Customer Relationships
Overview
The Principles of Marketing textbook contains fifteen modules—roughly one module per week for a 16-week semester.
We recommend NOT doubling up the following modules, because they are long and especially challenging. Students will need more time for mastery and completion of assignments.
- Module 4: Marketing Strategy
Outcome: Customer Relationships
What you’ll learn to do: explain how the development and maintenance of customer relationships are an essential part of an organization’s marketing strategy
If you are getting the impression that an organization’s planning around marketing strategy, tactics, and objectives is very complex, you are perceptive. There are a lot of variables for companies to consider, align, and track, and occasionally an important part of the planning process gets overlooked: the customer. In this last section, we’ll return to the customer and explain why customer relationships are such a crucial part of the marketing strategy and plan.
Let’s pause for a moment and put the customer into our discussion of market growth opportunities. We discussed the market for high-end skin-care products for older Americans. Imagine the woman who might buy a Proctor & Gamble antiwrinkle cream. She is standing in front of a shelf of products and chooses Proctor & Gamble’s cream. Who is she? Why is she there? What is her story? Our customer is hoping to stop the aging process and it is a personal, vulnerable moment. She doesn’t care about the SWOT analysis or the size of the market. She wants to find a product that “understands” what she needs and helps her.
In this section you’ll see how marketers address such issues and keep the customer at the center of the planning process in a very personal way.
The specific things you’ll learn in this section include:
- Describe how businesses use buyer personas to better understand the target customer
- Define customer relationship management
Learning Activities
The learning activities for this section include the following:
- Reading: Customer-Relationship Strategies
- Video: Harley Davidson Customer Relationships
LICENSES AND ATTRIBUTIONS
CC LICENSED CONTENT, ORIGINAL
- Outcome: Customer Relationships. Provided by: Lumen Learning. License: CC BY: Attribution
Reading: Customer-Relationship Strategies
A situation analysis can reveal whether a company’s relationship with customers is a strength to be exploited or a weakness that needs to be addressed. In many cases it’s a bit of both. For instance, a company might have loyal customers in one demographic but fail to hold the attention of customers in another demographic.
The question, then, is how do companies evaluate the quality of their customer relationships, and what approaches do they use to develop and maintain strong customer relationships? We will explore the answers to these questions in greater depth throughout this course. For now, we’ll touch on an approach that companies use to incorporate their customers in strategic planning and some of the tools they use to connect with them.
Buyer Personas
The basis for a strong relationship is getting to know and understand someone well enough to form a connection. The same is true for company relationships with customers. The trouble is that companies rarely have a chance to personally connect with individual customers—much less with all of their target customers.
Marketers use something called “buyer personas” to get a more accurate picture of the customers they’re trying to connect with and also to help them think of customers as real people. Buyer personas are fictional, generalized representations of a company’s ideal, or typical, customer. They help the marketer understand current and potential customers better. As a marketer, knowing whom you’re trying to reach and attract makes it easier to tailor your content, messages, product development, and services to the specific needs, behaviors, and concerns of different groups. For example, instead of sending the same email message to all potential customers, marketers will create a unique message for different buyer personas that aligns better with their personal interests and values.
Typically, a buyer persona will have a name and a story, as in Figure 1, above. The story will include information about how the persona spends her time and details about her interests, her concerns or fears, and her goals. Often, the write-up will explain what the persona wants from the company and its products to help marketers to use the information consistently. Each of these details helps the marketer focus on developing relationships with real people, and that results in a more personalized marketing plan.1
The strongest buyer personas are based on market research—both the information that is broadly available and information the company gathers through surveys, interviews, and observations of customer behavior.
LICENSES AND ATTRIBUTIONS
CC LICENSED CONTENT, ORIGINAL
- Customer-Relationship Strategies. Provided by: Lumen Learning. License: CC BY: Attribution
CC LICENSED CONTENT, SHARED PREVIOUSLY
- Sample User Persona Drake Motors Ltd. Authored by: Daniel Eizans. Located at: https://www.flickr.com/photos/deizans/5525707263. License: CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives
- I Like Facebook. Authored by: Charis Tsevis. Located at: https://www.flickr.com/photos/tsevis/6963815105/. License: CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives
Video: Harley Davidson Customer Relationships
Once a company understands its buyer personas, how can it match those to real people who will buy its products or services? Today, companies use significant amounts of data and complex technology systems to create the right match in what it offers to individuals and groups of buyers.
The American Marketing Association defines customer relationship management in the following way:
A discipline in marketing combining database and computer technology with customer service and marketing communications. Customer relationship management seeks to create more meaningful one-on-one communications with the customer by applying customer data (demographic, industry, buying history, etc.) to every communications vehicle. At the simplest level, this would include personalizing e-mail or other communications with customer names. At a more complex level, customer relationship management enables a company to produce a consistent, personalized marketing communication whether the customer sees an ad, visits a Web site, or calls customer service.1
Customer relationship management brings data and technology together with the marketing mix to increase the personal connection with the customer. Let’s look at an example. Harley Davidson has a famously strong brand. This video provides a glimpse into the relationship that customers have with the brand and shows how a new technology is assisting the company in expanding its connection with customers.
You can view the transcript for “Harley Davidson – Community, Brand, IBM” here (opens in new window).
What are some elements of the Harley Davidson buyer persona?
How is technology being used for customer relationship management?
Key Terms
Buyer persona. Fictional, generalized representations of an ideal customer that help a marketer understand current and potential customers better.
Customer relationships management. A discipline in marketing combining database and computer technology with customer service and marketing communications. Customer relationship management seeks to create more meaningful one-on-one communications with the customer by applying customer data (demographic, industry, buying history, etc.) to every communications vehicle.
LICENSES AND ATTRIBUTIONS
CC LICENSED CONTENT, ORIGINAL
- Video Introduction. Provided by: Lumen Learning. License: CC BY: Attribution
ALL RIGHTS RESERVED CONTENT
- Harley Davidsonu2014Community, Brand, IBM. Authored by: Chris Sparshott. Located at: https://youtu.be/iOF7aAVZMqA. License: All Rights Reserved. License Terms: Standard YouTube license