One of the things of most value to a company is its relationships—
with customers, employees, suppliers, distributors, dealers, and retailers.
The company’s relationship capital is the sum of the knowledge,
experience, and trust a company has with its customers, employees,
suppliers, and distribution partners. These relationships are often
worth more than the physical assets of a company. Relationships determine
the future value of the firm.
Companies need to keep a relationship scorecard that
describes the strengths, weaknesses, opportunities, and threats in regard to the relationship. Your company needs to move fast and
repair any important but weakening relationships.
Traditional transaction marketing (TM) tended to ignore relationships
and relationship building. The company was viewed as an
independent agency always maneuvering to secure the best terms.
The company was ready to switch from one supplier or distributor to
another if there was an immediate advantage. The company assumed
that it would normally keep its current customers, and it spent most
of its energy to acquire new customers. The company neglected the
interdependence among its main stakeholders and their roles in affecting
the company’s success.
Relationship marketing (RM) marks a significant paradigm
shift in marketing, a movement from thinking solely in
terms of competition and conflict toward thinking in terms of
mutual interdependence and cooperation. It recognizes the importance
of various parties—suppliers, employees, distributors,
dealers, retailers—cooperating to deliver the best value to the target
customers. Here are the main characteristics of relationship
marketing:
• It focuses on partners and customers rather than on the company’s
products.
• It puts more emphasis on customer retention and growth
than on customer acquisition.
• It relies on cross-functional teams rather than on departmentallevel
work.
• It relies more on listening and learning than on talking.
Relationship marketing calls for new practices within the 4Ps
(see box).
The shift toward relationship marketing does not mean
that companies abandon transaction marketing altogether.