Transactional and relationship marketing

Transactional and relationship sellingIn this age of modernization and technological advancement matchless must be on realise of the game to succeed in a competitive business market. And to accomplish this task a firm deportulate non only produce high quality products but as well as effectively handle node queries and complaints, which results in maintaining good guest relationship. Two antithetical types of merchandise ascendes have been discussed here. Transactional marketing which foc white plagues only on individual transactions and gives no importance for customer relationship. On the other hand, descent Marketing gives top most importance for building long confinesinal figure customer relationships and concentrates on customer satisfaction. Differences between these two approaches have been provided for bankrupt understanding of the designs. Detailed piece of work has been institute on customer relationship tradement techniques, how it is beneficial for t he organisation, etc. In the end, we lead be discussing the best practices followed by ICICI banking company Ltd, a prosperous and leading organisation in the banking industry.Transactional Marketing is a traditional marketing approach that concentrates only on individual transactions. It mainly focuses on the single change formula, pushing thesales through mass marketing and promotions of the product. It is establish on short period of time, with little or no emphasis on customer returns. It is a theory that includes low- impairment competition, cost cutting, promotion, return on investment etc. They also believe that they cigaret gain market share with only price and customer loyalty is not a major factor.Effective use of the internet succors them to r individu all in ally customers in a cost effective manner. Transactional Marketing is d unitary by the purchase of consumer information in the form of databases. The company hence reaches the consumer by telemarketing, mass e-mailing and other promotional activities. It is not actually popular before long as there is no post sale consulting or avail.Example A sales agent who is assumption commission for each successful sale. He / she tries to persuade the customer to buy the product by describing the features of the product, and then never get back to the customer after closing the sale.http//farm2.static.flickr.com/1146/541909499_13501229b7.jpgIn simple words, we rear end say that Transactional Marketing focuses on maximizing the profit of the company by attracting to a greater extent customers to purchase the firms product.Relationship MarketingRelationship marketing is business sectored with develop and strengthening the relationship with both current and prospective customers. It is more focused on providing the valued products and work to the customers quite a than advertisement and promotion. It differs from other marketing schemes as it aims to value the long term relationship and cust omers contribution towards the business. The main emphasis ordain be on store of existing customers for the long term benefits of the company, not on attracting recent customers on a daily basis. This gives the giving medication a competitive gain over its rivals.The biggest threat any company face is the alarm that their customers could switch to its competitors. But, if an brass follows a good relationship strategy, their customers are less likely to switch to the competitors. Today, companies are trying their best to build long term relationship with the customers, which will lower the cost of attracting new ones. This ongoing process of building and creating new values with individual customers, and sharing lifetime benefits with them is vital and very important for the organisation because it creates the sense of loyalty in customers and long-term profit for the company. Customer loyalty, particularly to a small business is the key to companys survival.Example In banking industry, it is very important to maintain a very good relationship with the customers. More number of happy customers will help in terms of expanding customer base, which will result in more revenue and gaining competitive edge over others in the industry.http//www.cxo.eu.com/media/media-news/news-thumb/100517/customer-relationship- pull offment.jpgComparison between Transactional and Relationship MarketingTransactional MarketingRelationship MarketingShort time scaleLong time scaleFocus on single saleFocus on retention of the customerNo importance to customer serviceTop priority for customer serviceOrientation to product featuresOrientation to customer valuesLimited payload towards customersHigher commitment towards customersFocus on product quality piece of music productionEnsure product quality in all aspectsNo post sale consulting or servicesFollow up after sales to ensure customer satisfactionMechanical and production oriented business flummoxMore humanistic and relationshi p based business modelIn conclusion, we can say that Relationship Marketing is a overmuch more cheap approach in terms of a companys budget as it focuses on current customers and prospective clients rather than blindly searching for individuals who may have no interest in the product or services offered by the company.http//courseware.finntrack.eu/images/RelationshipMarketingIsNotJustLoyaltyPrograms.jpgCustomer Relationship ManagementCustomer Relationship Management (CRM) is a comprehensive approach for creating, maintaining and expanding customer relationships. An excellent customer relationship management is at the heart of every business success. With CRM, you will easily understand customer requirements, meet those require effectively, predict market trends and enhance your bottom line. A good CRM will help the business to become more efficient and effective.CRM is the strategic use of Information, processes, engineering and people to manage the customers