Customer Relationship Managment - Essay Example

Introduction Relationship marketing was pioneered by Leonard Berry after the realisation that conventional marketing strategies had certain inefficiencies. He realised that there was a need to cater for the needs of pre-existing customers and establish a relationship with them. This was because other marketing strategies mostly dealt with single transactions. They concentrated almost all their efforts in acquisition of new customers but once they got them, very little could be done to retain them. Consequently, there was high customer turnover and low consumer satisfaction. Berry (1983) appreciated the fact that something had to be done. He therefore came up with a strategy to make customers come back and to establish customer loyalty through relationship marketing. He established three preconditions necessary for relationship marketing to work. The first was; if the market in which a company operated in had many services to choose from. The second was if a company’s customer’s decided on one of those services/products and the third was if the consumer continuously needed the product/service. If all these requirements existed, then there would be fertile ground for implementation of relationship marketing. (Berry, 1983) Extent to which Tennyson’s product and the customer market offer the potential for relationship marketing Experts agree that no matter what kind of tool a company decides to take up to implement relationship marketing, it must facilitate greater contact with the customer and it must be personalised. In line with this argument, Tennyson has been in the cold season tour industry for quite a long time. Consequently, they have a lot of experience in biking, water sports and snow sports. They have instructors within those spheres and those instructors have the potential to inform clients about those qualities. This will go a long way in ensuring that clients have an enriched tour experience. Therefore, if the company uses these instructors, they can improve their clients’ holidays and make it worthwhile for them. . (Buchanan & Gilles, 1990) Tennyson Ski has been operating in various locations. It could start by reducing the number of destinations and offering clients just one location. This will increase the levels of contact between the company and its customers. When their consumers are scattered all over, it becomes difficult to deal with each one of them and to address their problems. So the first product that shows great potential for relationship marketing is the number of destinations. In relation to this, the Ski Company has not been keen on their level of staff representation. This is something that needs to improve immediately if the company plans on embarking on a relationship marketing strategy. They could emulate what the partner - merry weather -is doing. The latter company’s ratio is 1.8; this is something that adversely affects the level of consumer satisfaction. Customers can air out their grievances or requirements to the tour operators as conveniently as possible. Those employees should also book the customers directly and should ensure that this is done prior to commencement of the holiday. These changes represent potential for customer care improvement. Similarly, Tennyson could improve its relationship marketing strategy by sending some of their representatives in the outdoors. They have come up with the idea of ski gurus linked to the company. If the company could implement this idea in all of its tour operations, then it will go long way in enhancing the relationship between the company and itself. This is because customers will interact with the ski experts and share ideas about skiing. They will view those ski gurus as the ‘face’ representing the ‘Tennyson’ name. Consequently, the company will have to personalise its services and will encourage consumers to come back. The company has potential to make its services consistent. This is because in relationship marketing, the customer cycle is only complete when both parties meet their obligation. Consumers have the obligation to keep coming back once they have made a commitment while suppliers (Tennyson) have the obligation to continuously and effectively deliver their goods and services. There is a need for Tennyson to improve their services in such a way that customers can count on them every season. This is something that is not happening currently but could be introduced. Tennyson should also take advantage of the fact that it has a large network of suppliers. Relationship marketing also involves the use of supplier ties to improve customer efficiency. (Levitt, 1983) The company could inform their consumers about the fact that their sports equipment suppliers are among the best in the industry. Consumers will be more than glad to do business with a company that guarantees them quality through their resources. This same aspect could also boost relationship marketing because it will make Tennyson employees glad to work for the company and more enthusiastic about their tasks since they will have ample resources/facilities to go about doing their work. Employees who perform to customer expectations or those how exceed these expectations will make the consumers keep coming back and this will create a customer cycle that is essential in relationship marketing. Tennyson also has the potential to improve its staff development programmes. This can be achieved through training and development. By doing this, the company will be equipping its staff with the necessary skills and knowledge required to provide the best services to their clientele. This can directly enhance their relationship marketing strategy by satisfying their client’s needs. But it can contribute to the strategy indirectly in that more employees will be drawn to the company and will establish a good name for the company within the tour operations industry. Another area that represents potential for relationship marketing for the company is the issue of creating a homely atmosphere. This can be improved greatly since most holiday makers would like to identify with a company that offers services that are not common to all others. Most other commercial operators lack the ability to add that personal feel to their services. Despite the fact that most of the holiday makers using tour operators stay in resorts, it would help if the atmosphere was welcoming and warm. This is something that the company has not achieved but that could be improved in the future. Tennyson also deals with mountain climbing. In the past, they have not been very keen on this particular market segment; consequently, there is a need for the company to ensure that they pay more attention