1. Lecture 10
Customer Relationships

2. Customer Relationships — Today’s Objectives
Objectives will be to:
Develop a clear definition of relationship
Explore why firms want relationships with their customers
Discuss the relationship stages and interaction intensity
Examine the effects of the Internet and 2Is on customer relationships
Discuss some final points about customer relationships and the Web

3. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
EBay Case Study
Conclusion

4. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
EBay Case Study
Conclusion

5. Relationship Type & Involvement Continuums
Enduring Involvement
Exchange
Relationships
Communal
Relationships
Situational Involvement

6. A Continuum of Relationship Involvement
High
Automobile
35-mm Camera
Expensive Watch
Product type (cost, level of symbolism, risk)
Stereo Component
Eyeglasses
Scotch Whiskey
Hair Coloring
Wine for Dinner Party
Washer/Dryer
Purchase situation (visibility, social acceptability)
Relationship Involvement
Face Soap
Credit Card
Salad Oil
Deodorant Soap
Insecticide
Headache Remedy
Consumer type (interests, values, attitudes)
Liquid Bleach
Insect Repellent
Disposable Razor
Potato Chips
Soft Drink
Paper Towels
Low
Toilet Tissue

7. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
EBay Case Study
Conclusion

8. Length of Customer Tenure and Profitability Relationship
High
Profitability
Low
Short
Long
Customer Lifetime

9. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
EBay Case Study
Conclusion

10. Moving Through the Relationship Stages
Awareness
Exploration/
Expansion
Commitment
Dissolution
Customers can advance through the stages in several different ways

11. Two Alternatives for Customers at the Commitment Stage
Stay
Committed
Satisfied,
profitable customers
Commitment
Dissolution
Unsatisfied or
unprofitable customers
Customers can either stay committed or move to dissolution

12. Level of Interaction by Stage of Customer Relationships
Four Key Stages of Customer Relationships
Awareness
Exploration /
Expansion
Commitment
Dissolution
Level of Intensity
Level of Intensity
Intensity
Stages of Customer Relationships

13. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
EBay Case Study
Conclusion

14. Are Interactivity and Individualization Always Necessary?
Low Individualization,
Low Interactivity
Example: news service
High Interactivity
Example: library
High Individualization,
Example: bank statement

15. Online Privacy Attitudes

16. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
EBay Case Study
Conclusion

17. Integrative Framework: Building Relationships on the Web
Four Key Stages of Customer Relationships
Awareness
Exploration/
Expansion
Commitment
Dissolution
Price
Product
Promotion
Distribution
Marketing Levers
Brand

18. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
EBay Case Study
Conclusion

19. Building Relationships at EBay
Four Key Stages of Customer Relationships
Awareness
Exploration/
Expansion
Commitment
Dissolution
No. 1 general auction service on the Internet
EBay encourages browsing before registration for the purpose of exploration
EBay offers (1) community, (2) individualization, and (3) interaction
Users can stop buying or selling at any time

20. Customer Relationships
Defining Relationship
Why Firms Want Relationships With Their Customers
The Relationship Stages and Interaction Intensity
The Effects of the Internet and the 2Is on Customer Relationships
Some Final Points About Customer Relationships and the Web
eBay Case Study
Conclusion

21. Customer Relationships —Conclusion
The customer relationship stages are:
Awareness — The customer recognizes that the firm is a possible exchange partner, but has not initiated any communication with the firm or purchased its products
Exploration — The customer considers the possibility of exchange, gathers information and perhaps initiates trial purchases
Commitment — The parties in a relationship feel a sense of obligation or responsibility toward each other
Dissolution — This stage signals the separation of buyer and seller — the loss of connection
The Internet allows firms to interact and to individualize in powerful ways. As a result, firm-customer relationships can be formed and can progress very quickly
Firms don’t always want a relationship with all customers and vice versa