Marketing Principle #3 All Competitors React  Managing Relationship-based Sustainable Competitive Advantage Agenda

Building Relationship Equity

• The process of building relationship equity consists of two main steps:
• A firm needs to develop a strong foundation that supports relationship building and maintenance
• With this foundation, the firm can begin to implement relationship marketing and loyalty programs targeted at specific customer groups, designed to generate specific relational outcomes across the firm’s customer portfolio

Step 1: Developing a Strong Relationship Foundation

• Unfairness and unresolved conflict can undo years and fortunes spent on relationship building
• Counterproductive to increase RM budgets without having a process that deals with customer problems, service failures, or trust violations
• The individual, boundary-spanning personnel with whom customers interact usually are the most critical means to create and maintain strong customer relationships
• Because so many drivers of customer relationships revolve around boundary spanners, sellers need to dedicate their RM investments to selecting, training, and motivating boundary-spanning employees
• Increasing the amount, frequency, and quality of communication with customers also can be effective
• Regardless of the extensiveness of such external communication though, a poor alignment of internal, organizational elements with RM can undermine any effort to build customer relationships

Relationship Marketing Best Practices