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Digital Marketing and Communication
“Building long term relationships with customers is
essential for any sustainable business, and this applies
equally to online elements of a business”
(Chaffey & Ellis-Chadwick, 2012)
Author- Sonal Fernandopulle
University- University of Bedfordshire- UK
Table of Contents
Introduction ............................................................................................................................................ 3
Identification .......................................................................................................................................... 3
Customer Relationship Management .............................................................................................. 3
Long Term Customer Relationship.................................................................................................. 3
Sustainable Business ....................................................................................................................... 3
Online Elements ................................................................................................................................ 4
Discussion Supporting the Proposition ............................................................................................... 4
Discussion refuting the proposition ..................................................................................................... 7
Conclusion ............................................................................................................................................. 9
References .......................................................................................................................................... 10
Introduction
According to the argument proposed by Chaffey and Ellis-Chadwick (2012) suggests that
managing long-term relationships with customers are as necessary for E-businesses through
online services as it takes an important place in traditional businesses.
In summarized research by Reichheld & Schefter (2000) which reflects consumer behavior and
online business, start-up states that Online consumers are different from traditional businesses
and they are expensive and impact to start-up companies may remain without any profits for at
least 2 to 3 years. Hence, according to research identified within the last three decades or more,
relationship marketing, one-to-one marketing, and database marketing have been critical factors
in CRM (Chaffey & Ellis-Chadwick, 2012).
Therefore, this essay focuses on identifying the importance of long term customer relationships
with customers for any sustainable business and also for online elements of business through
the arguments justifying connection between long term relationships with customers for
sustainable business and online elements to understand positive reasons and negative
arguments which gives a correct answer for the question.
Identification
Customer Relationship Management
CRM is identified as a strategy that includes all elements to aim at attracting a specific group of
consumers and keep them to attain value to the organizations (Parvatiyar & sheth , 2001).
When it comes to the technology-oriented CRM definition, it is a strategy that uses social
channels and different technological channels with data to improve long-term growth by
understanding consumer behavior and interactions (William , et al., 2003).
In this situation, CRM is about clearly understanding consumer behavior, interactions, like, and
dislikes, and the most important thing is identifying supporting internal systems and resources
which helps to maintain long term relationship with customers through multiple social channels.
Long Term Customer Relationship
Long-term customer relationship defines that it is an approach of enduring engagements and
brand interaction with customers to go for one transaction to maximize its lifetime value (LTV).
(Åkesson & Lindgren, 2017)
Sustainable Business
Sustainable business can be identified as a business that operates by considering the term
"triple bottom line" which ensures the long-term growth and survival of the operational model
and its associated people, planet, and profit. Hence, the sustainable business is more into
positive social impact rather than having a negative environmental impact. This sustainable
practice impacts their brand image and reputation. On the other hand, it helps them to reduce
unnecessary costs and boost the current economy which impacts the adoption of stronger and
perfect local communities (Schmitz, 2012).
Online Elements
Online elements are about every online and digital platform used by companies to engage,
reach, score and interact with customers (Chaffey & Ellis-Chadwick, 2012).
Discussion Supporting the Proposition
1) Maintaining long-term relationships are important to manage customer value,
advocacy, loyalty, and virality: According to the (Christopher, et al., 1991) consumer
loyalty ladder proposing 5 stages that are important to identify consumer loyalty. Hence,
its first stage shows the "suspect" consumers with low loyalty, and the last stage of
"advocacy" shows consumers with high loyalty and act as an influencer. On the other
hand, (chaffey, 2020) identified the RACE planning framework to support digital
businesses to identify their potential customer base appropriately to earn higher
consumer loyalty towards them.
Hence, the main objective of these frameworks is to grow consumer engagement by
control advocacy, maintain repeat products/service purchases, brand satisfaction, and
consumer loyalty. Consumer publicity has become an important element within the
digital business environment due to the instant "virality" of consumer behavior and
sentiments. Therefore, these negative sentiments can directly impact the emotional and
positive loyalty towards that particular brand name. For example- for those negative
sentiments, the Dove- Racist Campaign shows a black-origin woman taking off her t-
shirt to reveal white women's beauty that impacts to gain a lot of disagreements around
the image and beauty of black women. Many of its viewers commented that it's showing
a woman with black as dirt. Hence, because of many disappointments and
disagreements towards that ad was removed from Dove's social media pages (Mangles,
2021). In this digital era, it is important to manage consumers positively if not it may
impact to gain impulsive acts from consumers. Hence, it is important to maintain long-
term customer relationships to give them a better idea about products and to prevent
negative virality which impacts reduce brand loyalty, advocacy, and brand equity. When
it comes to the practical example of managing long-term customer relationships using
RACE, Netflix is an appropriate example. Because the way they reach their target
market is attractive by offering them a 1-month free trial period and after that Netflix,
success to analyze what each of their Netflix users likes the most to give suggestions
with highlighted Tv-series and movies. After that conversion, the satisfied users will
register for a full account. Also, Netflix engages its users by introducing its own Netflix
productions which can create loyalty towards its series not on Netflix. Because Netflix
has series, movies, and documentaries for everyone.