relationship with y our company (Marketing, sales, services and support) across the whole customer life cycle. CRM will help the business to improve customer satisfaction, ontogeny staff productivity, slash operational costs and maximize the effectiveness of each customer fundamental interaction.CRM programs enhance the customer-friendly services by automating all proceedings and procedures in a company. All CRM establishments are primarily large customer databases capable of storing all customer information such as customers name, address, customer contacting method, ability to spend notes on products, money spending per visit etc. The specific programs built in these systems integrate the stored data on demand to identify good customers and help to create better service plans for them.The finest CRM system chiefly computerizes the customer service process and also makes it more competent and user friendly. Customers can effortlessly fly their way to the exact information, so that personal exchan ges such as phone calls, emails can be put away for, out of the ordinary situations.http//www.masternewmedia.org/images/customer_relationships_management_handshake_id180610_size485_b.jpgThe key to targeting new customers is relatively straight forward, holding onto them is another thing altogether, and this is where good customer service plays an important role. Taking all the efforts to keep a client happy, will vastly improve the chances of them returning with their custom in the future.Effective CRM is central to any successful business. In short, it is the process a company follows to track and rig out its current customer base. If implemented correctly, a holistic CRM approach can help businesses of all sizes to make better informed marketing decisions, offer more efficient customer service and support and, ultimately, create shorter sales cycles.CRM software enables companies to proactively create sales that otherwise may not have happened. And ultimately, the long term succe ss of any business will depend on the effectiveness of their overall customer relationship management strategy.Success of any business small, spiritualist or large greatly depends on customer satisfaction and the manner in which an enterprise makes attempts to cater to client requirements and boost customer relationships. It is herein that the concept of CRM becomes vital to win customers and sustain their yield.Benefits of CRMCustomer Satisfaction Using CRM, marketing, selling and servicing your customers will be organized and systematic. As every customer interaction is done in a consistent way, your business exceeds customers expectations. A strong-implemented CRM will increase customer satisfaction. A Customer Relationship Management for your company is a worthwhile investment and a smart solution to keep your business stay competitive. Today, CRM programs have become the most effective tools for all marketing and service providing companies to enhance their customer satisfa ction.Increased Revenue CRM will result to shorter sales cycles because of efficient management of accounts and orders. This will then naturally encourage business growth and long term profitability as the number of customers increase and opportunities are maximized. In the cut throat environment of modern times, a CRM system then emerges as a valuable tool to help build customer loyalty. CRM as the acronym suggests is all about managing the customer. If the customer is managed in an effective manner, the profit on a continuous basis is the logical by-product. A business can generate profit only when it has a committed and faithful following of customers.It does not matter whether your business is small, or you are running a large business, the longevity of your business relays on the information you acquire about your customer. Profits can be maximized first and foremost on a continued basis by having retaining satisfied customers. It can be done only through a personal feeling. T his personal touch can be ensured through maintaining a database on the needs and preferences of your customers. Building a relationship of trust and understanding by geting their needs and wants will help you and your customer develop a long term relationship, or more importantly, partnership.Reduced costs Through the use of CRM, work and activities become systematic and coordinated. This will eliminate waste of funds and leads to reduced labour costs. CRM solution providers bring in healthy solutions to enable companies to better serve their customers and recognize their target customers, manage marketing campaigns and generate quality leads for the sales team. Statistics reveal that expenditure is much higher in acquiring a new customer than to retain an existing one. This can be guaranteed by tutelage a database on the requirements of your customers. CRM system allows you to have a better handgrip on your customers. This in turn saves a lot of time and money thereby by being twice as more beneficial to your concern than any other similar system.Why CRM is crucial?CRM is an effective tool to take the business forward as it helps to evaluate the companys customer base and manage their customer data efficiently and effectively. It is required to have a proper planning and a strategic device to expand their footprint as well as retain their old customers, while also winning new clients CRM becomes imperative in the current situation. CRM also helps businesses to simplify sales and marketing processes, while also reducing costs.http//www.thebmrant.com/wp-content/uploads/2009/03/crm-12.jpgThe main objective of CRM is to maintain a better understanding of the customer requirements and manage customer relationship through the use of software, Web-based consolidation of business processes and methodologies. Besides, CRM programme provides a swift mechanism to monitor all contact points between a client and the company, thereby