Relationship Marketing Essay
Example of a Relationship Marketing Essay To begin, I'd like to state that the banking services business in the United States and internationally has recently seen a great deal of dissatisfaction with traditional marketing. Despite the fact that demand for various financial services is low, the field's rivalry is growing. As a result, financial service providers scrambled to find new marketing tactics, including the notion of Relationship Marketing, in order to compete for their markets and improve their competitiveness (RM). The concept was created in 1983 by American academics with the goal of improving customer loyalty and overall financial performance of consumer-facing businesses. It is founded on the idea that customers should be handled based on their unique requirements and preferences.
Relationship Marketing has largely replaced the 4P (Product, Price, Place, Promotion) marketing tactics that have proven ineffectual in most service industries, including banking. RM emphasizes the constant process of relationship development, whilst the latter focuses mostly on discrete tasks. Furthermore, previous 4P theories proven unable to meet customer needs due to process oversimplification, lowering the importance of the whole organizational philosophy. It's also worth noting that the transaction-based strategy was discarded in favor of market segmentation and market targeting, which led to the development of the one-to-one marketing idea (McKenna, 90).
Customer attraction, in contrast to the transaction-based approach, is merely the first step in the process of customer relationship management https://essaywriterfree.net/management-assignment-help/management assignment help , according to RM. Companies who recognize that attracting new customers has a substantial impact on their balance sheets aim to boost client retention. As a result, Relationship Marketing is focused with attracting new customers, maintaining existing customers, and improving customer relationships.
Building customer databases with up-to-date, relevant, reliable, and accurate information; specifically planned communications based on target audience characteristics mostly extracted from the database; high level of service and consistency; customized service that incorporates the sat (Pelton, 54).
It's also vital to examine the shift from price rivalry to non-price competition, which is strongly reliant on customer contact and the company's image. Financial services companies who operate in the intangible products market must understand the value of customer connections.
As a result, the RM model is based on the following concepts (Payne, 75):
Customers have a life value given to them.
Customers must be communicated with in a two-way manner.
Each customer's encounter should be highly tailored to his or her wants and preferences, taking into consideration the details of the situation. As a result, in order to successfully execute the RM model, a company must have a sufficient pool of human resources willing to accept this mindset and develop marketing strategies to match.
However, a recent poll of marketing experts revealed that many respondents still chose to use a product-based approach, while others saw Relationship Marketing as just an extended and well-designed traditional marketing method with the use of information technology. As a result, it was concluded that a wide range of financial services organizations fail to broaden the scope of their activity beyond theory by ignoring the cultural implications of Relationship Marketing (Peter, 191).
Let's look at the activities of a regional Spirit Bank in Oklahoma in order to obtain a better grasp of RM applications. The reason I chose the smaller banks is that they are often less efficient than the larger banks, providing us with an opportunity to apply our Relationship Marketing talents. The institution under discussion in this article has a tiny operating volume and employment base: $430 million and 250 bankers, respectively. Deposit services, SBA and business loans, equipment leasing, and cash management are just a few of the services offered by the corporation. Spirit Bank is a small and midsize business bank with thirteen branches in twelve Oklahoma cities. The institution, in particular, provides an Internet presence on both a local and global level in the sphere of on-line selling services. Nonetheless, I must point out that Spirit Bank does not regard doing business on a worldwide scale to be the most critical concern.
As a potential customer, I went to the company's website which was the first, quickest, and most likely easiest approach to learn about the bank. Furthermore, a company's website serves as a means of communication with its clients. The portrait of a chairman is one of the positive qualities, as it provides the required atmosphere of trust. In addition, the site's information is well-organized and integrated. The style might be described as simple and inviting. Customer needs are prioritized, and the bank is ready to help with any financial difficulty at any moment, thanks to a 24-hour customer support service available via phone and in any branch on a daily basis.
After reviewing their website, I called their bank and had a cordial conversation with Casey Tripp, who can be reached at (918) 712-9292, about the bank's marketing plan. This essay would not have been possible without the 13-minute interview.
The Spirit Bank has a number of subsidiaries around the United States that offer a variety of broker-dealer, investment banking, financing, wealth/asset management, consulting, and lending services. Individual investors, enterprises and corporations, financial institutions, and local government agencies are among the clients served by Spirit Bank.
The main problem of the company's website, however, is that it appears too simple for a financial institution, with improper visuals. Furthermore, the amount of information provided is insufficient to satisfy a potential customer, considering that small and medium-sized enterprises require thorough data and procedure descriptions in order to make the best selection. Rather than inviting clients to visit the local location, it would be more prudent to provide a complete information sheet for each service offered. In addition, a product-oriented approach can be seen (Gordon, 133).
