Abstract
Previous research on relationship building has characteristically paid attention to defining its potential as a vital business tool. The purpose of this paper is to investigate how effective relationship building practices can enhance a company’s customer base and enable the company to sustain a competitive edge over its business rivals.
Although extensive research in this area is limited, appropriate theories and conclusions in the fields of sales and marketing have been are synthesized to develop a better understanding of how effective relationship building may lead to improved relationships between organizations and their customers hence sustaining the business’ competitive edge.
Based on a review of the empirical literature, several gaps and opportunities are uncovered. The resulting research agenda should be particularly valuable for marketing researchers interested in discovering the impact of relationship building as a useful tool in consolidating and sustaining a loyal customer base.
Introduction
This study has been sanctioned by the Marketing manager of Ultravetis company limited with the full blessings of the company’s chief executive officer. The company specializes in the production and sale of veterinary medicine and various other animal products.
The company has been recording impressive turn over for quite some time but with the entry of new competitors in to the market, there is growing concern that the company needs to change its mode of operations both in production and marketing so as to maintain a competitive edge over its business rivals.
Since the company had already put into place measures that ensured production of quality products, the manager felt that only a vigorous marketing of these products would ensure that the sales do not slacken.
I relished the prospect of applying my vast experience as a communication consultant to study the situation as it was in the company and then come up with innovative ways in which the company would capture its aspirations in maintaining a competitive edge over its rivals.
Problem statement
The problem which will be addressed by this study is the extent to which relationship building adds value, enhances the company’s brand and position against competition from emerging business rivals. I will attempt to mirror the present building relationship strategies that the company has adopted against expected changes in marketing trends.
This way, I will be able to identify the areas that need to be strengthened and those that need to be rolled back altogether. To capture the advantages that advance in technology presents today, I feel that the company will have to adopt new relationship building strategies that will improve its competitive edge with the use of technology.
Formulation of Research questions
The questions to be addressed main area of concern is to find out the best fit between the relationship building strategies a company adopts and its aspirations towards capturing and maintaining a sound competitive edge against its business competitors. Various questions were advanced and these included;
- What communication strategies has the company adopted to build, sustain, and enhance its relationships with its customers/ clients/ stakeholders?
- How much has the company benefited from such relational communication (or business networking)?
- Are there any cultural or diversity issues that affect relational communication (or business networking)?
- How has the company managed its business relational networks?
- What could the company have done to maximise the positive sides of relational communication (or business networking)?
Significance of the study
While the search for further findings about the impacts of relationship building towards enhancing and sustaining a sound competitive edge against business rivals should continue unabated, it should not preclude the necessity associated with gathering vital information which would also try to shed some light into ways in which modifications can be effected on existing communication strategies so as to adopt to new emerging trends that are a consequence of advances in technology.
Hence empirical assessments should be done to determine how ineffective communication strategies can be rolled back and new effective ones formulated and implemented. A proper understanding of all the dynamics involved in the formulation of a company’s communication strategies will go a long way in ensuring that the company consolidates a satisfactory customer base and that there is also the potential to tap into new emerging markets.
Scope of the study
This study will confine itself to the Marketing department of Ultravetis Company limited since it is the department that is mandated to oversee all the company’s sales endeavors. It is also the department’s prerogative to formulate and implement the company’s communication strategies towards its customers.
Specifically the study will confine itself to gathering vital information from employees in this department and will also get some feedback from some of the company’s regular customers. Input from the company’s board will also be encouraged.
Limitations of the study
The following are the limitations that posed a challenge to the researcher:
- Budget Constraints. The researcher experienced shortages in funds since his budget proposal had not anticipated the global economic crunch experienced mid way through the research.
- Time limitation. The researcher had to rush his study to avoid running into winter where most of the employees will be in holiday.
Some of the employees interviewed were timid and hence did not provide significant information. The reason for their timidity was out of fear of victimization.
