Relationships have to add value for both parties, if it does not then it might be questioned if RM is appropriate. To establish the right approach, Mark Godson posits the Value Added by Relationships Model which discusses a supplier-customer relationship as value that is added by the relationship.
Meeting Customer Requirements Mass Customisation A supplier-customer relationship may add value by meeting a customer’s subjective requirements through interaction, traditionally used in service and business-to-business marketing. The customer now, however, demands products to meet their personal requirements and mass customisation, theorised by Godson, allows this. Nike By You is enables the customer to interact on their website to modify a product using various colour and material to create a design. Therefore, adding value for the customer because they are individually treated and adds value for Nike because customers directly interact with them as the service is specific to the Nike website.
Nevertheless, mass customisation may not be suited for all organisations. For example, FMCGs, are low involvement products and use a supplier-centric approach because they involve mass production and consumerism. Additionally, relationships cannot exist FMCGs markets. Implying that mass customisation might not be appropriate for this market so TM is best. Nevertheless, FMCG customisation seems to have been done, for example, Coca-Cola allows the customer to personalise a can using numerous graphic and text options. Like Nike By You, this is specific to the Coca-Cola website and adds value to both parties. This seems to suggest that mass customisation can be suited to various organisations.
Trust and Belonging Godson posits that when there is an element of perceived purchase risk, an organisation needs to prove to the customer that they can be trusted. Value may be added by customer’s social, personal and business networks thereby creating feelings of trust and belonging. These feelings can be created in regard to a beauty salon, for example, is promoted by word of mouth and network members trust the same salon because it is trusted by someone in their network. This could imply that in order for someone to buy from an organisation, they have to trust the product or service. Linking back to perceived risk, it may be argued that if it is a low-risk product, like milk, a network’s trust would not need to be relied on. Morgan and Hunt (1994), however, propose that trust is key to successful RM, which may suggest that if an organisation has a high-risk product or service, then RM may be the correct approach. In this context, Nissan is catering into high-risk product marketing and RM could be a more appropriate approach.
The Personal Touch Relationships may add value for the customer by interaction. The Service-Product Spectrum posits that it is unusual to have a service without a product and visa vera. Positive interactions with these products or services (previously discussed as moments of truth) might add value. Gummesson highlights the management of supplier’s physical environment as one of the four interactions in delivery of a service. If a dentist’s clinic is dirty, for example, a customer may question their hygiene, leaving a negative impression on the service, relating to coffee stain management. This could, therefore, suggest that bad interactions negatively influence customer retention. Although not all customers may be hygiene conscientious, suggesting that this may only be able to be applied to certain customers. Therefore, to ensure a positive customer impression, RM may be best suited for organisations with many interaction points.
From the above discussion, when considering a TM or RM, organisations should analyse their objectives, customer and service or product provided and apply the appropriate strategy to optimise their business. If their focus is customer retention for example, RM could be most beneficial. Ryanair, however, is an example of how their strategy to provide a competent service without direct focus on relationship management, is appropriate for them, hence they use TM. It could be argued that a combination of RM and TM may be a successful option.
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