Relationship marketing at the summit

Citation

Johnston, W.J. (2009), "Relationship marketing at the summit", Journal of Business & Industrial Marketing, Vol. 24 No. 5/6. https://doi.org/10.1108/jbim.2009.08024eaa.002

Relationship marketing at the summit

Article Type: Commentary From: Journal of Business & Industrial Marketing, Volume 24, Issue 5/6

While many consumer behavior researchers might trace the beginnings of “Relationship marketing” to the relational exchange taxonomy of McNeil (1980) or the services research cum relationship paradigms of the “Nordic Group”, research and conceptual models examining relationship phenomena can be found earlier in the work of the Industrial Marketing and Purchasing Group and the Zaltman et al. (1977) industrial buyer behavior thinking. Because of the importance of a single customer and the relative parity of the buyer and seller in an industrial exchange, customer relationship management in the broad sense has existed in business-to-business thinking for a long time. The idea that it was important to focus on and maintain a high quality relationship with customers slowly spread from industrial marketing to services marketing and then consumer packaged goods marketing. When it finally reached the consumer arena some researchers believed they had discovered a “new” aspect of marketing their overlooking of the historical approach of marketing in a business-to-business setting notwithstanding.

The increasing utilization of computers in all business areas the 1990s saw the emergence of special software to support sales and then marketing. These tools were aimed at measuring and managing customer relationships. At first they were called “sales force automation” and then “customer relationship management.” Thus, CRM software became the narrow and computerized version of a phenomena – customer relationship management – that had existed since there were customers. At first CRM implementations failed miserably. This was because it was about installing the software across the entire enterprise and then adapting all marketing and sales processes to suit the software. In some studies 70 percent of all implementations failed to accomplish the basic objectives of improving the customer experience or lowering sales and marketing costs. Today, after 15 years of experience, CRM is still risky but more implementations are finding success.

The fact that customer relationship management can have both broad and narrow meanings is important to the entire field of marketing. Early views of relationship marketing felt that the idea was to use the tools of marketing to raise every customer relationship to a higher and stronger and deeper and longer connection. “Marriage” was often used as a metaphor for the goal of relationship marketing between supplier and customer. The fact that not all customers wanted to be in a monogamous, long-term, contractual relationship with a supplier was ignored. With the advent of the term customer relationship management in the narrow sense, relationship marketers began to come to their senses and realized it was better to think of the appropriate level of relationship with each customer. Some customers would be strategic accounts and others would not. How to serve each customer best while maintaining profitability became the goal of relationship marketing and marketers began to think in terms of a customer portfolio of relationships. One dissertation found that the average level of customer satisfaction went down after firms implemented customer relationship management systems. Upon closer examination it was determined that the level of satisfaction for larger customers went up while satisfaction for midsize and smaller customers went down due to the firm’s prioritization of support and services to customers based on importance of the customer. Customer relationship management in the broadest sense now encompasses all of the areas marketing used to be responsible for. For firms that truly adopt a customer centric focus, customer relationship management can include all of the business functions. Thus, a phenomena that began in the academic area of industrial marketing has spread to all areas of marketing and now threatens to be the umbrella under which all business functions can be classified.

The importance of the Relationship Marketing Summit and the papers included in the two part special issue of the Journal of Business and Industrial Marketing is profound. For years there were two parallel organizations and two annual meetings focusing on relationship marketing and then more recently including customer relationship management. The two organizations were the AMA Relationship Marketing special interest group (SIG) and the International Colloquium for Relationship Marketing. Jag Sheth began the AMA Relationship Marketing conference while at Emory and recently I have taken on the responsibility for the biennial meeting. The ICRM origin had a broader base The first Colloquium was held in 1993, held at Monash University in Melbourne and organized by David Ballantyne. The thought leaders at that event included: Christian Grönroos (Finland); Evert Gummesson (Sweden); David Ballantyne (Australia); Ian Wilkinson (Australia); Louise Young (Australia); John Rickard (Australia); Martin Christopher (UK); Adrian Payne (UK); Hervé Mathe (France); Dave Wilson (USA); and Don Jackson (USA). There was almost no overlap between the membership of the two groups and each group contained leading edge researchers. This summit is the first time the two groups have held a joint meeting. The meeting allows for exchange of ideas and collaboration between the two groups. While the areas of research for the two groups overlapped, each group tended to use distinctly different research methodologies. In addition, as is the case with two somewhat competing groups who do not intermingle there was some perceived misunderstanding of each other.

The summit was the idea of Jaqueline Pels, who worked for over two years to sell the idea to both groups and another two years to bring the summit about and then another two years to put these special issues together. As a result of the summit and these special issues we now have a compilation of the best ideas of the two groups in one place. We also have a better understanding and appreciation of the work between the two groups and numerous joint ventures involving member from the two groups.

Relationship marketing has reached the summit, but there are higher peaks in sight.

Wesley J. JohnstonJ. Mack Robinson College of Business, Georgia State University, Atlanta, Georgia, USA