reducing the hassles of handling c ustomer complaints.Loyal Customers are Most Important Profit DriversBest customers, allow you to earn your acquisition cost and generate a positive return on investment. The longer you keep them, the more positive your returns will be.Loyal customers are more likely to buy more things from you. They dont have to be sold as hard because they understand your value proposition and, since they have a relationship with you, they are more likely to see your marketing, which increases revenue and profit, and reduces acquisition cost.Loyal customers will pay a higher price. They understand your product and see its value. You dont have to bribe them to buy again. This further improves the profitability of the company.Experienced customers cost less to service. Because they know how your product or service works. All this reduces your cost, which improves profitability.Loyal customers will happily tell their friends and associates about your product. This brings in more great customers with n o acquisition cost.http//images04.olx.com.ph/ui/13/95/62/1300216362_177789362_2-Pictures-ofBuild-Your-Business-With-Loyal-Customers.jpg http//themarketbureauwebsite.businesscatalyst.com/images/blog/growth2.jpgImpact of CRM on Marketing and Operations of an OrganisationThis view of CRM completely changed the trading operations of the organisations. Companies became more concerned about keeping the existing customer than searching for new ones. This new dimension of marketing changed the entire approach, companies changed their marketing strategies, and every customer is several(predicate) than other, so each one is being treated differently. Different CRM strategies are used by the companies, which allow them to identify their best customers, try to satisfy their needs and continuously increase their level of satisfaction and take them up to the loyalty level.CRM has affected the marketing of the organisation in a sense that it made organisations to change all its marketing strateg ies and operations. CRM based organisations are concerned about the customers. Organisations now attempt to define the characteristics of the best customers, estimate their lifetime value, and are changing their marketing strategies accordingly. CRM system is mostly technology based, and it affects the customers behaviour a lot, if it is not implemented properly.CRM has a huge impact on marketing of the organization. It has almost shifted the focus from mass marketing to individual customer. Managing each customer relationship is the heart of CRM, while traditional market metrics hardly allowed the companies to make operational decisions that affect individual customers. CRM helped the organizations to improve its mass marketing and campaign measures. These retention campaigns cost a lot but its very effective in longer run. Furthermore, having a regular client base also alleviates a lot of the pressure that comes with continuously having to target new customers, which is not only c ostly and time consuming, but there is no guarantee how much revenue any new marketing initiative will generate.http//www.divessi-indo.com/images/loyalty-cycle.gifBy having access to customers detailed buying history, its possible to offer related products and services. Known as cross-selling, this is an extremely effective means of generating additional revenue. Then there is what is known as up-selling, which is where the customer is encouraged to buy upgrades or add-ons at the point of sale. tralatitious marketing approach was more focused on the sales while CRM has a view of long-term relationship with the customers. This idea of retaining the customers made huge changes in spite of appearance the organizations and changed its marketing and operations.Organisations started building and maintaining databases of the customers information. CRM made businesses more conscious about customer services, acquiring and serving the customers, increasing their value towards the company, r etaining good customers and determining which customer should be retained or given a higher level of services.Businesses today put a lot of efforts on analysing the purchasing behaviour of the customer they manage several databases where they keep records of each customer. According to the information each customer is targeted separately. Different schemes and campaigns are being organized by the business to retain the customers. These schemes include different promotions to create a sense of loyalty among the customer. Like different newspapers give a free copy to its regular customers.http//securitysystemprice.com/images/opfso-2.jpg http//t2.gstatic.com/images?q=tbnANd9GcSbDzvInkO7kX_1BM9EIfTILUYrMayXiYqzJKgmmVjN5SsYzG5goAt=1A CRM system could run better if the organisation have the right employees, who have knowledge of the CRM system, so organisations now have to spend more on training the employees and make them aware of the system. CRM system is more or less technology based s o certain tools should be upgraded continuously like Web Pages. Organisations now scarper to make databases of the customers, which have increased the burden because this approach of one-to-one marketing and customer loyalty expects a lot.With the implementation of CRM system in the organizations, their marketing strategies seemed to be customer centric (striving to create the customer loyalty rather than making new customer every time) and focus is being given to one-to-one marketing, rather than mass marketing. Today, organisations are more customer centric. In simple worlds organization makes sure that its customers could easily contact it. The best example of customer centric organization could be Amazon.com. They have personalized web pages with wide range of products to select, the low price lead towards the customer loyalty and a long-term relationship of Amazon.com.One-to-one Marketing It is also expressed as 11 Marketing. Its a CRM strategy which emphasis on personalized i nteraction with customers. It is thought that this personalized interaction will grow customer loyalty and will give a better return on the marketing investments. This one-to-one marketing term could be new but the approach is quite old. And its been taking place since the commerce came into existence. For example the owner of a grocery store would naturally take this one-to-one approach while dealing with customers, i.e. remembering the customer details about their preferences and their characteristics and ultimately providing the services based on that knowledge.http//www.websitepromotionsltd.co.uk/images/customer-focus3.jpg?