Figure 1 RACE Framework, Dave Chaffey (2020)
2) Building long-term customer relationship makes the personalized communication
process easier: The business world is currently very competitive due to the arrival of
similar digital trends, products, and services. Hence, it is necessary to identify
information about our customer base. To design personalized communication
processes, companies should learn about the product interests, values, expectations,
and buying behaviors of their customer base by maintaining relationships with them
(Houston-Victoria, 2021). Therefore, unique websites, email marketing, chatbots, and
messaging apps offer an important ability that helps companies to develop customer
relationships. On their hand, online databases help organizations to analyze data on
individual consumers and prospects (Chaffey & Ellis-Chadwick, 2012).
These personalized communications make customers feel emotionally attached and
valued by the particular business through close communication processes like emails
and personalized messages which impact the positive relationship between digital
businesses and consumers. Communication holds an important place in a business
since most of the new generation use it as a measurement of identifying the
organization's courteousness. However, when it comes to digital channels, personalized
user experience, and email synchronization impact building positive relationships
between digital businesses and customers (Mainela & Ulkuniemi, 2012). The customer
intention is to have a business supplier who can understand their actual needs and
identifies the trends to offer a better experience and services to customers. Hence, it
highlights the importance of building relationships with customers to identify the final
user preferences to provide customized communication which can maximize profits and
brand engagement. For the first example, Spotify has succeeded in providing
personalization to a new level by introducing its new Only You campaign which gives
personalized content for each user and the actual meaning is a one-to-one relationship
with Spotify. Its impact is to gain the idea of a customized touchpoint. Also, they enable
virality since Spotify provided an option to share content across other social media
channels. As a second example, Amazon is providing customized recommendations to
consumers through emails and messages to interact with its customers and attracting
more.
3) An important factor that maximizes LTV and marketing spend efficiency: Most new
businesses have been forced to start their online presence and strong relationship
practices due to globalization, growth in e-commerce, changing customer mindsets and
buying behavior during the pandemic. Hence, digital presence has become an important
part of a business, and the cost of handling online consumers is higher when compared
with traditional businesses due to digital marketing spend (Schefter & Reichheld, 2000).
Therefore, if organizations fail to manage effectively a strong process for long term
customer relationships, it will directly affect lifetime value and because of that, its effect
will reduce the efficiency of their marketing spends. Also, when it comes to sustainable
businesses it is important to maintain long term customer relationships, for example,
Ikea and Patagonia are doing a great job by starting a process of taking back old
products from customers to recycle which proves environmental sustainability by
managing long term customer relationships (Bansal, 2020). Hence, it is necessary to
prioritize long-term customer relationships to maintain standards, feasibility and avoid
issues.
4) Maintaining long term relationships makes easier the monitoring, customer
profiling, analysis, and prompt feedback processes: Within this competitive market,
it is important to follow up comments, consumer engagements, and service styles to
understand consumer behavioral factors which affect the products and services through
customer feedback and engagement for each product and services to gather information
about their preferences. Because the main objective of long-term relationship-building in
marketing is to protect and maintain a long-term engagement with the target market to
achieve brand loyalty. According to (Chaffey & Ellis-Chadwick, 2012), building strong
relationships through marketing is necessary for measuring, analyzing, and encouraging
customer feedback through social media channels. For example, Apple is using
support's social media profiles to maintain long-lasting relationships with customers.
Especially their Apple Support Twitter account which has almost 1.3 million followers
(twitter, 2021). When discussing the way, they maintain lasting relationships through
Twitter, their first strategy is to present different tips with images or short video clips
which are easy for viewers to watch and share across their own social media channels.
Hence, these tips help anyone who uses Apple products, and also what Apple wants to
show is that they aren't just giving attention to growth in sales but they love to help
customers and encourage them. Their second twitter strategy is providing quick answers
for customer questions and valuing every type of feedback. Hence, this long-lasting
interaction between the sellers and customers impacts introducing the right product or
service to the market and quickly respond to consumers' concerns. Therefore, this
relationship enables firms to analyze every order, complaint, and positive feedback to
identify the exact preferences in their business operations. This impact makes the
customers feel very attached to the business and fans for life (Heavin, et al., 2016).
Also, customer profiling methods implemented by companies through E-commerce
channels as an answer for the challenges faced when companies identify exact
customer preferences (Ntawanga, et al., 2008). Hence, these profiles assist with
personalized contents which improve customer relationship and profitability
(Adomavicius & Tuzhilin, 1999). Customer profiling can be improved using "Big Data".
For example, the way Spotify makes use of big data to develop satisfactory personalized
experiences for its customers because everyone has their unique tastes which impact to
grow a long-lasting customer base. Hence, this is how they recommend the "Discover
Weekly" feature to its customers which have been achieved by using different AR
technologies and Machine Learning algorithms (Rangaiah, 2021).
