Forget Profits, Think Relationship Marketing

By Psirmoi Daniel

The market environment, business people will tell you is continually evolving, in tandem with the ever changing and turbulent market environment. New strategies and techniques of staying afloat in business are constantly being developed.

Smart traders and business people are shifting from the traditional approach of profit maximization on individual transactions to building mutually beneficial relationship with customers and other parties.

One such strategy is relationship marketing, a relatively new concept.

Philip Kotler, a scholar defines it as "the process of creating, maintaining and enhancing value-laden relationship with valued customers,  distributors, dealers and suppliers by promising and consistently delivering high quality products, goods, services and fair prices.''

Put simply, it refers to the effort directed at creating loyal customer.

Practically, a business that has loyal customers is profitable in the long term. The loyal customer will not only act as promoter: through word of mouth and referrals to their friends and family, but they themselves will make subsequent purchases from the firm/business which they identify with.

This is also applicable where there is a competing alternative product in the market. Obviously, customers will be spoilt for choice.

A business which has a good relationship with its customers will flourish-the customers will resist the temptations from the competitors.

It’s apt where there’s an ongoing and periodic desire for product. Traditional marketing may be deemed wasteful in a scenario where there's periodic desire of a good.

Caution should be exercised though. Enthusiasm for customer retaining methods should not override and endanger sound- customer getting efforts.   

Entrepreneurs and business owners should not regard success as stemming from obtaining new customers and high sales volume, but how they relate with the customer. The management is required to value the potential of current customers and treat them in a special way to retain them.

Relationship marketing is profitable and mutually beneficial and should be adopted by serious business people.