The Spirit Bank has a lot of work to do to improve its services, and relationship marketing is likely to help the company out and improve the standard 4P strategy. Relationship marketing is currently regarded a very new tactic at Spirit Bank, and it may not work with tiny banks, which, like Spirit Bank, are obsessed with cost-cutting measures. Spirit Bank, in my opinion, is overly cautious in its procedures and will not invest in something new unless it sees other banks doing so for several years and reaping the benefits. Spirit Bank is hesitant to take the initial step, despite the fact that this strategy appears irrational for a tiny bank that must take more risks than large banks to catch up with the volume and services supplied by large banks.
Spirit Bank, on the other hand, is a bank that tries to foster business innovation and is likely to require more complex Database Marketing and Interaction Marketing tactics, emphasizing the value of information.
Banks like Spirit Bank rely too heavily on technology and are thus too rigid to function effectively in the financial market, which, along with risk aversion and unwillingness to change, inhibits Spirit Bank of Oklahoma from achieving ultimate leadership status.
It's important to highlight that integrated marketing communication (IMC) is a thorough, coordinated, organization-wide effort utilized by firms all over the world to convey mission-critical values and messages in ways that target audiences notice, accept, comprehend, and respond to. Integrated marketing communication https://essaywriterfree.net/, unlike traditional marketing, focuses on data-driven business segmentation, message integration, coordination, and assessment. Integrated marketing communication, like relations marketing, is a relatively new business idea that aims to integrate all components of marketing communication, such as advertising, public relations, sales, direct marketing, promotion, and publicity, rather than working separately.
IMC acknowledges the necessity for the additional value generated by the IMC strategy, which evaluates the coherence of work of various marketing communication disciplines such as public relations, advertising, promotion, direct response, and so on. Then IMC would give management the necessary and concise communication brief.
In the case of Spirit Bank of Oklahoma, integrated marketing communication consists of four distinct steps that the bank must establish in order to take advantage of integrated marketing communication, which would result in higher market share, productivity, and improved financial ratios:
Communication coordination on a tactical level. Communication's scope is being redefined. Information technology is being used. Integration of financial and strategic aspects. The four processes outlined above would enable the Spirit Bank of Oklahoma to plan, create, implement, and evaluate a variety of coordinated bank SMART initiatives with its customers, as well as internal and external audiences. It's worth noting that the internet is an essential component of the IMC because it allows the bank to assess the performance of its initiatives in behavioral, not just attitudinal, terms. As a result of IMC, the bank is able to concentrate on strategic marketing communication (two-way) rather than promotion.
When it comes to recommendations, it's important to note that Spirit Bank must first fully comprehend the use of Relationship Marketing before implementing it. In order to improve its products and services, Spirit Bank should seek to attain the following two goals. Spirit Bank needs to grasp the concept of value that RM generates, which is highly valued by customers. Spirit Bank also has to improve its information systems in order to develop and maintain a thorough awareness of its customers' current demands and behaviors. Spirit Bank should keep in mind that RM would not exist without obstacles to conquer. To properly execute the RM principles, the bank must modify its organizational perspective on individual consumers, their requirements, and desires.
As a result, Spirit Bank should recognize that investing in a new database would be ineffective, and that success will be determined by the following factors:
The dedication of senior management. An increase in the amount of money spent on employee/personnel training. Investment in corporate IT and information systems has increased. While Spirit Bank has made some success in database creation, customer segmentation, and cross-selling, it still faces a number of challenges. Spirit Bank has yet to grasp the concept of measuring client profitability and still views most of its customer connections as one-way (from Spirit Bank to the customer), making it impossible for the bank to provide individualized services.
The current state of affairs at Sprit Bank clearly demonstrates that the bank has the following flaws that prevent proper execution of the RM:
There is a lack of knowledge on the customer's requirements. There is a lack of data on the client lifetime value. Last but not least, Spirit Bank must accept the concept of the RM philosophy in order to appropriately appraise the situation and gain from it.
The following areas should be given top focus by Spirit Bank:
Recognize the importance and supremacy of information. Spirit Bank must evaluate what clients require and how to provide those demands. Develop a cutting-edge, state-of-the-art information system that allows for two-way communication between the bank and its customers, hence increasing interaction. Consider the consumer to be king, focus on them, and value their experience. Create a marketing department that is process-based rather than function-based to work well in today's dynamic marketplace. Set SMART (specific, measurable, achievable, relevant, and timely) goals for the Spirit Bank in terms of fostering long-term customer loyalty.