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Let us Understand Customers Better
The host of strategies are devised through proper understanding of current competition, customer expectation, environmental scanning, better technology, service, advertising medias and so on. Customer feedback and company response to it is inevitable and prominent for better relationship building. More are the customer needs overlapping with the value offered, stronger would be the higher nexus between them. They must be encouraged for co-creation & leveraging higher business value. A strong network must be built through co-operation and collaboration. Customer culture must be studied in depth to understand the preferences.
Products and services must be reconfigured after understanding product limitations of the old customers – to give the best possible solution in future. This feedback is much useful and essential to keep the product line with best conglomerates of available products. There is a need of multilevel access of customers through techno savvy communication tools. Customers also are willing and curious about new product range with better features & other functionalities offered. They are eager to develop active rapport with a verve and vigor.
Consistent endeavors are to be effected to convert ‘core product’ into ‘augmented product’ leading finally exploring in depth towards ‘future product’. Still some scholars condemn product focus approach against customer focused approach. Voice of customer has to be infallibly acknowledged by marketers. Doing research to know mind of customer is an valuable strategy. Customer and brands are having mutual value through strongly bonding through: whether customers ‘own’ the brand or brand ‘fit in’ to them. Customer value leads to customer ownership though strong cohesive emotional bondage. The Return on investment (ROI) is being replaced by Return on relationships (ROR).
Customers as Friends
Many authors indicate that customer relationships are more than just commercial transactions (Butcher, Sparks, and O’Callaghan 2002). In fact, customer relationships are similar to the relationships that exist between friends. It is therefore important for marketers to understand the nature of these relationships (ibid.). From a selling perspective, the literature implies that good customer relationships over an extended period develop into close friendships (e.g., Price & Arnould, 1999; Swan et al., 2001; Heide & Wathne, 2006; Grayson, 2007). According to Swan et al. (2001), the categorization of customers as friends gives insights into how to manage these relationships effectively. Salespeople and others are often encouraged to treat customers like best friends (Geller, 2006) and focus on building friendships instead of transactions (Tan & Steinberg, 2007).
Customer retention
It is extremely important to satisfy the needs of target customers. As a company’s sales come from two groups: new customers and repeat customers. One estimate is that attracting a new customer can cost five times as much as pleasing an existing one. And it might cost 16 times as much to bring the new customer to the same level of profitability as that of the lost customer. Customer retention is thus more important than customer attraction.
Customer retention prominently is signified as an issue of strategic importance. There are at least two reasons for this.
- Loyal customers are more profitable than newly acquired customers (Webster, 1994).
- Retaining customers through close, long-term, cooperative relationships can impart a competitive advantage to the supplier (Weitz & Bradford, 1999, p. 256).
Customers increasingly expect higher quality and service and some customization. They perceive fewer real product differences and show less brand loyalty. They can obtain extensive product information from the Internet and other sources, permitting them to shop more intelligently. They are showing greater price sensitivity in their search for value. Understanding consumer behavior is never simple, because customers may say one thing but do another. They may not be in touch with their deeper motivations, and they may respond to influences and change their minds at the last minute. Still, all marketers can profit from understanding how and why consumers buy.
In fact, not understanding customer’s motivations, needs, and preferences can lead to major mistakes. Successful marketers use both rigorous scientific procedures and more intuitive methods to study customers and uncover clues for developing new products, product features, prices, channels, messages, and other marketing- mix elements. Both marketing and environmental stimuli enter the buyer’s consciousness. In turn, the buyer’s characteristics and decision process lead to certain purchase decisions. The marketer’s task is to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the buyer’s purchase decisions. The main tenet of relationship marketing is that a relationship consisting of repeated purchases must be established before a customer becomes profitable (Gronroos, 1990).
Product orientation to customer orientation
Relationship marketing has undergone through an enormous shift from product orientation to customer orientation. The business giants have led unto a long-term stakeholder focus as their ‘customers’ and other important influence markets. By creating these relationships, companies are amplifying their views into the different market’s needs and wants. The customers should be served at their best through insight of the retaining them. In this perspective, marketing is no longer simply about product or service development, selling, and delivering (Buttle, 1996).
Moreover, the exclusive bonds between the parties involved in the relationships can provide unique advantages to all the parties and have the potential of leading to a sustained competitive advantage for the company. This has been characterized as a win-win paradigm (Dowling and Uncles, 1997; Gummesson, 1999).The customer who frequently purchase high priced product from the certain company without switching then it shows the customer is loyal to it. There can be a ‘Dog loyalty’ and ‘Cat loyalty’. The Cat Loyal customers may switch with better service or product of competitor. But Dog loyal customers are having hardcore loyalty and they withstand with the company in all times. This increases the ‘Customer Life Time Value’.
Gummesson (2002) through 30R’s of Total Relationship Marketing shares that relationship marketing offers a broader perspective than the conservative marketing paradigm. Relationship marketing is not only restricted to the customer-supplier dyad, but also a supplier’s relationship to his/her stakeholders such as own suppliers, competitors, and middlemen. RM is applied to 1) Classic market relationship, 2) Special market relationship 3) the firm’s mega relationships to public authorities, the media, and political parties and 4) nano relationships concerning the internal relationships in the company.
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In addition to that, according to Christopher, Payne and Ballantyne (1991), a company should, in fact, build relationships with six equally important markets. That is, the key market is the customer market, which is supported by five other markets: the employee recruitment market, the supplier market, the referral market, the internal market and the influence market. All the parties involved in this network enter into active contact with each other (Egan, 2001). That is what Gummesson (1999) calls ‘interaction’.
Summary
Customers through detailed study of products can identify fabrication and glib lying of the sellers. They are more shrewd and astute than ever. They judge about products and services along with other informed customers & through individual evaluation. Due to co-creative ability of customers, customization is being replaced by personalization. Managing customers’ experiences is much critical than ever. Products must be shaped as per the users’ preferences. But Converse is not always true. Products must be evolved in line with Customer feedback. It is not easy as said. Customers must share the changing expectation instead of tacitly switching to the competitor product. Customer retention is the need of hour which leads to better profitability and that is possible through understanding customers well.
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©2019, Dr. Amit Medhekar. All rights reserved.
