Jascha Kaykas-Wolff

Business Challenges

Today, it’s all about more. More consumer control, more channels, more media and more money spent online. Because the online channel gives consumers more options to choose from, organisations face a big

challenge: when customers can visit any site at any time, what will make them loyal and keep them coming back?

According to recent research from Frederick Reichheld of Bain & Company, it is six to seven times more expensive to acquire a new customer than it is to retain a current customer. As little as a 5% increase in customer retention can increase profits by 25% to 95%.

As businesses in various industries are expected to lose up to 50% of their customers over a five-year period on average, customer retention is a key factor to an organisation’s continued sustainability and growth.

A New Marketing Model: The Learning Relationship

With competitors just a mouse click away, marketers need to create strong relationships with their customers in order to build loyalty and keep them coming back. With better customer insight, both online and offline, marketers can develop relationship marketing programmes that are relevant to their customers’ needs.

Relationship marketing emphasises customer retention and satisfaction, rather than new acquisitions or individual transactions; this is done with the ultimate goal of increasing customer loyalty through establishing a “learning” relationship with each customer.

By gaining a deeper insight into customer behaviour at every stage of the consumer lifecycle, organisations are better able to create a high degree of value and trust with their customers.

Marketing experts Peppers & Rodgers have demonstrated that, “Even if a competitor offers the same type of customisation and interaction, your customer won’t be able to enjoy the same level of convenience without taking the time to teach the competitor the lessons your company has already learned.” And that’s a powerful motivator for customers staying loyal.

Relationship Marketing through the Internet

The rise of Web 2.0 and social media grants consumers more control over what they view, how they view it, and when they have access. As a result, marketing has shifted from a push to pull, mass media model to a viral marketing, word-of-mouth model.

Consumers typically spend 34% of their media time online and this only reinforces the need for focused relationship marketing via the internet.

The unique measurability of the web takes relationship marketing to a new level because it provides greater insights into preferences and behaviour. With better customer insight, both online and offline, marketers can develop relationship marketing programs that are relevant to the visitors’ needs.

Analysing Consumer Behaviour

For successful relationship marketing, businesses need to move beyond the fragmented view of individual transactions and view customer behaviour over the lifetime of the relationship. Customer behaviour should be represented by a comprehensive cross-channel analysis of all customer data, allowing deep insights into customer preferences and motivations.

This begins with understanding consumers and establishing a “learning” relationship between both parties. In a four-step approach, businesses can look to develop more creative, innovative and cost-effective strategies for retaining and building loyalty with their customers.

(1) Firstly, website visitors’ offline data must be tied in with the behaviour they exhibit online. By recognising individual customers at every contact point, businesses are able to learn about individual customer needs and motivations. This in turn joins existing knowledge of demographic, psychographic and geographic visitor information with the web.

(2) The next step is segmenting customer behaviour, a process by which customers are grouped by their needs and their value to the organisation. Through identifying visitors and assigning levels of interest, businesses can explore ways of creating ongoing dialogue with consumers.

(3) One advantage of analysing consumer behaviour and merging data offline and online is the ability to generate real-time visitor lists for targeted marketing, ensuring messages reach the right customers at the right time. Using the statistics, companies can tailor marketing messages to individual customers and improve the effectiveness of their marketing campaigns.

(4) The final step in the process is to measure the results of the relationship marketing campaign that was implemented, and continually optimise the results. Online analysis tools make it possible to get immediate feedback from customers, easily identify customer detours and abandonment points, allowing companies to react quickly and re-engage them.


As customer perceptions continue to shift towards a more commoditised view of the world, traditional marketing methods are quickly becoming obsolete. The market advantage is shifting from companies with the ability to reach large numbers of customers through mass media to those that have high levels of insight into individual customer behaviour and preferences. Businesses that move beyond individual transactions and engage in learning relationships with customers are seeing a lasting competitive advantage.

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