valued by the customer. For businesses offering professional or
financial services, regularly replaced consumer durables such as
cars, and for many organizations involved in business to business
marketing, the long-term investment in building relationships with
individual customers is easily justified. Similarly, for manufacturers
of some low-priced consumer products with high frequency pur-
chase rates and easily identifiable target groups (e.g. some baby
products), the approach can readily prove its worth. Whether the
same can be proven to be an economic proposition for the market-
ing of mainstream fmcg (fast-moving consumer goods) products is
more questionable. Nevertheless, Swiss food giant Nestlé was
willing to spend millions of pounds on its Casa Buitoni Club, a data-
base-marketing driven initiative devised to bypass the influence of
the large retailers in the hope of raising customer loyalty towards
what is essentially a commodity product (see Case 2.1).
Referral markets
Referrals can be a decisive element in the creation of relationships
between an organization and its customers. The professional serv-
ices sector has always used informal networks and reciprocal refer-
rals to direct business towards established contacts. Word-of-mouth
recommendations are certainly known to be an important part of
the information search undertaken by consumers before buying
high value or high risk services.^29 Recommendations may also be
used by consumers as a convenient way of reducing choice between
many seemingly similar products or services.^30 Similarly, in situa-
tions where the product or service may be complex or difficult to
evaluate, customers will seek the advice of trusted third parties to
reduce the perceived risk associated with the purchase.
Given that satisfied customers will happily endorse the products or
services of the supplier if prompted, relationships with existing cus-
tomers are an unrecognized or underutilized facility for many organ-
izations. Noticeable exceptions are insurance broker Direct Line and
First Direct, the world’s first completely branchless cashless bank.
The former used them as the theme for a high profile and highly suc-
cessful advertising campaign. The latter makes much of its above
average customer satisfaction ratings by publicizing the fact that
around 30 per cent of would-be new customers approach the bank
following a personal recommendation from an existing customer.
Relationship marketing: The six markets framework 7