Proactive relationship management

Date of publication: June 15, 1993

Abstract:

Expectation research has shown that high quality products, or services coupled with only an effective reactive support mechanism (i.e., a typical customer service function), will not be sufficient to support consumer loyalty into the next decade. Product/service providers must now take the next step; to proactively initiate a mutually beneficial relationship with their customers. This relationship should offer continuous support to the customer thus ensuring a reduction in attrition caused by product/service and process imperfections, the end result being long-term profitability. For the purpose of this paper, the relationship development process will be called proactive relationship management (PRM). Simply stated, PRM is proactive and ongoing communication with the customer via telephone throughout the product/service ownership or use period for the purpose of enhancing the potential of long-term loyalty. The specific benefits of PRM include: Real-time voice of the customer feedback for product/service improvement; Measurement of future product/service expectation; Identification of silent customer dissatisfaction; Enhancement of the ability to predict future purchase activity through customer database management; and most importantly, An increase in repurchase intention or loyalty through the smoothing of transactional dissatisfaction and the development of trust. The PRM process is essentially a customer retention strategy hybrid and should be an integral part of a company’s customer service, customer satisfaction, and quality improvement mechanisms. Generally speaking, companies that can overcome the logistics problems associated with identifying each customer on an individual basis, contacting them in an ongoing manner, and offering them support with an effective infrastructure will see the most impact in terms of enhancing the potential acquisition of long-term customer loyalty. This document is just the beginning of ongoing research and concept development in the area of leading edge proactive customer retention and offers the following insight: A detailed explanation of PRM including benefits and pitfalls, implementation methodology, and its role in the corporate customer satisfaction/quality improvement strategy; and, Quantitative research showing consumer expectation and acceptance of PRM and the positive impact it provides on loyalty benchmarks such as customer satisfaction, willingness to recommend, and repurchase intention.

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