1. Building Customer Relationships
Chapter 7

2. Why are customer relationships Important to services marketing?

3. What is Relationship Marketing (RM)?
Principles and standards that:
Create stable links between exchange partners
Create effective, cost-efficient measures to engage long-term customer commitment.
Create stronger relations between a customer and the salesperson/organization.

4. Relationship Marketing Defined
There are numerous suitable definitions for RM. For our purposes, we will define RM as:
Creating, developing and sustaining exchanges of value between parties whereby exchange relationships evolve to provide continuous stable links.

5. Relationship Marketing,…..From 4Ps to 4Cs
Price Cost to Customer
Place Convenience
Product Customers needs and wants
Promotion Communication

6. What’s Happening?

7. Discussion Question # 3, page 182

8. Simple return on Relationship Model
Customer
Satisfaction
Customer
Retention
Service organization’s
success

9. Two Viewpoints on Relationships
Customer/buyer viewpoint
Service provider/sellers viewpoint

10. Customer/buyer’s Viewpoint
Benefits for engaging in relationships include:
Reduces choice and search alternatives
Initiates and builds trust
Social bonds through communication

11. Service provider/ sellers Viewpoint
Benefits include:
“locking” up the customer/buyer (retention)
Positive word of mouth
Customer commitment
Increase in purchase rates (may include secondary products)

12. Strategies for Building Relationships
Core Service Provision:
service foundations built upon delivery of excellent service:
satisfaction, perceived service quality, perceived value
Switching Barriers:
customer inertia
switching costs:
set up costs, search costs, learning costs, contractual costs
Relationship Bonds:
financial bonds
social bonds
customization bonds
structural bonds

13. Levels of Relationship Strategies
Stable pricing
Volume and frequency rewards
Bundling and cross selling
1. Financial bonds
Integrated information systems
Continuous relationships
Excellent
service and value 4.
Structural bonds 2.
Social
bonds
Joint investments
Personal relationships
Shared
processes and equipment
3. Customization
Bonds
Social bonds among customers
Anticipation/ innovation
Customer intimacy
Mass customization

14. Discussion Question # 6, page 183