From transaction to relationship
The business world is becoming more competitive – new competitors are appearing on the scene faster that we can counter them. This means that marketers need to develop loyal customers. One way of doing this is moving beyond mere transaction into developing deeper relationships and stronger bonds with the customer. In other words, love the customer, don’t hate the competitor. When marketing our business, it is important to note that we are competing for three things as far as the customer is concerned;
- Share of mind
Here we are competing to occupy the largest portion of the consumer’s mind: to dominate and rule his mind and most importantly to influence it. The goal is to occupy the highest possible position of recognition and esteem. Think of any product that you use such as toothpaste. By the time you finish reading the word ‘’toothpaste’’ you will already be thinking of various toothpastes available in the market. The one that come to your mind first occupies the largest share of your mind and most likely it is the one you use. How did this happen? Can the same thing happen to your business?
2. Share of Heart
Here we are literally competing for the consumer’s love. While the share of mind may be about conviction based on product features such as cavity protection and whitening of teeth, share of heart is about liking and preference. Share of heart is influenced more by perceptions than facts. It is not based on something that the consumer can explain or justify. But should marketers care? They must care so as to ensure that this love is sustainable. If somebody comes up to you and tells you that he or she loves you, the first logical thought that comes to your mind is ‘why?’ If you are interested in their love, knowing ‘’why’’ will help you add value and deepen the love. The same applies to business. Just as the person who wins a lady’s heart is the one who finally walks her down the aisle; it is the marketer who wins the consumer’s heart who will have his products take home.
3. Share of Hand
Here we compete for the actual purchase. How much of our products do the customer buy? The marketer with the largest share hand will have more of the customer’s shillings. It is not enough for a person to think highly of you or to have strong feelings for you; they must act on these things. Similarly, the marketer must do anything and everything necessary to turn the share of mind and heart into share of hand. Most importantly you must ensure that you do not lose either of these shares.
To increase the above shares you have to start valuing your customers more and developing deeper and sustainable relationships with them. To do this, you need to deliver superior value and satisfaction to the customer. There are various levels of relationships that you can maintain with your customers, each of which has its own rewards. These include:
- Basic Awareness
This is the lowest and weakest relationship level possible. Here the parties are just interested in the transaction. The customer receives the product and the seller receives the money and there is no obligation or motivation for a repeat of the transaction. It is easy to think of this in terms of an ordinary Matatu transaction. You enter, pay and alight at your destination. You may not even remember the registration number or even the colour of the matatu. Either way it doesn’t matter.
If this is the kind of relationship you have with majority of your clients, you are at risk. It is likely that you will lose your business share. This relationship is not very rewarding and it jeopardises the business in the long- run. Even in ordinary life, relationships that are based purely on a transaction are the most useless. It is like loving a person because of money only to realise that once you are married the only thing you share is that both of you are human beings and the rest are just differences. Soon the boat will be unstable and eventually, it will sink. If your business boat is to stay afloat you need to take the relationship beyond the transaction. Human beings are not money minting machines; they are fragile and must be handled with care.
Here the relationship is more interactive and significant. The seller tries to attract the attention of the other party to bargain and to understand the nature of the power, norms, and expectations held by the other. In more familiar terms, it is like meeting people and talking to them with the aim of trying to understand them better. The marketer seeks to understand his client especially his buying charateristics (such as the reason for purchase). The marketer must understand that people don’t buy products. Instead they buy benefits. In the same breath, when you go for hair cut you are not buying the hair cutting services, you are buying confidence. The barber must be done in such a way that it leaves you feeling more confident to face the world.
This stage is an enhanced relationship in which a reaction is induced and accountability is developed. The seller responds when the customer has problems and seeks her feedback. The ensuing exchanges provide the clues as to whether the relationship can be long-term. Falling back to our example above, it is similar to going out on a date. At the end of the date you can tell whether there is hope for long-term relationship or if all is lost.
Here the marketer’s challenge is to ensure the client trusts him and can continue to rely on his products or services. You must try and understand the customer clearly in order to deliver total satisfaction to win their long-term confidence.
Here the relationship moves a notch higher and results in some form of partnership. The seller contacts the buyer for updates and they share information that provides a deeper insight necessary to offer the best service possible. A sense of exclusivity also emerges where the buyer no longer feels motivated to seek alternatives. It is similar to a guy and a lady making commitment to each other. Arguably, each breathes a sigh of relief and believes the best days are ahead of them. Similarly, the seller who reaches this stage has achieved a lot and great is his reward.
This can be viewed as negative development or an accident in the process. However, it may not always be acrimonious since the reasons for terminating the relationship may be beyond the control of either party. Whatever the case, lessons are learnt and the marketer must improve to ensure this is not a regular occurrence. Dissolution will lead to the worst loss if it occurs at an advanced level of the relationship sine the parties have a lot to lose. For instance, if the buyer had committed to buying a tailor made dress and the dress has to be returned, the seller may not have an alternative use for the dress and might as well just write it off.
Benefits of Relationship Marketing
Relationship marketing has many benefits such as increasing customer retention. As a result fewer resources are spent in acquiring new customers. It also leads to increased market share due to the positive word of mouth resulting from the enhanced relationship. Further, leads to cost savings since you already know so much about customers as opposed to wooing a new customer altogether. Similarly, it leads to ease of transaction since the needs of the customer are well known. It is like going to your regular restaurant and asking for ‘’kama kawaida’’. You will be served quickly and in a better manner. Relationship marketing also leads to loyalty building since customers with whom you have a longer relationship will be more loyal and unwilling to embrace the competitors. It also makes planning easier since you can easily forecast your sales unlike if the relationship was just ‘’a walk-in-walk-out’’ type.
Relationship marketing is an important marketing strategy that all businesses should adopt. Customers like to be treated as individuals and not as an audience. Practising relationship marketing enhances the business’s future prospects and its sustainability. At the end of the day, those who know their customers will reach great heights in their businesses and those who knows nothing or very little about their customer will soon be pushed into everlasting irrelevance. The information is in your head and the choice is in your hands.