4 Models for Managing Customer Relationships
From the day a customer-brand relationship is established, various ties are created, differentiated from one another mainly in their length and the type of relationship between brand and customer that develops.
The relationship model is, in essence, a 4-sectored matrix that differentiates between the levels of customer identification and whether there is (or isn’t) a direct relationship:
Direct relationship – The customer and brand meet without any intermediaries. From a sales perspective, the distinction generally has to do with who retains control over the payment process. Brands and companies who are directly get paid are in direct relationship with their customers
Identified – Can you manage data collection on all customer activities on a single and identified user basis? If data on some of the activities can be collected, but not on all, or if the customer can remain anonymous, then the relationship will be classified as “unidentified.”
So, what actually influences the matrix?
The type of relationship will be established and managed according to how the customer and their interactions with the brand fit into the matrix. We will focus on two sectors:
CPG companies
- Who falls into the category – Importers and manufacturers without an independent point of sale –
- Where do they fit in the model – Indirect/unidentified – A lack of control over the payment process (purchases take place in supermarkets or pharmacies) prevents companies from getting to know their customers or managing basic data on an individual customer basis.
- What is the relationship model – Based on customer engagement – experience, content activities, etc.
- How do you disrupt the model – Managing a direct and identified relationship with the customer is still extremely challenging for manufacturers, from technological and “power struggle” with retailers’ perspectives. As such, we do not currently see dramatic moves to change the traditional model, except for attempts to open small e-commerce sites, and generally in insignificant categories.
Retailers
- Who falls into the category – Stores and chains
- Where do they fit in the model – Direct/unidentified – Relationships with customers are direct, but as long as the customer can pay in cash, without having to leave identifying details, the relationship will be considered unidentified.
- What is the relationship model – Based on loyalty – The retailer can establish a loyalty program (member club) in order for the customer to have an interest in supplying identifying information. The loyalty program encourages identification in exchange for compensation.
- How do you disrupt the model – It is very hard to reach a state in which 100% of buyers are identified via loyalty programs. But, the more that subscription barriers are taken down (costs) and the level of program attractiveness is increased (compensation), the more likely it is that higher percentages of members will join.
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