This essay is a critical literature review of Relationship Marketing (RM) in relation to customer satisfaction and customer loyalty. In this review, I will provide a brief orientation of relationship marketing; identify the different dimensions of RM and critically analyse the concept of RM with regards to customer satisfaction and customer loyalty.
Leahy (2011:651) defined RM as ‘attracting and keeping customers for a long period of time’. RM is used by firms to change consumer attitudes and increase the frequency of purchase in a business using marketing techniques such as promotions and advertising. According to Ndubisi and Chan (2005), RM provides an organisation the opportunity to think beforehand in order to get access to the right information about their customers, meet the customers’ needs effectively, efficiently and gain competitive advantage how does thnking beforehand help aquire this?. As a result globalisation, Geddie et al. (2005) viewed RM through the prism of technology, businesses have the opportunity to store vital information in their database concerning customers’ shopping habits, thus using the data to render a better customer service and establish a long-term sustainable relationship with customers; perhaps resultant in increased customer satisfaction and loyalty. Peppers et al. (1999) referred to relationship marketing as ‘one-to-one marketing’ and suggested that businesses must be dynamic and fast in their approach and response to individual customers’ needs that are ever-changing and unpredictable. Therefore, organisations must be prepared to provide bespoke products or services that meet individual consumers’ needs at the time the products are requested (Peppers et al., 1999 and McIlory and Barrett, 2000).
The benefits of RM for an organisation include higher customer satisfaction, reduction in customer promiscuity which leads to higher customer loyalty. Additionally from a financial perspective; RM causes a reduction in business transaction costs prompting increased efficiency in the general business operations, which consequently adds value (Peppers et al. 1999 and Ndubisi and Chan 2005). In all, lower business transaction costs translate to higher revenue for the organisation. (this author says.......RM is not beneficial to firms bcos.....)
WHAT ARE THE BENEFITS OF RELATIONSHIP MARKETING TO THE CUSTOMER? (supporting and opposing views)
RM highlights the links between customer loyalty and customer satisfaction, profitability and customer retention (McIlory and Barrett, 2000). Customer loyalty may be attributed to an organisation having cultivated a close relationship with their customers leading to customer satisfisfaction with both products and services they recieve. As a result, customers become increasingly loyal and are aware that if any issues arise, it will be dealt with swiftly and in a satisfactory manner. (Try to find Journal or prople to back up your point and maybe one that argues against it aswell)