By M. Isi Eromosele

One of the most valuable factors to any company is its relationships to its customers, employees and suppliers. A company’s relationship capital is crucial to its ability to continue interacting with these divergent groups.

These relationships can be said to be more valuable than the material assets of the company. Without their being properly managed, the company would cease to exist as a business entity. Relationships determine the future value of a company.

Companies need to be keenly aware of the strengths, weaknesses, opportunities and threats that are inherent in regards to their relationships with customers. It is imperative that a company should move fast to repair any significant but fraying relationships.

It would be a serious mistake for a company to ignore the interdependence among its major stakeholders and the roles each play in the company’s success.

The advent of relationship marketing marks a major shift in marketing. In the new paradigm, the thinking has moved away from thinking solely in terms of competition and confrontation to one that emphasizes mutual dependence and collaboration.

The importance of the various parties - customers, employees and suppliers is recognized by all, leading to a high level of cooperation in building high value relationships. The major characteristics of relationship marketing are as follows:

• It focuses on customers and partners, rather than on the company’s products and/or services
• It puts more emphasis on customer retention and growth than on customer acquisition
• It relies on cross-functional teams rather than on business unit teams
• It relies more on listening and learning rather than constant talking

Relationship marketing highlights the need for new marketing practices. Companies need to operate with a mixture of transactional and relational marketing approaches.

Companies selling in large consumer markets would need to practice a greater percentage of transactional marketing. Conversely, companies operating within a smaller consumer market would need to practice a higher percentage of relationship marketing.

Other attributes of relationship marketing:

Products

• More products are customized to customer preferences
• Product development is achieved through collaboration with suppliers and even competitors

Price

• Companies set a price based on their relationships with customers
• There is leeway for more negotiation since products are often personalized for each customer

Distribution

• In relationship marketing, there is more direct marketing, eliminating the role of middlemen
• Alternatives are offered to customers , facilitating their ability to choose what they want

Communication

• Dialogue with customers is carried out through personal communication
• Integrated marketing is used to deliver the same message to various groups of customers

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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