Without question we have been and continue to be in changing times when it comes to the sales and marketing process within our businesses. More and more items and services can be and are being purchased online and not through the historic process of shopping through a physical plant or location. This movement then effects how every business establishes a footprint and markets itself.
Are we becoming a highly commoditized and transactional consumer versus one who has brand loyalty and, most importantly, places value on a personal relationship during the transaction and subsequent service?
Recently, I read two separate articles that paint this picture and apply to this article. The retailing giants of Target and Best Buy, to name a few, are experiencing difficulty with showrooming. This is a relatively new term that has to do with the consumer visiting their establishment to view a product category of interest, only to then head home to search the internet, only to make a purchase online where they find the best price. Granted these two behemoths have a major web presence but the cost of providing competition with a showroom obviously did not enter into the plans as stores were added in key markets. Target appears to be taking issue with the consumer, per the media, which historically does not work out too well.
Have we entered a world where relationship marketing is no longer valued? Have we excelled into a purely transactional process? I personally think not, but I don’t have the billions on the line these two firms mentioned above have either. So let’s take a look at where relationship marketing seems to currently apply and where it does not.
Relationship marketing may be more appropriate with the following services or products:
• Where the cost of switching brands, manufacturers, vendors or services is too high, thus giving value to a tight relationship or need for a source of knowledge and expertise.
• Large ticket heavy industrial & technical equipment products that have a long life and contribute uniquely to the creation of the purchaser’s process.
• High value products or services that are rare, unique, patented, trademarked and are not comparable to another source.
• Situations where the end user is involved in the creation, design or production phase.
• In the case where the consumer prefers and places value on a service relationship.
• Any other area where value is delivered first and there are not readily available generic commodities.
• Most importantly perhaps, an understanding that people consider your visible genuine passion as an organization. Remember, as Simon Sinek so eloquently educates us, people will add value to those who promote the why before they add value to the what, of your business model.
Areas where relationship marketing may have limitations and disadvantages:
• Consumer goods and products, primarily those available in mass, where brand is perceived quality is the main factor.
• Products and services of low value to the point they may even be considered a commodity.
• Items which have had a paten or copyright expire and now face generic replacement alternatives.
• Where the end user is not involved, nor do they desire to be involved, in the manufacturing or creation process.
• Situations where the customer prefers a single transaction to a relationship.
• Scenarios where the practicable switching costs are considered relatively low.
• Markets where the cost of supplying a valued relationship does not produce the needed gain or add significantly to the customer experience because of economic or competitive conditions that are market unique.
Relationship marketing has its benefits and appropriate strengths if we agree with the summary set forth above. Without question the consumer as a whole prefers to do business with people rather than in a cold faceless transaction. But only if the consumer feels the focus is on them and that value is being added first, and not as a smoke screen to the purchase. Customer satisfaction is no longer the pinnacle, and because of the above issues is often short lived. Customer loyalty and the consumer who becomes a product or service advocate are golden. Long-term customers may freely promote and give testimonial reference and are less likely to switch to competitors. Happier customers also lead to happier employees and engaged employees who are proud of what they represent are invaluable as they too become the quiet giant of the marketing movement. The overall competitive advantage then naturally has a much better basis for a completely integrated marketing, sales, service and quality approach.
Back in 2004, Sanjay Anand described an acronym for a move towards relationship marketing as AEIOU. Granted the year 2004, in terms of a marketing timeline, seems like an eternity and could be ripe with out of date concepts. But here they are still relevant if your product or service can sustain itself by adding perceived value through relationship marketing.
• Attention: Attract attention of potential customer. Differentiate your message with something that catches the prospects attention.
• Excitement: Get prospect excited about your messages. The message must be exciting for a prospect to want to read, watch or listen.
• Interest: Get prospect interested in your products/services. Appeal to your prospects needs and wants to get them interested in the wares.
• Order: Get qualified prospects to order at least something. This could be free and/or paid.
• Use: Teach or remind prospect to use the products/services. Both before as well as after the sale, provide details on how best to use your wares. This last step reduces unwanted surprises and also helps build an ongoing client relationship.
While this seems to be common sense, implementing a relationship marketing process, requires an objective analysis of where your product or service fits in the above broad categories. This reflection and number crunching process must result in a decision of payoff and not just an added expense. However, sometimes that payoff is not so easily quantified, as in the gain in employee engagement and customer loyalty.
Consider these steps in the process of relationship marketing:
• Map your process and delivery system, by setting standards for each segment, while paying particular attention to the points where a personal encounter with your customer and employee encounter each other.
• Document and identify areas where service and understanding of the customer are critical.
• Create or modify the process of measuring standards and communicating those minimum expectations throughout your organization.
• Enhance and value how the company communicates with the consumer and put yourself in their shoes. Most of us aren’t objective enough and yet have sources who we know tell you how they see it.
• Teach, train, lead and mentor employees on what good relationships are and how they add to your product or service to the point you have an engaged staff who understands their role completely.
• Monitor, reward and correct staff based upon your established service standards.
• Become active in the process beyond your desk so that the employees understand and visually appreciate the importance of this marketing philosophy.
Relationship marketing, unlike direct marketing, is about nurturing and gaining a customer. The ultimate goals, which will be different even within the departments of one organization, are noticeable when customers’ attitudes change in a positive direction. At least, that’s the idea. The problem with relationship marketing is that you can’t try too hard. The dangers of spamming, coming across false or fake, engaging in only one-way communication, or being too pushy have sunk many well intentioned relationship marketers.
And in today’s marketplace the ever more educated consumer may know that before your company does. Let us not forget that your company is ever present and accessible before your customer ever has to approach you in your facility.
