Relationship Equity
With certitude, Customer relationships does not sustain themselves and should not at all be taken for granted. Practically- Not all relationships remain to be the same. Hence businesses have to glance at each strong individual relationship with customers and what investment it will take to develop the relationship into a “lasting and lucrative” one with them. Therefore, organizations are not going to invest the same amount of their marketing lucre on every customer. The amount will be decided by the value of the customer’s future business.
It is the task of the company to figure out how to build “customer or relationship equity,” which is defined as “the total lifetime value of the firm’s customers” (Maas, 2000). Brand equity is now progressing towards customer equity.
Companies need to develop a human resource management plan that starts with recruiting and continues through the entire employment cycle, emphasizing the value of people, their growth and development, the importance of team, and the long-term significance of win-win relationships (Crosby & Johnson, 2002).
Stages of Relationship Marketing
- Levitt (1983) and Dwyer et al. (1987) see five stages in the development of a relationship:
(1) Awareness; (2) Exploration; (3) Expansion; (4) Commitment; and (5) Dissolution.
Clark and Mills (1979) use the term “communal relationships” to denote those relationships which have benefits to both parties where each is concerned with the welfare of the other. Such relationships are likely to be of a long term nature.
- Scanzoni (1979) sees three stages of involvement:
(1) Exploration; (2) Expansion; and (3) Commitment.
Once exploration has taken place, the degree of interdependence increases during the expansion stage; the commitment stage is where individualist concerns merge with collective interest.
- Relatively more important factors are in most relationships considered are: 1.Commitment; 2. Trust; 3. Customer Orientation/Empathy; 4. Experience/Satisfaction; and Communication
Culture affects people and the way they live their lives; in many respects it dictates how they live their lives, and it influences many day-to-day decisions that people make. Successful communication is dependent on an exchange of mutually recognized symbols and values.
The opposing factors with the most considerable impact on delighting customer relationship are unsettled conflicts between sellers and customers. It can quickly cause disorder—annihilating trust, cooperation, and commitment. Ultimately, a relationship built through many years of investment and services. To avoid and diminish these disagreements, Sellers must ensure that their business processes are aligned to their relationship marketing strategy. The company culture must thrust upon the importance to reduce conflict, and must establish formal valuable systems for correcting customer issues with celerity.
Summary:
Relationship Equity and Stages of Relationship Marketing are studied in this article. The learned & well informed staff increases customer loyalty as a whole and less friction in total experience of purchase & After-sales service. As Hart and Johnson (1999) put it, “It’s good for customers to feel to be sure. Also companies increasingly are moving away from thinking about transaction-based customer satisfaction and thinking more about developing deep, long-term customer relationships.
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©2019, Dr. Amit Medhekar. All rights reserved.