to this group. They could recognise and engage with guests in that area of their service provision. (Jackson, 1985) In relationship marketing, a lot of emphasis is placed on the importance of quality. It would really help the Ski Company if their clients were assured that the company’s employees are certified. This could be seen through the endorsed ability system provided by the company. This can be backed up by the certificates and grades that the company should issue. In line with this argument, consumers will also be greatly assisted if the company decides to set up a ski schools, some clients might want to take advantage of the Ski experience but lack the technical know how to go about this. It would therefore be very instrumental for the company if they had a ski school that would equip customers with this knowledge. Another product that could create the same effect is the issue of her shops. Some clients may not necessarily have all the equipments needed for water sporting or snow sporting activities. It is therefore crucial for the company to provide those alternatives for its consumers since this will ensure that their clients can still engage in those sporting activities. Such a service will contribute towards greater levels of customer satisfaction and will ensure that they keep coming back. How Tennyson could improve their relationship marketing strategy Relationship marketing is founded on the belief that in order to satisfy consumers all the negative factors ought to be eliminated and more positive aspects need to be introduced or emphasised. (Berry, 1983) In order to emphasise these positive aspects, the company needs to know which ones they are. That is why it needs to be aware of the consumer trends. Tennyson has achieved this to certain levels since it was able to find out what their clients are looking for. For example, the company found that most of their consumers had a preference for an enriching experience. This is a value that has been echoed in recent societal trends. On top of this, the company also found out that most people have money to spend on holidays but have very little time. This implies that the services offered by tour operators could come in handy. This is something that the company should improve in the future. The customer survey was an important part of Tennyson’ relationship building efforts because they got information that would guide them on what kind of services their customers would prefer through their income brackets; this findings should be the basis for change within the company. The company found out that most their clients happen to fall in the same income group as some of the merry weather clients then they could offer similar services as the alter company. The information obtained during customer surveys will also be instrumental in helping Tennyson determine whether their clients would be in need of training services. This was affirmed by the low percentages of experts in the cold weather category. This also affects the sort of resources made available to clients since there is no need for advanced material if most of the clients do not know much about the sporting equipment. In the past, the company has mistakenly assumed that most of its clients come from an advanced sporting background and than was why they had really invested in advanced equipment. The survey should now help the company to rectify this and adjust its services to suit their clientele. Although relationship marketing involves the establishment of long term relationships with clients, there is a need to first acquire those customers in the first place. Butterworth Heinemann (1991) asserts that there is a six stage process that customers need to go through before they can become long term partners and instrumental parts of their relationship marketing strategy. He claimed that customers need to climb the ladder from the ‘prospective’ as listed above to the partner partner advocate supporter client customer prospective As it can be seen from the list above, first a company needs to identify who their prospective clients will be. Tennyson has embarked on this journey through its customer valuation, where customer valuation is assessment of customers to find out which customers are instrumental and valuable to the company. Those ones who have not been very participatory will need more effort so that they can climb up the ladder and achieve partnership status. For Tennyson, this could be done through tapping the hot holiday customers. The customer survey revealed that large percentages of the merry weather clients were willing to take up activities and services offered by the company. They could also convince those customers who have not made up their minds about the type of company that will manage their resources to sign up with Tennyson. On top of this, the company has also found that some clients would prefer certain activities compared to others. This could act as a guideline for the company in the next cold season; activities that seem more popular than others should be given more attention. This will ascertain that clients are satisfied. Tennyson’s attempts at relationship building Relationship building should start with research. This is because a company needs to find out what they are missing before they can start improving. The company has tried to achieve this successfully. First of all, they hired a consultancy firm. The firm has expertise in the field of research and it is also neutral. This means that the information gathered will be more or less accurate since a third party is involved. On top of this, they have gone out of their way to utilise some of the sources of information that are available for them, out there. Some of these avenues include consumer feedback, management interviews, theoretical research and workshops. The second thing a company needs to do is that they should try and evaluate their customer’s perceptions towards them. This is because before customers can identify and engage with a certain company, they need to relate that company to something superior. (Buchanan & Gilles, 1990) The company needed to make sure that their name stood out for other players in the industry and that it made them exceptional. Relationship building should be two way. The company should also evaluate what it stands for in the industry and whether they accomplished what they had set out to do in the first place. This is achieved through brand essence evaluation. This should then be followed by plans for the future. The business has to identify the ideal positions it would like to take up and this will be instrumental in the process of brand positioning. After a company has answered the latter two questions, they