Relationship Marketing Strategy

Abstract

The purpose of this research is to understand the impact of relationship marketing strategy on the demand for customized communication through printing. Though many marketing executives report that they are using a relationship marketing strategy, this has not resulted in high demand for variable data printing. Is it a failure of strategy or a failure of implementation? Two exploratory studies are presented to answer this question. First, the foundations of relationship marketing strategy are presented. In particular, the central role of loyalty is discussed as the mediating factor in building relationships with customers. Using the concepts of brand equity, value equity and retention equity as presented in the Customer Equity model designed by Rust, Zeithaml and Lemon, it will be argued that to build retention equity common to most relationship marketing programs, marketers need to understand the relationship from the customer’s point of view. An exploratory study of 160 adults was conducted to determine their preferences for common relationship marketing tactics such as receiving mail from businesses they patronize, getting e-mail notices of sales, joining frequent buyer programs, and use of customer service phone lines. The results indicated that catalogs and direct marketing were viewed very favorably by the respondents. Commercial e-mail messages were viewed somewhat less favorably. There was not a high level of interest in frequent buyer programs. A factor analysis revealed that these preferences combined to form four dimensions representing the different forms of media to communicate with customers: printed mail, e-mail, telemarketing, and face-to-face service. Relationship marketing strategies will be successful if customer communication preferences are part of the customer profile database of a firm. The second exploratory study addresses whether there are infrastructure or implementation barriers to capturing and using this customer feedback. Interviews with executives from an advertising agency, a large printing company that produces direct mail, and an executive from a customer relationship management software company were conducted to determine what are the barriers to implementing personalized print campaigns using variable data? The results indicated that many of their business clients were not able to implement these campaigns because: 1. Their internal databases were inadequate. 2. There were a small number of businesses cases where this level of personalization was cost effective. 3. There was an overall lack of awareness of the range of marketing automation possible with today’s digital printing technology. These barriers must be overcome in order for variable data printing to meet its potential.

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