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DISCUSSION 3 REPLY REQUEST 7 days ago Rachel Stewart Forum 3 COLLAPSE Top of Form According to the textbook, there are three elements to CRM. Those are the strategic, operational and analytical elements. (Zahay, 2018) They all need individual attention and expertise to execute customer-focused relationship marketing. In recent years, there has been a huge turning point from product-centric to customer-centric marketing. The customer now expects a personal experience when purchasing a product. This is why traditional transactional marketing is not as profitable as it used to be, and companies are completely changing their strategies. The reason traditional transactional marketing seems more appealing is because it more cost-effective than relationship marketing. This is because it is pushing a specific product or service to the mass media, using a one-way communication. “A component of transactional marketing frequently employed is offering customers rewards based solely on purchasing – including one-time purchases. These rewards can be discounts and coupons motivating customers to purchase a specific product or use a certain service.” (Elledge, 2016) Relationship marketing takes a totally different approach compared to transactional marketing with different objectives and goals. The marketer is now striving to build a relationship with customers in an attempt to build loyalty. Consumers now expect transparency and strong brand values they also believe in from a company. Brands are now so much more than a good product; they stand for something and want to have a relationship with consumers. “Some of the techniques businesses use in relationship marketing include providing consistently excellent customer service, getting to know the individual and anticipating their future needs, and offering discounts and special perks through loyalty programs for repeat customers.” (Harbour, 2019) CRM strives to find consumer habits and preferences to connect with them using analytics to identify trends. The CRM steps are to identify, differentiate, interact and then customize to the specific target. (Zahay, 2018) First, marketers identify customers by their name and address. Next they differentiate them to find what their unique interests, desires, and needs are. The third step is to actually interact with the customer based on those needs are, this is one reason there has been a rise of social media use for businesses. The last step is to customize and tailor messages to be personalized to the consumer. There is more likely a customer will become loyal if they feel connected to the brand. Relationship marketing uses loyalty programs and personalized perks. Transactional marketing uses deals focused on the initial purchase without much follow up enticing a customer to come back. Relationship marketing is more expensive initially, but in the long run when done correctly, it will bring an abundance of more sales. Customer lifetime value is “the net present value of a future stream of net revenue from an identified customer.” (Zahay, 2018) Loyal customers will purchase products from other departments, meaning a company will make more money from one loyal customer than a few one-time purchasers. It pays off to develop a relationship first and reap the benefits from it later. A customer is also more likely to be loyal if they follow a brand’s social media. Through all the connections and customization we will make as digital marketers, we must not become consumed by deceiving and tricking customers. We must use creativity and data to send a realistic message to potential consumers. Romans 16:18 states, “For such people are not serving our Lord Christ, but their own appetites. By smooth talk and flattery they deceive the minds of naive people.” References Elledge, S. (2016). Transitional Marketing. Integrated Marketing Association. Retrieved from https://www.integratedmarketingassociation.org/blog/transactional-marketing/ Harbour, S. (2019). The Difference Between Relationship Marketing & CRM. Chron. Retrieved from https://smallbusiness.chron.com/difference-between-relationship-marketing-crm-57555.html Zahay, D., Roberts, M. (2018). Internet Marketing: Integrating Online & Offline Strategies. Boston, MA; Cengage Learning. Bottom of Form 5 days ago Ian McCarter Discussion Board 3 COLLAPSE Top of Form The importance of relational marketing is it helps the customer to feel like an important part of the company and a listened to member of the transaction. Our text book points out that before the popularity relationship marketing that transaction marketing did not the ability to communicate directly with their customers because of this there was a barrier between businesses and customers. The other issue is customer information was not shared enough creating a disjointed channel of communication between customers and companies. This feeling of ownership to customers made it hard for customer relationship marketing campaigns hard to maintain or make successful. “The reason that CRM requires considerable discipline is twofold. First, emphasized in the preceding section, relationship marketing requires significant changes in the way marketing is done. The emphasis must move from promotional campaigns and marketing research projects to ongoing dialogue on multiple platforms, much of which can be captured and stored in a customer database. Second, it must be treated and managed as an ongoing process, not as a series of discrete events.” (Roberts, CH. 14) however through this pursuit and hard work a customer now feels like an individual in which they will want to support the company. Similar to how communities are supporting small businesses in this COVID-19 time. They are doing so because they have a relationship with the company. But the question is how important is that to retaining customers in larger companies and is the investment worth the payout received. Fruchter answers a large portion of that question in one of their articles “An analytical model is proposed to help determine optimal decision rules for transactional and relational marketing efforts. Some of the main results are as follows: (a) If the seller benefits from the interaction between the transactional marketing effort and buyer’s commitment, then the seller’s optimal decision rules change over time and depend on the level of the partners’commitment. (b) Otherwise, the seller’s optimal decision rules for the two types of marketing are constant over time. (c) The seller should allocate more resources to relational marketing at the beginning of a relational exchange and, later on, should allocate more resources to transactional marketing.” (Fruchter, 1) the proposed benefit of CLV is that over the lifetime of a customer they will spend more money as they are loyal customers however in another article Fruchter found that the loyalty of a customer is generally only as deep as their pockets and if they find a product for cheaper they will go for that one. This is only over come if a significant amount of mutual respect has been built up but only still to a certain degree. “It is only cheaper to retain current customers rather than acquiring new ones if mutual trust between partners overcomes propensities for opportunism and the seller slightly discounts future cash flows.” (Fruchter, 2). Hebrews 13:5 says “Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” Isn’t it great to know that God isn’t worried about what customers are bringing him the most money or how to market to us. He is always there loving us. References: Fruchter, G. E., & Sigué, S. P. (2009). Social relationship and transactional marketing Policies Maximizing customer lifetime value. Journal of Optimization Theory and Applications, 142(3), 469-492. doi:10.1007/s10957-009-9536-1 Fruchter, G. E., & Sigué, S. P. (2005). Transactions vs. relationships: What should the company emphasize? Journal of Service Research, 8(1), 18-36. doi:10.1177/1094670505276629 NIV Bible Roberts, M. L., & Zahay, D. (2018). Internet marketing (4th ed.). Mason, OH: Cengage. Bottom of Form