The above illustration helps to demonstrate why relationship building is very important in ensuring that it is not only vital in consolidating but also in sustaining a company’s customer base. The amalgamation of these elements illuminates clearly the importance of relationship building in setting in place a scenario whereby the company’s competitive advantage over and above its competitors is maintained ;
- Embrace of technology. With advance in technology and especially in information technology, organizations are increasingly being placed in a position whereby they are able to install processes which make sure that they are in constant communication with their customers. This is a big plus towards attaining effective relationship building practices. For instance the use of internet is enabling companies to install computer assisted client tracking systems.
- Creation of worth brands. Through the production and distribution of high quality goods and services, a company is assured of a loyal customer base.
- Relationship marketing. Companies are increasingly becoming are that it is of paramount importance for them to create and develop core services around which customer relationships are developed. This will ensure that specific needs of particular customers are catered for. This in turn translates into making sure that while the regular customers are retained, those that are uninterested are coaxed and persuaded to pledge their loyalty to the specific customer.
- Outsourcing. Being in possession of large stocks of knowledge accumulated over a significant period of time, companies are now delegating some of their core activities to some offshore external partners. This way, their clients are able to access huge amounts of information about the products and companies of their choice. Hence, this is a fertile ground for the promotion of relationship building of a company and its customers.
Review of Literature
Various studies have carried out to try and come up with new knowledge in communication strategies. Communication strategies take various forms; hence it is a component of various products, for instance relationship marketing. This is attracting, maintaining and in multi-service organizations enhancing customer relationships (Berry, 2004).
Berry has gone ahead to emphasize that it is not only imperative for an enterprise to attract new customers but it is also of paramount importance for these enterprises to congeal their relationship with these customers, strive to lure and transform the uninterested ones into loyal customers and also aspire to serve the customers as clients. Berry has observed that in order for a business to have effective relationship marketing practices, it must aspire to do the following.
Develop a central service around which to develop customer relationship, tailoring this relationship to satisfy the specific needs of each particular customer, supplementing this central service added benefits, offering prices that will enhance customer loyalty and effective employee recruitment and training to achieve highest degree of customer satisfaction.
Online marketing has prompted an emergence of cut throat competition among business organizations which has subsequently forced these organizations to review their established marketing practices in view of adapting to the changing scenario. However, this shift from the established practices does not denote a shift in focus on developing long-term relationships with customers to ensure their retention and loyalty, it only means that new ways are being identified of taking these dynamics to a whole new level altogether.
Henceforth, customer relationships have come to comprise an vital new asset category, as the buildup of relationship capital increasingly provides a new foundation for marketing and sales revenue (Tapscott et al.,2000). Trust is the fundamental principle which determines a customer’s future behavior towards a certain business and also the client’s willingness to remain devoted to that particular enterprise. Hence, it is imperative of organizations to create a trust worthy image of a business which assures its clients of quality products and services at affordable but competitive prices.
Customer Trust by the clientele is hinged upon delivery of quality goods and services at affordable prices, how a company promotes and advertises its products and services, the size and the reputation of the company, the business’ sale force, and the locality and physical appearance of a store. Traditionally, businesses’ interaction with their customers has been largely left to the sales people out in the field.
Sales people are usually concerned with clinching sale deals and therefore may fail to fully gain the trust of the customers for effective relationship buildup. The use of emails and other social networks such as face book has allowed for a roll back on these impersonal and unidirectional practices. This is because the use of technology for example emails has enabled the customers to express their views directly to the companies they are loyal to and the organizations in turn are enabled to gain much into their customer’s aspirations and therefore are in a position to offer tailor made services.
Global competition, reengineered product life cycles, mass customization, and the increased need to respond quickly to customers’ needs are just some of the more pronounced trends currently driving organizational change ( Miles & Snow, 2006). Increasingly, successful organizations are those organized in a dynamic network from that, using Information Technology (IT) as a primary enabler, can more quickly adapt to ever-changing competitive landscapes and customer requirements (Davidow and Malone, 2002).
Studies have discovered the need for organizations to create virtual teams which will be mandated in among other duties the transverse of long-established borders in consolidating and maintaining an organization’s customer base. Similarly, extensive studies have been carried out in order to illuminate the concept of outsourcing as a viable venture which organizations can employ so as to attain their relationship building goals.