__SQUARESPACE_CACHEVERSION=1295915031625 http//kiranmendekar.files.wordpress.com/2010/06/customer_focus.jpgIn Conclusion, we can say that CRM has given organization great benefits in terms of improved marketing methods, customer retention, a growth in the market share and an analysis of customer profitability. CRM provides the organization with a sustainable c ompetitive advantage. CRM is the comprehensive approach of creating and maintaining long term relationships. This one to-one marketing approach has impacted a lot on different aspects of the organization this is more technology-based approach to stay in touch with customers, striving to make them loyal with the company. Due to this relation maintaining approach, companies have also affected in terms of their marketing strategies, and their operations. Companies have to change all of their previous strategies and start working on this new approach.http//www.awinsjclarke.com/wp-content/uploads/diag_serv_crm2.gifCase Study Best CRM Practices followed by ICICI Bank LtdCRM at ICICI involves increased communication between the bank and the customers. ICICI believes that a true customer-centric relationship can only be accomplished by considering the unique perspectives of every single customer. ICICI also believes in one to one marketing strategy by tracking complete customer life-cycle history. Effective use of Cross interchange technique helped the bank in terms of generating more revenue.Implementing CRM at ICICI BankBusiness Focus There are various components of CRM like customer information, sales, marketing trends and marketing effectiveness that acted in tandem to improve relationship between ICICI and its consumers. ICICI captured customer data and analyzed them while dealing with customers at these very touch points. A CRM solution from Siebel was implemented for the automation of customer handling in all key retail products of the Group. The solution allows customer service agents to track all customer complaints and requests. It also allows target setting and centralized tracking of turnaround times for request fulfilment. The bank has also undertaken a retail data warehouse initiative to achieve customer integration at the back-office. This central view of the total customer relationship is being used extensively for identifying opportunities to cross- sell new products and services to the existing customer base.Technology Focus ICICI Bank continues to leverage information and computer technology as a strategic tool for its business operations to gain competitive advantage. Its technology strategy emphasizes enhanced level of customer services through 247 availability, multi-channel banking and straight through processing, and cost efficiency through optimal use of electronic channels, wider and focused market reach and opportunities for cross-selling. The Technology Management Group (TMG) is the focal point for the ICICI Groups technology strategy and Group-wide technology initiatives. This group reports forthwith to the Managing Director CEO. A key to ICICIs success has been its ability to harness business information to CRM initiatives that have fuelled growth and helped attract more than 30 million customers.http//www.foxif.com/wp-content/uploads/2011/02/ICICI-Bank.jpg http//thezerolife.com/kobnaghar/wp-content/uploads/ICIC IBankCustomerFirstTheZeroLife.Com_thumb.jpgComponents of CRM cycle per secondUnderstand and DifferentiateOrganisations need to understand their customers in order to have a relationship with them. ICICI understands every individual and offer products and services based on their learning.Develop and CustomiseIn a customer-focused world, Organizations are increasingly developing products and services, and even new channels based on customer needs and service expectations. ICICI believes that the extent of customization should be based on the potential value delivered by the customer instalment.Interact and DeliverICICI is strongly of the opinion that value is not skillful based on the price of the product or the discounts offered, but are based on a number of factors including the quality of products and services, convenience, speed, ease of use, responsiveness, and service excellence. dramatize and RetainThe more ICICI learns about customers, the easier it is to pinpoint those tha t are producing the greatest value for the organization. They aim to continue to learn more about each customer segment and use it for successful customer retention. As ICICI moves step further in CRM they hopes to gain insight and understanding that enhance the subsequent efforts. Successful customer retention is based on the organizations ability to constantly deliver the best services to its customers.http//cdn.information-management.com/media/editorial/dmreview/199911/199911_060_1.gifWe can say that ICICI Bank has achieved this level by way of focused and customer centric approach using various customer relationship management techniques. CRM plays a vital role for organisations growth and success. Effective use of the latest and proven CRM techniques will help organisations to be competitive in this changing world.http//www.gwtindia.com/wp-content/uploads/2010/08/crm_internship.jpg