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It's All About Relationships

NZ Business - March 1997

By Theo Muller


These are exciting times for marketers, business owners and managers because of the changes that have been taking place in the way we market our businesses, products and services and, indeed ourselves.

The buzz word these days is "Relationship Marketing". Yet in concept nothing has changed, or perhaps more accurately, in practicing relationship marketing we acknowledge what we should not have forgotten in the first place i.e. the vital importance of the customer. Go back to the forties and fifties when customer service was a well understood and practiced business concept. In those days the butcher the baker and greengrocer delivered your purchases to your house, tradespeople could be relied upon and in any business-to-business relationship the customer was given fitting VIP status. Service was personal, genuine and uncomplicated. It almost reeked of subservience in many cases.

Notable exceptions were the practitioners of professional services particularly the legal fraternity. To some extent this is understandable because in a society where only a few attained university degrees there was a tendency to put the "Professions" on a pedestal - above anybody else. From that elevated position it can't have been easy to "come down" and elevate some one else, i.e. the customer, who in most cases was not qualified at university level.

Then came the sixties and seventies with its increase in production technology. Mass production required mass consumption. The concurrent development in modern media took care of that. The consumption society was born. "Consumption" and "Production" became involved in a single minded love affair. They only had eyes for each other and lost track what was going on around them. Production and Consumption started their family in the eighties (It's not known if they ever got married). Their first offspring were the twins "Lean" and "Mean" followed a few years later by "Bottomline". It was not until the late eighties that "Satisfaction" was born, grew up a very unhappy child and became a difficult but strong-willed teenager.

Satisfaction met " Relationship" in the early nineties and they really hit it off straight away. Now in 1996 they are still together and thriving.

That brings me back to relationship marketing. What I had hoped to demonstrate is that society and business have gone full circle. As customers we want to be looked after - always have done. But we have become more discerning and forthright. Our loyalty is more fragile - if we don't get treated the way we deserve to be treated (indeed we now consider fair, honest and respectful treatment as a right and not a privilege) then we go somewhere else. So relationship marketing, i.e. building "effective, efficient, enjoyable, enthusiastic and ethical relationships which are personally, professionally and profitably rewarding to buyer and provider" (Clive Porter) is something we all have to be good at if we want our business to thrive. It's for that reason that Professor Philip Kotler calls Relationship Marketing " a key strategy for the 1990s".

So, if you think this makes sense, you may wonder where to start. With your customers!! Have you ever found out from your customers what they think is important in the relationship they have with you and your company? What are their expectations and how are you and your company performing against these expectations? In other words conduct a Customer Relationship Audit. Better still get some one else, outside your company, to do this for you. To quote Philip Kotler again " customer/client relationship audits should be independent, objective, systematic, comprehensive and periodic". He says " the best audits are likely to come from experienced outside consultants who have the necessary objectivity and independence, broad experience in a number of industries and some familiarity with this (your) industry and the individual time and attention to give to the audit". (Philip Kotler, Marketing Manager, Sixth Edition, page 747).

A customer/client relationship audit is essentially a benchmarking exercise where you get your customers to state what aspects of the relationship between you (as the service or product provider) and them is regarded by them as important. You can then measure your performance against this importance rating. To make it really interesting and useful, you find out how your competitors are doing at the same time, so you can benchmark your performance against your competitors' performance as seen by your customers.

Now that you have taken stock of your business, you know what your strengths and weaknesses are and this puts you in a position to develop the appropriate strategies to build on them.

How you do that is another story.

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