Indeed, outsourcing is an emerging phenomenon but one that is here to stay. Outsourcing is simply where by an organization delegates some of its core activities to an external partner. However, to achieve success in any outsourcing venture, an organization has to make sure that it is in possession of huge stocks of knowledge accumulated over a long period of time.
That is why various multi-national companies have established offshore call centers where their customers are able to access any information regarding their range of products and services. Great care is taken in both the recruitment and training of the personnel that is in charge of these call centers. The overall result is that strong and effective relationship building is established between the organization and its customers (Lonsdale, 2002).
Overview of the literature review
The existing literature attempts to explain the impacts of relationship building towards the sustenance of a loyal customer base. However, most of the literature review has tended to solely highlight on the role of technology in enhancing effective relationship building but fail to give a comprehensive account of the human impact that may result from embracing technology so as to achieve the intended goal.
Even if they have tried to shed light into the dynamics posed by relationship building, most of these studies have largely concentrated on the advantages presented by the concept of relationship building without really paying any attention to it down sides. This might entail that the conclusion revealed may not be generalizable to encompass the overall impact that relationship building might have (Lonsdale, 2002).
Research Design
The descriptive research was focused using a survey design because of the need to describe the nature influential and the main factors which will determine the extent to which effective relationship building can enhance the capability of an organizational to sustain a sound competitive advantage by consolidating and maintaining a loyal customer base.
Area of Study
Sampling Design and Procedure
Five types of respondent were identified as above. The study adopted a purposive stratified sampling methodology. This was influenced by the researcher’s convenience and the willingness of the individual respondents to provide information.
Data Collection Instruments
The following data collection instruments were used by the researcher;
Observation. The researcher/investigator specifically targeted the sales and marketing department of Ultravetis Company in view of conducting interviews and making observations. An interview is a conversation whose main objective is to collect data through verbal interactions with the respondents.
The researcher used both structured and unstructured interviews. These interviews were aided by a self administered questionnaire. The questionnaires comprised of two sections. One section was aimed at gauging the customer’s demographic profiles while the second section was aimed at capturing the respondents’ attitudes towards the area of study.
This second section used a five point licker scale. This scale calculated the opinion of the respondents using statistical values. Below is an example of the scale that was used with subsequent results for the response gathered;.
Analysis
- 4.50 – 5.00 Highly Satisfactory.
- 3.50 – 4.00 Good Enough.
- 2.50 – 3.49 undecided.
- 1.50 – 2.49 not good enough.
- 0.00 – 1.49 Highly Unsatisfactory.
The resolution to employ questionnaire for data collection was influenced by the sensitive nature of the information being sought and the fact that this method would give the investigator an ideal opportunity to collect and gauge the opinions of the respondents concerning the area of study.
Interpretation & Analysis
The investigator has used the bellow frequency table to help in analyzing the data collected. The table shows the possible responses and the total number of respondents for each response. Hence, it will be possible to ascertain the percentages of respondents who selected each answer.
Frequency tables are useful when a large number of response options are available, or for example in this case where the differences between the percentages of each option are small.
Systematic filtering has revealed specific subsets of data to be viewed. This has allowed the researcher to examine all the questions against the consequent subsets. With this in mind, it is easier to examine the data that each respective response provides based on the licker scale and therefore define the reasons for the behind each specific response.
For instance in this case, when filters were applied between the company employees and the customers interviewed, it was discovered that a larger percentage of the respondents who felt that Ultravetis’ relationship with its customers happened to be acceptable were mostly employees of the company. This was traced back to biasness n loyalty to the company.
This attitudinal trend by the company employees may be an indication of inadequate change management which has resulted in the employee growing too comfortable with the status quo. This could only mean that this conservative attitude will prevent the company from innovating new ways of building and sustaining effective relationship building.
Further regression analysis has revealed that most of the customers who responded to whether they felt that Ultravetis’ use of technology in enhancing customer satisfaction were below thirty five years. This particular outcome was associated with this group’s knowledge of the use and importance of information technology.
