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Relationship marketing in the mobile telecommunications market

Updated on April 17, 2015
Source

Relationship marketing is marketing that is centred around customer retention and satisfaction, rather than sales and promotions. It is the relationship that the buyer and seller have after the sales transaction has be completed to make the exchange a more satisfying and long term. Relationship marketing is important to attract new customers, retain existing customers and entice former customers back to the organisation. Relationship marketing is also very useful at adding value to the organisation because it is customers where organisation make profits, so keeping a positive relationship with them will benefit the organisation, in the short and long term. This is because customers who hold a positive relationship with a specific organisation will more likely do business with them again.

The telecommunication market is a very competitive market with competition coming from not only mobile telecommunication businesses but also supermarkets. In the past the mobile telecommunication market used to just sell mobile phones and services without any customer relationships, which meant that when it seemed everyone, had a mobile phone the only way to keep customers is through building lasting relationships with their existing customers.

Rationale

The rationale for UK Mobile telecom organisations pursuing a relationship marketing strategy is the importance of customer value.

  • First of all it is a lot cheaper for a organisation to retain customers then it is to attract new customers through promotion and advertising. Therefore keeping a good relationship with the customers is more likely to benefit the business in the long term.
  • Having a loyal customer will also increase the chances of the customer spending money with the organisation again as there is a positive relationship between the two parties as the customer would have had a satisfying exchange with the organisation the previous times.
  • With RM there is a higher level relationship between the customer and org so there is a mutual exchange of rewards, this is where the two parties sees a profitable gain within the relationship. The customer will benefit from special deals and offers from the org, and the org in return receives long term benefits and loyalty to the org.

Another rationale is the fierce competition in the UK Mobile telecom market.

  1. The growing number of businesses entering the mobile telecom market makes it an increasingly competitive industry because there is competition from not just other mobile businesses but also supermarkets who have entered the market such as Tesco.
  2. Due to the high number of competition, rival businesses try to entice new customers with better deals and offers making them readily available. As a result of this customer retention becomes very difficult unless the organisation and customer have a long term relationship already in place.

Source

The advances in technology have also made RM more effective. Organisations can have vast information saved on databases about every single one of their customers will valuable information regarding their demographics, purchase history and many more other categories. Therefore, the longer the relationship between the organisation and customer the more information the organisation will have and thus meaning the org will have better knowledge of its customers and will produce more specified one to one marketing offers.

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    • pgiblett profile image

      Peter B. Giblett 2 years ago from Ontario, Canada

      I did some work a few years ago with one of the UK mobile companies that put it leagues ahead of their competitors in respect of providing the business intelligence backing for their customer retention programme - it was about offering the right deal before the customer realised they needed it.

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