Measuring Return on Relationships with Customers

Measuring Return on Relationships with Customers

Minwir Al-Shammari (University of Bahrain, Bahrain)
Copyright: © 2009 |Pages: 20
DOI: 10.4018/978-1-60566-258-9.ch010
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Abstract

Effective development of customer products and/or services requires valid and up-to-date CK in order to target the right customer with the right offering at the right time and through the right channel. Increasing value-adding content of customer offerings is hoped to be reflected on major gains in cost, time, and quality of products and/or services. Doing good things for customers is doing good things good for business. This chapter addresses customer value reciprocity for business represented by durable and profitable customer relationship.
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Conceptual Foundations

The buyer-seller relationship has been likened to a marriage since it decreases uncertainty, allows a sharing of tasks, and provides and intimacy. However, like a marriage, it also increases personal responsibilities, requires care and nurturance and can end with a costly dissolution. To a larger (B2B) and smaller (B2C) degree, these same costs and benefits often apply, for example, the revenue-sharing alliance pioneered by Amazon.com where a seller pays a commission to an Internet partner on the basis of click-throughs, sales leads, or actual sales that originate from the partner’s site. These alliances require both parties to agree to investments of time and resources, such as technical capabilities, reporting system, and marketing (Mohammed et al., 2003). This section discusses the concept of customer ‘relationship’ and customer life cycle (CLC).

Customer Relationship

A relationship is a bond or connection between a firm and its customers. It may be strong, weak or nonexistent. It can be intellectual, emotional or both. Relationship can be intellectual, emotional or both. Intellectual: ‘I know I cannot get a better deal elsewhere’. Emotional: ‘I feel good when I am wearing my Nikes’ (Mohammed et al., 2003).

Two categories of relationships are observed: type and involvement. Relationship exists along a continuum of types ranging from communal to exchange based. A purely communal relationship is altruistic in that each person is focused on meeting the needs and wants of the other(s) in the relationship, e.g. parent and child. In contrast, an exchange relationship is based on the giving of one thing in return for another, e.g. buyer-seller relationships (Mills et al., 1994).

Relationship involvement is defined as the degree to which a relationship is relevant to the consumer, viz. the extent to which it relates to consumers’ values, interests, or needs. Involvement is a function not only of product characteristics, but also of the purchase situation and the consumer’s personal needs.

Complete Chapter List

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Table of Contents
Foreword
Luciano Batista
Acknowledgment
Minwir Al-Shammari
Chapter 1
Minwir Al-Shammari
In today’s dynamic business environment, change is omnipresent. Organizations have to develop sound change management strategies in order to counter... Sample PDF
Setting a CKM Strategy
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Chapter 2
Minwir Al-Shammari
The only constant in life is change, and business organizations are not different. Environmental uncertainties made transition to knowledge-based... Sample PDF
Spotting Environmental Drivers
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Chapter 3
Reorganizing People  (pages 63-104)
Minwir Al-Shammari
The ability of an organization to compete in rapidly changing business environments is contingent upon its ability to develop competitive strategies... Sample PDF
Reorganizing People
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Chapter 4
Retooling ICT Systems  (pages 105-135)
Minwir Al-Shammari
Regardless of the type of organization or operation, the evolving nature of organizational ICT systems helps organizations to live up to changing... Sample PDF
Retooling ICT Systems
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Chapter 5
Redesigning Processes  (pages 136-167)
Minwir Al-Shammari
In today’s turbulent and complex business environments, the focus has shifted from products to services. As a result, services have become a new... Sample PDF
Redesigning Processes
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Chapter 6
Minwir Al-Shammari
The customer is a strategic element in a company’s downstream supply chain. In the new economy, customers, whether they are individual consumers or... Sample PDF
Capturing Data from Customers
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Chapter 7
Minwir Al-Shammari
Whether companies are engaged in B2B or B2C transactions, they need to understand their customers. Once customer data are captured and stored in... Sample PDF
Compiling Profiles of Customers
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Chapter 8
Minwir Al-Shammari
Increasingly, knowledge is becoming a primary engine of growth in the globalized business world and is making nations more competitive as they shift... Sample PDF
Creating Knowledge about Customers
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Chapter 9
Minwir Al-Shammari
Efforts to improve the experience of customers do little to boost customer satisfaction and loyalty if they fail to connect with customers and... Sample PDF
Maximizing Value for Customers
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Chapter 10
Minwir Al-Shammari
Effective development of customer products and/or services requires valid and up-to-date CK in order to target the right customer with the right... Sample PDF
Measuring Return on Relationships with Customers
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Chapter 11
Minwir Al-Shammari
The previous chapter focuses on creating value-added products and/or services to customers..As the management of a CKM change is a journey, not a... Sample PDF
Managing Learning throughout CKM Change
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About the Author