need to merge that with consumer preferences and then see where to improve. The consumer is the main determinant of the next direction a company will take and this should be maintained. Communication is vital part of any relationship marketing strategy. Companies need to inform their clients about their new products, services or packages. They also need to find out when their clients would like to get one of their products and in what manner. On the other hand, clients need to inform the company about their preferences. Tennyson has tried to implement these aspects of communication through the issuance of brochures to their clients. They achieved this through their travel agnates. In order to build a relationship with a client, a company needs to conduct market valuation and then do a follow up. (Berry, 1983) Tennyson has done this through assessment of the customers that have been doing business with the company for the past two years. The company then encourages their participation during the next holiday by emailing them a brochure. They have even established quarterly brochures that are designed for particular activities of interest. This is part of what some experts have called the creation of a customer response system. In relationship marketing, first a company needs to initiate a response from a prospective client by sending them a brochure. When the customer responds to the brochure by coming for a holiday, then the company should create another initiative, they should improve their offer to that client next time, if the customer responds then it is an indication that the company is doing the right thing and should continue doing so. But if the response is negative, then the company should try out a different tactic. By doing so, the company will be creating a customer life cycle and a relationship with the customer. Tennyson is well on its way to creating this lifecycle through those feedbacks (brochures). Tennyson has also tried its best to build a relationship by suggesting the issue of ski gurus. This is an important trait for the company to take up since most of its future and present clients indicted that they would prefer a holiday experience that has a lot of room for interaction and socialisation. There is more to holidaying these days than before. Tennyson has tried turning potential clients to real clients through some of its external communications. The latter aspect is quite instrumental in the process of relationship building because this is where the relationship with clients starts. Companies must make sure that they select the most appropriate means of communication which will reach their target audience. Tennyson uses some specialist press like outdoor pursuit, mountain bike UK and yachts and yachting. This ensures that the company reaches some water sport experts and draws their attention. However, there may also be certain clients who may not be experts but would like to become experts or those who would simply like to know more about the sport. For that audience, the company has chosen to advertise its services though national press and online advertisements. For the latter purpose, the company has set up a company website. After communication, a company then needs to engage in what relationship marketers like to call cross promotions. In this type of strategy, companies normally sell products that are related under one package at a discount. (Jackson, 1985) This has been achieved by Tennyson through their early booking brochure. This brochure gives discounts to customers who book early through allowing them to pay less and through giving them additional information about certain activities offered by the company. Such a tactic enhances consumer satisfaction and also facilities better production. On top of this, clients are encouraged to book early and to come back again since the process is based on last year’s holiday. Tennyson is also well on its way to building very good relationships with its clientele through the introduction of its click and call strategy. The company was wise enough to eliminate online booking because this was not personal enough and left a lot of room for mistakes and misconceptions about which products were most suitable for a client. It was therefore necessary to come up with a strategy that will allow discussions between clients directly with Tennyson employees. This has been facilitated by their automated telephone line. The company has improved its customer care in this regard by responding to customer’s enquiries immediately yet at the same time maintaining that personal contact with them. This is quite a commendable effort on their part. Relationship marketing experts assert that when companies have obtained their desired clients, they need to do all it takes to keep them there. They have suggested the use of product promotion tactics, product bundling among others. Product bundling involves offering a number of related services all under once collective price. Tennyson has achieved this through its sponsorship program. Here, the company gives prizes for any equipment that will receive media coverage and will display their company logo. Relationship marketing should involve constant reminders of what is on offer by a specific company. (Levitt, 1983) This is the reason why the company has invested in the payment of journalist’s trips. They are given the opportunity to take fifteen trips very year which the company will take care of. The company also engages in promotions among resort clients themselves. They usually inform them about which places they would visit next. This is topped up by some educational travels given to some of its agents so that they can have ample knowledge about all the available sites. Conclusion Tennyson initially had a haphazard way of managing their customers. But after merging with merry weather, it realised that there was a need for improvement which could be facilitated by some of merry weather’s clients. The company embarked on customer valuation exercises and should use those findings to improve its relationship marketing strategy in the future. However, the current improvements will facilitate future product offerings and will enhance the companies’ relationship with its market. Reference: Buchanan, R. & Gilles, C. (1990): Value managed relationship: The key to customer retention and profitability; European Management Journal Levitt, T. (1983): After the sale is over; Harvard Business Review Butterworth-Heinemann (1991): Relationship Marketing, Oxford University Press Jackson, B. (1985): Build customer relationships that last; Harvard Business Review Berry, L (1983): Relationship Marketing; a journal by American Marketing Association, Chicago Read More