What is relationship marketing? How is it different from transaction
marketing? How to integrate databases into an organization's
relationship marketing efforts?

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Request for Question Clarification by easterangel-ga on 10 Mar 2003 01:59 PST

Hi! When you ask "How to integrate databases into an organization's
relationship marketing efforts?", is this moving towards a more
technical discussion of relationship marketing or still in broad
general ideas?

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Clarification of Question by jackieyu-ga on 10 Mar 2003 08:38 PST

Hi, esaterangel-ga, thnaks for the answer for "interactive marketing",
it is really helpful.As for this question, I shall say it is mainly in
broad general ideas but with some technical details , say 20%. Thanks
again

Dear jackieyu,

Thanks for your question.  First, let me request that if any of the
following is unclear or if you require any further research – please
don’t hesitate to ask me for a clarification.

You asked “What is relationship marketing? How is it different from
transaction
marketing? How to integrate databases into an organization's
relationship marketing efforts?”


What is relationship marketing?
++++++++++++++++++++

The Haley Marketing Group offers the following definition –

“Relationship marketing is all about building customer bonds. Rather
than emphasizing products or services, focus is on people.”

Further, 

“Relationship marketing is a communication process. It's about
creating dialogs with prospects and customers - discovering what they
want, what they need, and how you can best be of service.”

The Haley Marketing Group offers excellent insight into the
relationship marketing process, and addresses reasons for using
relationship marketing, a “how-to,” as well as a cost/benefit
analysis-

http://www.haleymarketing.com/c_what.html


The Carlson Marketing Group in Atlanta specializes in relationship
marketing.  According to the group,

“Relationship Marketing in whole is the antidote to limited
traditional marketing practices and one-size-fits-all technology
solutions. It is about creating a sustainable emotional and
value-based connection between people -- not technology. “

http://www.metroatlantachamber.com/serving/content_hotco_carlsonmarketing.html


Peppers and Rogers offer a graphical representation of relationship
marketing – see:

http://www.dmreview.com/images/crm_poster.jpg


Robert C. Parker offers an extensive introduction to relationship
marketing here –

http://www.efuse.com/Design/relationship-marketing.html

While his focus is exclusively on marketing through the Web, this is
an excellent resource if you want to gain a deep understanding of the
subject.


How is it different from transaction marketing?
+++++++++++++++++++++++++++++

This is really quite trivial – transaction marketing focuses on
closing a single transaction; in relationship marketing, the focus is
on the long-term value of the customer – the focus is not on the
current transaction, but rather on all potential future transactions. 
In fact, relationship marketers may forego revenues and profitability
now if they believe they can encourage greater revenues and better
profitability over the long term.

Because it costs so much more to gain a new customer when compared to
the cost of retaining a current customer, relationship marketing can
be an extremely profitable proposition.


A PowerPoint comparison of relationship and transaction marketing can
be found here –

http://www.utoledo.edu/~dreid/6290Slides/6290-Session4.ppt


Another presentation on relationship marketing offers the following
comparison –

“Transaction-based marketing focuses on:
A single sale, product features, short term, stand-alone product,
yield from individual transactions
Transaction-based marketing does not focus on:
Customer service, customer commitment, quality
Relationship marketing focuses on:
Customer retention, product benefits, long term, customer service,
customer commitment, adds value to a product, quality is the concern
of all, general and long term profitability “
The entire presentation is at –

http://www.uwc.ac.za/ems/man/MAN231/CHAPTER7.PPT


How to integrate databases into an organization's relationship
marketing efforts?
+++++++++++++++++++++++++++++++++++++++++++++++++

The technical side of relationship marketing is known as CRM –
Customer Relationship Marketing.

According to Whatis.com –

“CRM (customer relationship management) is an information industry
term for methodologies, software, and usually Internet capabilities
that help an enterprise manage customer relationships in an organized
way. For example, an enterprise might build a database about its
customers that described relationships in sufficient detail so that
management, salespeople, people providing service, and perhaps the
customer directly could access information, match customer needs with
product plans and offerings, remind customers of service requirements,
know what other products a customer had purchased, and so forth.”

More information in this vein may be found at –

http://searchcrm.techtarget.com/sDefinition/0,,sid11_gci213567,00.html


According to DestinationCRM, 

“If customer relationships are the heart of business success, then CRM
is the valve the pumps a company's life blood.”

This is extracted from a great article on what CRM is and isn’t, which
can be found at –

http://www.destinationcrm.com/articles/default.asp?ArticleID=1747


CIO offers a good perspective on what CRM is, how it happens and how
much it costs –

http://www.cio.com/research/crm/edit/crmabc.html#how
For a more technical overview, see the transcript of the following
presentation –

http://www.eyefortravel.com/pastevents/usae2000/presentations/datamining.doc


I hope this response adequately addresses your request.  Please let me
know if you are in need of additional information concerning this
query.

Thanks,
ragingacademic-ga


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