● Establish relationship drivers: If a relationship strategy is feasible, what
are the key components driving success? Market research techniques
facilitate an understanding of what is important to building/maintain-
ing relationships. By identifying how customer expectations are set and
evaluated, organisations are more able to generate positive inter-
actions. For example, if it is found that key customer service attributes
are; accurate order processing and delivery time as per agreed sched-
ule, it is possible to allocate resources to ensure such expectations are
met (or hopefully exceeded).
● Build customer value: Businesses need to adopt a value-building
approach to relationships. There are three basic approaches to generat-
ing customer value. Firstly there are financial benefits, where the rela-
tionship has some economic benefit to the customer. For example,
Tesco was the first major supermarket chain to introduce a customer
loyalty scheme. ‘Tesco Clubcard’ points can be exchanged for goods or
discounts. The firm now plans to enhance the scheme by creating three
classes of loyalty points – gold, silver and bronze – with higher spend-
ing customers receiving bigger awards. Secondly, there are social bene-
fits. Here, relationships are based on social contact, belonging, support
and personal interaction. For example, friendly relationships with
clients may provide the basis of a hair-dressing business. Brand loy-
alty may also be based on this concept. In the fashion market, people
adopt brands as a symbol of lifestyle and group identity. Thirdly, struc-
tural benefitsstem from close operational association. For instance,
manufactures and retailers could implement automated stock con-
trol/replenishment to facilate a ‘just-in-time’ approach to inventory
management.
● Retention: It is a normal fact of business life that long-established cus-
tomers tend to be more profitable than new or occasional customers.
They tend to be larger, more frequent consumers and major sources of
referral business. Therefore, organisations need to not only measure
retention, but also to guarantee all employees are aware of its import-
ance. The ideas outlined above all have a role to play in retaining cus-
tomers, but organisations must actively seek to strengthen on-going
business relationships. Common methods include: corporate hospital-
ity, sending referral business to customers and briefing clients on new
developments. A key step in many retention programmes is to estab-
lish a relationship management structure within the organisation. This
involves: (i) identifying which customers (or customer groups) merit
special attention, (ii) assigning account/relationship managers to
develop and implement a relationship plan. Such a plan requires spe-
cific objectives and strategies aimed at enhancing the organisation’s
business position with that target group.‘Amazon’ – the Internet book shop – offers a practical illustration of rela-
tionship marketing. Obviously, as a virtual book shop Amazon has no
direct, face-to-face contact with its customers. However, its website allows
customers to write book reviews, read what others thought of a given text238 Strategic Marketing: Planning and Control