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Relationship Marketing Part 1
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Summary/Intro
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Assessing Customer Potential,
The management of a relationship portfolio will require the marketer to
make decisions as to which relationships to develop, which to continue
and which to end. Frameworks of portfolio analysis such as that
outlined by Donaldson and O'Toole (2000) provide useful insights into
the overall state of the organization and the nature of the strategic
task, but do not offer help in choosing which relationships would best
be developed or discontinued.
This article therefore identifies the factors that should be considered
in determining whether a prospective relationship has the potential to
develop into a long-standing partnership.
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Full Details - Relationship Marketing Part 1
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Assessing Customer Potential, Part 1
The management of a relationship portfolio will require the marketer to
make decisions as to which relationships to develop, which to continue
and which to end. Frameworks of portfolio analysis such as that
outlined by Donaldson and O'Toole (2000) provide useful insights into
the overall state of the organization and the nature of the strategic
task, but do not offer help in choosing which relationships would best
be developed or discontinued.
This article therefore identifies the factors that should be considered
in determining whether a prospective relationship has the potential to
develop into a long-standing partnership.
Commitment
Commitment
is a feature of all stable relationships. When looking for
relationships with development potential, the manager should therefore
favor those customers or suppliers that have made, or are willing to
make, a commitment to the business relationship. Hocutt (1998)
providers an even clearer guide, by noting that commitment arises from
a satisfaction and investment in the relationship:
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Satisfaction: various studies (e.g. Cronin and Taylor 1992, Patterson and Johnson, 1997) have shown what common sense predicts: customer satisfaction is a prerequisite of commitment.
This means that the planner must gather feedback about customer
satisfaction on a regular basis - this can then be used to determine
which customers offer the most potential for development.
Investment: where the customer has made a significant investment in the initiation or maintenance of the relationship, that
customer will be committed to the relationship. It is important to
stress here that commitment may not only be in the form of money or
hard resources. Thibault and Kelley (1959) noted that the time and
effort expended in finding new service suppliers influences customers
to continue business relationships.
This means that the planner should not only seek out information about
the economic resources that the customer devotes to the relationship,
but also the time and effort that the customers perceive themselves to
have spent in this respect.
By Michael Thomas
Relationship Marketing Is The Key To More Traffic & Sales
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