It was also a revelation that there is indeed a growth of the company’s customer base comprising of a much younger generation more conversant with the use of information technology. The study has revealed that the company employees who felt that there processes were ideal are mostly the long serving ones. This hints at a certain degree of ignorance which can be attributed to lack of refresher courses for such employees in view of exposing them to new emerging customer satisfaction and retention processes.
When asked if they felt that the company has done enough to ensure easier access to products and necessary information, most of the respondents from the customer subset responded by indicating that they felt that still there was room to improve on that. This revealed that the company had yet to embrace the concept of outsourcing whereby it could have some of its products being distributed by others.
The results released also brought to light the fact that most of the respondents were satisfied with the quality of products from the company. This is an indication that the company has initiated a strong worth brand but it is also a challenge for them to strive in the discovery of new quality products to cater for emerging future markets.
An effective relationship marketing is attained by implementing strategies that are geared at achieving the following; Understanding customer expectations, building service partnerships with customers, empowering company employees and staff to satisfy customer needs bytaking the initiatives beyond the norms of the company and providing customers with the best overall quality relative to individual need ( Alyssa, 2009).
A quick reflection on the above findings from the study carried out shows that Ultravetis Company needs to do more so as to achieve the four aspects of relationship marketing that Alyssa has mentioned. This has been highlighted in both the conclusion and recommendation part of the report.
Conclusion
Inasmuch as a lot has been debated in relation to the advantages of relationship building in ensuring that companies are able to consolidate, sustain and maintain a solid customer base. It is my feeling that still that a lot of ground has to be covered to exhaustively come up with ideal ways of effecting this concept in totality.
For instance, I have observed that although relationship building is beneficial to both the companies and the clients, it also presents some human implications that have been highlighted vaguely. Indeed it is true that harnessing technology for effective relationship building is vital for a company’s sustainability but it is also a fact that such endeavors will also present a subsequent negative factor.
Such ventures do not embrace the principles advocated by champions of labor intensive technologies. I am of the view that if an all embracing use of technology is effected without appropriate measures of mitigating against excessive layoffs, this might turn out to be a big unemployment problem and especially within the least developed countries whose industries are largely labor intensive.
Companies are also bound to incur huge expenses in training their virtual teams since advance in technology is not only known to be regular but also rapid and erratic. This means that the members of company’s virtual team need to be in a constant state of upgrade as far as acquisition of vital skills is concerned.
Traditional teams are also out performing their virtual counterparts in the ability to effect an orderly and efficient exchange of vital information. This is because the virtual teams require more time to discuss any findings in view of reaching a consensus.
The above however does not call for a cause in alarm; it is my belief that careful scrutiny into the whole issue will avail the best practices ensuring effective relationship building. Companies should therefore strive to ensure that their embrace of technology to attain relationship building goals is accompanied by carefully crafted measures mitigating any possible human impacts that the proposed changes might provoke.
Recommendations
I strongly advice company’s management teams to do the following in ensuring that they attain appropriate relationship building practices. Apart from the already highlighted ones, business enterprises should strive to;
Give customers an experience to remember. Businesses should ensure that their clients focus more with the type of service they receive from a given enterprise than just merely identifying with the available goods and services. This attitude fosters a sense of ownership on the part of customers hence solidifying their loyalty.
Getting customer referrals: Sales representatives should innovate ways of persuading their customers to refer them to their friends.
Anticipation of a customers’ preference: If business owners are more attentive to their customers, they get to know them well and hence are in a position to cater for the customers’ needs and preferences without much fuss. This acts as a great motivation for the customer.
Hiring with patience; Companies should ensure that vacant positions within the company are filled with only the right personnel. It is better for a position to remain vacant for some time rather than filling it with incompetent personnel who will only end up messing up the clientele and causing a loss in business.
Developing a customer friendly vocabulary; Companies should ensure that they develop certain vocabulary that promotes its brand positively while at the same time rolling back on that which does not promote its brand.
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