5) The impact from Commitment – Trust- Theory (CTT): Reason of that growth in using
E-commerce and only channels still impact is to gain lack of trust among customers
when they use online elements to reach businesses (Mukherjee & Nath, 2007). Hence,
this creates barriers for promoting businesses through online elements across some age
segments and cultures. On the other hand, new generation (Gen-Z) customers are
showing higher levels of trust while millennials and mature segments show low trust
towards e-commerce.
According to the commitment-trust theory which was proposed by (Morgan & Hunt,
1994), commitment and trust are identified as two main elements which impact long-term
understanding relationships to establish business sustainability. But the initial theory was
introduced regarding the offline business environment. However, (Mukherjee & Nath,
2007) academic research identified that CTT is equally necessary for an online business
environment. Hence, businesses need to invest their effort and resources towards
maintaining relationship commitment and increase trust towards them through CRM
which enables organizations to achieve loyal customers across online channels.
Figure 2 CTT theory, Morgan and Hunt (1994)
Discussion refuting the proposition
1) Offline service impact on the continuity of online loyalty: Some researchers
identified that online customer loyalty is based on offline services and it drives online
relationships. Hence, that study suggests organizations mainly focus on consumer
behavior, loyalty, and relationships across offline channels (Frasquet, et al., 2017).
Therefore, it builds an argument by stating building long-term relationships through
online channels may be pointless. This argument is with regards to companies like
Aliexpress and Amazon since they are maintaining online relationships rather than
encouraging offline relationships.
Also, (Pansari & Kumar, 2017) research understands that in online or traditional
business environments, long-term customer relationships can be identified as a direct
result of customer satisfaction towards a specific product or service. For example, when
it comes to the cosmetics industry research identified that consumers are mainly using
offline channels to buy cosmetics products and then they engage with online channels to
maintain relationships towards that brand to do research, alert with new products release
or discounts (Chaffey & Ellis-Chadwick, 2012). However, this helps to understand that
companies should maintain their online channels to manage customer relationships after
the initial product purchase.
2) Security issues and supporting costs: Businesses must collect personal information
through digital channels to understand the way that they should create personalized
messages and services for customers. Therefore, this process is not the same for every
scenario because some people are afraid to react or view advertisements due to their
confidential information (Chaffey & Ellis-Chadwick, 2012). However, businesses and
marketers have the right to encourage the use of customer data to increase customer
satisfaction towards the online experience. But it is necessary to protect this confidential
information from hackers. If a business fails to protect privacy, they lose trust and
directly impact their reputation if it goes viral. For example, Apple's security issues in
2014 were due to the IOS bug problem (Brandom, 2014). Long-term relationship building
is indeed an appropriate marketing strategy that provides guaranteed consumer loyalty
but on the other hand, it's costly when businesses should focus on more processes like
maintaining security, data protection, and data gathering systems. Hence, most
businesses cannot maintain such relationships with customers at the individual level
since the newest businesses maintain automated marketing tools to deliver their
messages and services to their customers, not individual levels.
3) Mass customization and impersonal approaches: Online consumer engagement
organizations should use different automation processes to engage with their customers.
This impact takes away face-to-face interaction with customers which is important for
building long-term consumer relationships. Also when it comes to automation, it is
impersonal and targets on a reach without seeing long-term relationships as essential.
Because it always cares about brand visibility. For example, pop-up stories and ads.
Hence, organizations should develop a "personal touch" to build long-lasting
relationships through digital strategies and online channels.
Conclusion
Most businesses are trying to be active on online elements to drive their promotions, increase
revenue, increase customer attraction and improve brand visibility. However, when businesses
use digital strategies those are more like the things to achieve things in a short period and
transaction-focused goals. Most businesses are maintaining this as a process that helps to
reduce online competition and avoid negativity. There are certain areas that businesses should
focus more on when managing long-term relationships through online elements. Hence, more
focus on protecting privacy, maintaining ethical standards when promoting and identifying
consumer emotions is essential.
Therefore, analysis of CRM to e-CRM and Social CRM provides a detailed idea of the
importance of maintaining online consumer relationships. Long-term customer relationships are
essential for every business when its impact to maximize lifetime value and impact to increase
customer engagement across the customer loyalty ladder. On the other hand, there is some risk
associated with online long-term relationship management, especially virality on social media
which can decrease consumer interest and loyalty towards brands. However, online elements
and transactions become essential due to the Covid-19 pandemic and businesses have no
other element to focus on rather than maintaining long-term relationships through online
elements to sustain. The importance of a long-term relationship will always be based on
business style, product, and promoting strategies. However, if businesses fail to provide the
same importance and service quality to the customers through online channels, its impact runs
a high business risk.
Based on the above analysis, it is clear that building long-term relationships are
essential in the same manner across online elements.
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