Relationship Marketing Strategy and implementation

414 Relationship Marketing

quently ‘personalized’ – usually through last-minute configuration
from generic modules or subassemblies – the opportunities for one-
to-one marketing increase. Marketing communications can also be
tailored, particularly through direct mail and data-base marketing.
An increasing number of organizations are now seeking to create
dialogues with individual customers based upon a far more
detailed understanding of their lifestyles and life-cycle stage.
Bringing these two critical dimensions together – customer prof-
itability and value-adding opportunities – enables a simple matrix
to be constructed, as in Figure 6.4.
It suggests that high-intensity relationships should really be con-
fined to those customers with the highest profit potential who
actively seek customized solutions (the top right-hand quadrant).
Conversely, those customers with lower profit potential and where
the opportunity or the need for customization is less should be
served through low-cost ‘transactional’ marketing strategies. The
bottom right-hand box is interesting in that it represents those cus-
tomers who are amongst the top 20 per cent when it comes to profit
and yet where there are few opportunities for developing a cus-

HI

LO HI

LO

Customer profitability

(actual or potential)

Review and cost-

engineer the value

delivery process

One-to-one

tailored

relationships

Seek better

opportunities

elsewhere

Focus on loyalty

building

programmes

Opportunities

for value

adding

through

customization

Figure 6.4 What sort of relationships are appropriate?