Teach, train, lead and mentor in the open view of those who your company relies to do the relating and your pulse will throttle with the matching passion of your staff and love of your customer.
Are we becoming a highly commoditized and transactional consumer versus one who has brand loyalty and, most importantly, places value on a personal relationship during the transaction and subsequent service?
Recently, I read two separate articles that paint this picture and apply to this article. The retailing giants of Target and Best Buy, to name a few, are experiencing difficulty with showrooming. This is a relatively new term that has to do with the consumer visiting their establishment to view a product category of interest, only to then head home to search the internet, only to make a purchase online where they find the best price. Granted these two behemoths have a major web presence but the cost of providing competition with a showroom obviously did not enter into the plans as stores were added in key markets. Target appears to be taking issue with the consumer, per the media, which historically does not work out too well.
Have we entered a world where relationship marketing is no longer valued? Have we excelled into a purely transactional process? I personally think not, but I don’t have the billions on the line these two firms mentioned above have either. So let’s take a look at where relationship marketing seems to currently apply and where it does not.
Relationship marketing may be more appropriate with the following services or products:
• Where the cost of switching brands, manufacturers, vendors or services is too high, thus giving value to a tight relationship or need for a source of knowledge and expertise.
• Large ticket heavy industrial & technical equipment products that have a long life and contribute uniquely to the creation of the purchaser’s process.
• High value products or services that are rare, unique, patented, trademarked and are not comparable to another source.
• Situations where the end user is involved in the creation, design or production phase.
• In the case where the consumer prefers and places value on a service relationship.
• Any other area where value is delivered first and there are not readily available generic commodities.
• Most importantly perhaps, an understanding that people consider your visible genuine passion as an organization. Remember, as Simon Sinek so eloquently educates us, people will add value to those who promote the why before they add value to the what, of your business model.
Areas where relationship marketing may have limitations and disadvantages:
• Consumer goods and products, primarily those available in mass, where brand is perceived quality is the main factor.
• Products and services of low value to the point they may even be considered a commodity.
• Items which have had a paten or copyright expire and now face generic replacement alternatives.
• Where the end user is not involved, nor do they desire to be involved, in the manufacturing or creation process.
• Situations where the customer prefers a single transaction to a relationship.
• Scenarios where the practicable switching costs are considered relatively low.
• Markets where the cost of supplying a valued relationship does not produce the needed gain or add significantly to the customer experience because of economic or competitive conditions that are market unique.
Relationship marketing has its benefits and appropriate strengths if we agree with the summary set forth above. Without question the consumer as a whole prefers to do business with people rather than in a cold faceless transaction. But only if the consumer feels the focus is on them and that value is being added first, and not as a smoke screen to the purchase. Customer satisfaction is no longer the pinnacle, and because of the above issues is often short lived. Customer loyalty and the consumer who becomes a product or service advocate are golden. Long-term customers may freely promote and give testimonial reference and are less likely to switch to competitors. Happier customers also lead to happier employees and engaged employees who are proud of what they represent are invaluable as they too become the quiet giant of the marketing movement. The overall competitive advantage then naturally has a much better basis for a completely integrated marketing, sales, service and quality approach.
Back in 2004, Sanjay Anand described an acronym for a move towards relationship marketing as AEIOU. Granted the year 2004, in terms of a marketing timeline, seems like an eternity and could be ripe with out of date concepts. But here they are still relevant if your product or service can sustain itself by adding perceived value through relationship marketing.
• Attention: Attract attention of potential customer. Differentiate your message with something that catches the prospects attention.
• Excitement: Get prospect excited about your messages. The message must be exciting for a prospect to want to read, watch or listen.
• Interest: Get prospect interested in your products/services. Appeal to your prospects needs and wants to get them interested in the wares.
• Order: Get qualified prospects to order at least something. This could be free and/or paid.
• Use: Teach or remind prospect to use the products/services. Both before as well as after the sale, provide details on how best to use your wares. This last step reduces unwanted surprises and also helps build an ongoing client relationship.
While this seems to be common sense, implementing a relationship marketing process, requires an objective analysis of where your product or service fits in the above broad categories. This reflection and number crunching process must result in a decision of payoff and not just an added expense. However, sometimes that payoff is not so easily quantified, as in the gain in employee engagement and customer loyalty.
Consider these steps in the process of relationship marketing:
• Map your process and delivery system, by setting standards for each segment, while paying particular attention to the points where a personal encounter with your customer and employee encounter each other.
• Document and identify areas where service and understanding of the customer are critical.
• Create or modify the process of measuring standards and communicating those minimum expectations throughout your organization.
• Enhance and value how the company communicates with the consumer and put yourself in their shoes. Most of us aren’t objective enough and yet have sources who we know tell you how they see it.
• Teach, train, lead and mentor employees on what good relationships are and how they add to your product or service to the point you have an engaged staff who understands their role completely.
• Monitor, reward and correct staff based upon your established service standards.
• Become active in the process beyond your desk so that the employees understand and visually appreciate the importance of this marketing philosophy.
Relationship marketing, unlike direct marketing, is about nurturing and gaining a customer. The ultimate goals, which will be different even within the departments of one organization, are noticeable when customers’ attitudes change in a positive direction. At least, that’s the idea. The problem with relationship marketing is that you can’t try too hard. The dangers of spamming, coming across false or fake, engaging in only one-way communication, or being too pushy have sunk many well intentioned relationship marketers.
And in today’s marketplace the ever more educated consumer may know that before your company does. Let us not forget that your company is ever present and accessible before your customer ever has to approach you in your facility.
Teach, train, lead and mentor in the open view of those who your company relies to do the relating and your pulse will throttle with the matching passion of your staff and love of your customer.
