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Keywords
Relationship marketing, Customer relations, Intellectual capital, Balanced scorecard, Business-to-business marketing
Abstract
This article is about ongoing efforts to come to grips with the question: Does relationship marketing pay? The question is discussed under the umbrella concept return on relationships. Much of what is being done in relationship marketing and customer relationship management has a bearing on both business-to-business and business-to-consumer marketing, and on manufacturing as well as services. Although there is a shortage of empirical research and proven practice, the article aims to show current efforts to generate knowledge of return on relationships, with particular emphasis on business-to-business environments. The article ends with action strategies to improve return on relationships, and a summary of conclusions.
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Sorting out basic concepts and definitions
Most indicators of return on relationships (ROR) are limited to the relationship between a customer and a supplier. But relationship marketing, in a broadened sense, embraces markets, society and internal organization as networks of relationships, within which interaction takes place. It is essential to consider relationship aspects not only in the marketing plan but also in the corporate business plan, thus requiring accounting to rethink its role of mainly furnishing historical financial data to focus more on data for the future.
In approaching relationship metrics, it is imperative to clarify certain concepts and their domains. I define relationship marketing in the following way (Gummesson, 2002a, p. 3):
Relationship marketing is marketing based on interaction within networks of relationships.
Most relationship marketing definitions stress the need to develop long-term relationships with customers and sometimes other stakeholders (Ballantyne, 1994; Grönroos, 2000). Jackson published an insightful book and article on business-to-business marketing (B2B) in 1985 (Jackson, 1985) where she defined relationship marketing by contrasting it with transaction marketing. From her comprehensive research she drew the general conclusion that building long term relationships through relationship marketing should sometimes be the preferred strategy for the industrial seller, but sometimes transaction marketing, the one-shot deal with a short term perspective, should be preferred. She argued that it all depends on the situation. Coviello et al. (1997) identified four types of marketing...