Lasting value for customers

The concept of a lasting relationship of mutual value with your customers is not new. But in our era of mass production, mass consumption and mass marketing, relationships of business quality with individual organisations have been seen as too expensive and time-consuming to achieve.

By Andrew Clare

4 Nov 2003

In a mass production economy, marketing efforts are aimed at economies of scale - communicating with the largest amount of potential customers possible about a company's products and services, in the hope that a small proportion of them will become customers. Most traditional marketing channels, such as TV advertising and direct mail marketing, reflect a focus on reaching as many customers as possible - an approach which builds market share for the company.

By contrast, a one-to-one marketing approach in a business-to-business environment, focuses on getting and increasing revenues profitably from the customer organisation. A better understanding of those organisations' needs means that they are retained as customers and can be offered more services. Thus the company's share of the business of that customer, and their available spend, can be grown. The deepening of this relationship is reflected in higher value for your services to those companies, and therefore less pressure on your margins.

A marketing relationship of this kind is a key tool for business strategy, if we view the goal of strategy as follows: the differentiation of the enterprise by using customer insight to strengthen the company's competitive position.

The use of these insights into customer preferences and individuated needs, gleaned through various feedback mechanisms and an array of marketing and communications channels, leads the innovative marketing organization to the zenith point of real differentiation and competitive advantage based on unique knowledge about the customer. These can be termed learningRelationshipsÔ.

A learningRelationshipÔ is formed when you open up a feedback channel with your customer, which is also a means to dialogue. When your customer talks with you, you can harvest and act on the information communicated, tailoring your products, services and interactions to meet the expressed need. All the more so when you understand your customers' business strategy and opportunities. This allows you to focus in on your customers' areas of greatest return for them and in turn your own organization.

What is important is that the learning happens for both parties - you, and your customer. The more effort a customer invests in feedback and communication, the more they will be invested in making the business relationship work. Soon, if you are responding proactively to the dialogue you are having with the customer, it will demand too much effort on their part to move the business elsewhere. This will mean starting from scratch, completely reinventing the relationship.

The ultimate goal of the learningRelationshipÔ effort is to bring your invested, committed customer into your organization, figuratively speaking. The customer forms the central cog of an integrated business entity, in which the internal structure of the business works constantly to develop competitive advantage through customer knowledge and dialogue, thereby sustaining growth, profitability and increasing brand value in the market. The concept of a learningRelationshipÔ is a key one in enabling this process to happen in your organisation.

About the author

Andrew Clare is director of reliance, a specialized relationship marketing advisory service focused on providing organizations with an easy to implement framework for applying relationship marketing insights to their own business-to-business customer relationships. reLiance is committed to driving bottom line results for its customers through the use of the learningRelationshipÔ model, Tel: (011) 802 0500 or email at andrewc@worldonline.co.za.