Relationship Marketing Strategy and implementation

Other parties involved in the value system might also be considered
as linked atomic clusters of customers, employees and investors,
with each element looking downstream at maximizing value for its
own immediate customers. Relationships with vendors (including
strategic alliances with vendors), and all other critical upstream
linkages in a value delivery system, can be viewed as customer rela-
tionships, because each vendor has the responsibility to create value
for their own customers. This implies that customers can behave in
a passive manner and that the reduction of system costs is primarily
the vendor’s responsibility. Such a stance may be justified in situa-
tions where most of the end customer value is created within the
organization, close to the customer interface, and where the organi-
zation is operating in a stable and predictable manner (e.g. such as
a fast-food restaurant or in some financial service situations). In
such circumstances a company may do very well by focusing on
service-related core competencies. Elsewhere, this narrow focus
could spell corporate suicide. Value creation is at the nub of the
matter here, value as perceived by the customer.
In sectors where much of the value for the customer is created

Relationship marketing: The six markets framework 21

Cost

Advantage Superior

Productivity

Profits

Surplus Cash

Reinvested

Compensation

Advantage

Superior

Customer

Value

The Right

New Customers

Customer

Loyalty

The Right

New Employees

Employee

Loyalty

The Right

New Investors

Investor

Loyalty

Growth

Figure 1.7 The loyalty-based cycle of growth.

Source: Reichheld (1996).^45