Why have marketing managers moved dramatically from transactional marketing to relationship marketing? What are...
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
the implications of the change for organizations and customers?
The shift from transactional marketing to relationship marketing is driven by the desire to maximize revenue and profit from customers. Imagine two customers who pay $200 for a hotel stay. One stays in hotels on average three nights a year, while the other stays 50 nights a year in hotels. The financial logic is that it is worth pursing the latter customer more than the former. Additionally, some customers develop unprofitable behavior after the transaction by demanding excessive service for free. Marketers have discovered that not every transaction is profitable, and therefore they need to measure in terms of relationships.
The implications for the organization is that research of customer purchasing patterns and relationships should be carefully executed. Customers should be segmented and selected on the basis of relationships and not just by end-of-quarter transactions. Organizations should also learn to say "no" to some customers and to send unprofitable customers to the competition.
For customers, the implication is that they will have to make choices and stop spreading their business between many competitors. If they continue to do so, they will not receive an adequate customer experience and often will be treated as inferior to those customers who are committed to long-term relationships.
Related Q&A from Lior Arussy
Find out the best way to use a customer segmentation strategy to design a retention model that allows you to hold onto current customers and provide ...continue reading
Read about how to make a more customer-centered and innovative workplace organizational culture, with tips on collaboration, education and the voice ...continue reading
Learn customer experience metrics, including how to track and measure the impact a website redesign may have on the online customer experience, in ...continue reading
Have a question for an expert?
Please add a title for your question
Get answers from a TechTarget expert on whatever's puzzling you.