MARKETING 43.
Relationship marketing
A key goal of modern marketing is to build deep, lasting relationships with individuals and organizations that play a critical role in the success of a company’s marketing efforts. Relationship marketing seeks to cultivate mutually satisfying, long-term connections with key stakeholders to earn and retain their business.
The four primary stakeholders in relationship marketing include:
- Customers
- Employees
- Marketing Partners (such as channels, suppliers, distributors, agencies)
- Members of the Financial Community (shareholders, investors, analysts)
Marketers must strive to create value for all these stakeholders and balance the returns among them. Developing strong relationships requires understanding their capabilities, needs, goals, and desires. The ultimate outcome of relationship marketing is a unique asset known as the marketing network, comprising the company and its key stakeholders—customers, employees, suppliers, distributors, retailers, and others—with whom it has formed mutually profitable business relationships. The fundamental principle is clear: build effective networks, and profits will follow.
As a result, many companies are shifting focus from owning physical assets to owning brands and subcontracting non-core activities to partners who can perform them more effectively and efficiently.
Companies are also tailoring their offerings, services, and messages to individual customers based on data such as transaction history, demographics, psychographics, and media preferences. By focusing on their most valuable customers, products, and channels, firms aim to foster customer loyalty and achieve profitable growth, capturing a larger share of each customer’s expenditures. They estimate the customer lifetime value and design their offerings and pricing strategies to ensure profitability over the customer’s lifetime.
Effective Customer Relationship Management (CRM) and Partner Relationship Management (PRM) are crucial. Firms are deepening relationships with key partners, such as suppliers and distributors, recognizing them as essential contributors to delivering customer value.
IBM: A Case Study in Relationship Marketing
IBM, a pioneer in the technology industry, has built a reputation for maintaining long-term customer relationships. Celebrating its 100th anniversary in 2011, IBM has consistently adapted and evolved its business focus—from mainframes to PCs to cloud computing, big data, and IT services. Part of IBM’s success lies in its well-trained sales and service teams, which stay close to customers, fully understanding their needs.
IBM has even engaged in co-creation with customers, contributing to innovative solutions. For example, IBM worked with the state of New York to develop a method for detecting tax evasion, saving taxpayers $1.6 billion over a seven-year period. As renowned Harvard Business School professor Rosabeth Moss Kanter noted, “IBM is not a technology company but a company solving problems using technology.”
