Relationship Marketing Strategy and implementation

Creating and implementing relationship marketing strategies 413

tailored solutions for their own specific buying ‘problems’. In other
words, the customer and the supplier recognize the advantage to be
gained through closer relationships.
In business-to-business marketing, this collaboration will often
extend to strategic alliances and joint ventures. There will be a
recognition of the mutual benefits of linking each other’s value
chains, in sharing resources, knowledge bases and capabilities to
achieve agreed strategic goals. By definition, a high level of cus-
tomization will be involved in this type of relationship.
In consumer marketing, the opportunities for customization may
seem more constrained. However, in this era of what is sometimes
called ‘mass-customization’,^7 where standard products are subse-

A few important

customers make a

disproportionate

contribution to

profit

Cumulative

percentage

of profit

100

100

Smaller customers still

grow profitability

Many lower-profit customers

at least cover their costs

Several customers produce

a loss, even on a variable

cost basis

Cumulative percentage of customers

At this level of customers, the same profit

is generated with considerably less effort

At this level of customers, total profit

would be much higher than it is now

Figure 6.3 Some customers erode profitability.