While relationship marketing concerns all of the stakeholders of an organization, including customers, suppliers, investors, and employees, the primary focus of relationship marketing is customers. Relationship management is similar in concept to managing any other key asset of an organization. It can facilitate sustainable competitive advantages and engender customer loyalty. The extent to which a firm can engage in effective relationship management increases the difficulty for competitors to steal an organization’s customers. The foundation of relationship management is the organization’s ability to consistently provide products and services that are of value to the customer. Accordingly, relationship management is augmented by getting the customer more involved with the organization by sharing information about the organization’s mission, goals, culture, values, and people. Getting the customer more involved with the organization can have a positive effect on customer satisfaction and the customer’s commitment to the organization. Relationship management can be effective in increasing the velocity of responses to customer issues, which suggests that flatter organizations would facilitate the ability of a firm to be more responsive to these customer issues. Organizational policies should be supportive of employees developing relationships with customers in order to facilitate resolution of customer problems, proactively engage with customers to offer solutions that may address their needs, and increase customer satisfaction with the organization.


Relationship marketing provides a way to measure the productivity of marketing programs in facilitating customer satisfaction and enhancing the performance of the organization. An asset management approach can be used to understand the connection between relationship marketing and the productivity of marketing programs. These assets can be described as relational assets, or customer equity, and intellectual assets, or information about the market and competition. While these assets reflect current and potential value, they can be difficult to value. The profit potential of relationship marketing is a function of customer and brand equity, with customer equity determined by customer lifetime value (CLV). CLV is a measurement of the total expected revenue from a customer over his/her entire relationship with the company.


Michael Mobley