tomized and tailored offer. These customers present an opportunity
for classic retention strategies through loyalty schemes, reward pro-
grammes, retrospective discounts and by seeking to increase switch-
ing costs. Finally, the customers in the top left-hand box currently do
not justify a high level of tailoring of the product/service offer even
though they might respond positively to it. The challenge is to find
ways to enhance their profitability, either by cost-engineering the
value delivery system or by encouraging them to move towards
single-sourcing in situations where they split their purchases
between multiple suppliers.
Models and matrices like that shown in Figure 6.4 should not be
interpreted too rigidly. However, this one serves to make the point
that it is appropriate to have different types of relationship strategy
for different types of customer. Further situational variables that
will affect the choice of relationship strategy are such issues as the
uncertainty and volatility of the marketing environment,^8 the
degree of commoditization and hence price sensitivity of the market
and the magnitude of transaction costs. In particular, the choice of
relationship should be specifically influenced by the over-arching
business strategy adopted by the firm. In this ‘contingency’
approach to relationship marketing strategy, it is helpful to utilize
the three ‘generic’ business strategies identified by Treacy and
Wiersema:^9
● Operational excellence
● Product leadership
● Customer intimacy.
Treacy and Wiersema called these three routes to success ‘value dis-
ciplines’. Based upon their research, they suggested that market-
place success was usually based upon ‘what kind of value
proposition the companies pursued – best total cost, best product, or
best total solution’. They went on to say, ‘by operational excellence,
we mean providing customers with reliable products or services at
competitive prices, delivered with minimal difficulty or inconven-
ience. By product leadership, we mean providing products that con-
tinually redefine the state of the art. And by customer intimacy, we
mean selling the customer a total solution, not just a product or
service.’^9
Whilst these three ‘disciplines’ or ‘generic’ strategies should not
be assumed to be mutually exclusive, it will more often be the case
Creating and implementing relationship marketing strategies 415