. Therefore, it is important to establish the strategy design. Then, the company must analyze its business needs and information. The process is then evaluated in...
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