Evolution of Relationship Marketing in the Digital World
Abstract: The digital world has immense potential that has yet to be tapped into; with each new phase, an opportunity to alter many marketing theory and practice arises. This review will look into the aspect of relationship marketing and the influence of social networks sites, particularly social media to consumers’ behaviourism and expectations; and how organisations need to identify the increasing challenges in managing customer relationship.
1. Introduction
As aptly described by Castells (2000), the network society that has evolved over the last decade, has made a spectacular makeover in relationship marketing; a paradigm shift from being monopolised by large organisations to having a consumer stronghold.
Relationship marketing has been impacted with the emergence of the digital world and consumers’ dependency and behaviour towards social network sites and will be reviewed here to identify how organisations have evolved to adapt to the changes in the game and re-define their business goals – “engage consumers into a platform; to sell products, to generate contributions, to get people to join conversations” (Scott, 2012, p.33).
2. Relationship marketing redefined
2.1 Definition “Relationship marketing is defined as is a process of maintaining and enhancing relationships with customers and stakeholders for mutual benefit” (Berry, 1983; Gronroos, 1994; Morgan & Hunt 1994). Berry (1995, p237) rightly pointed out that being “on marketing’s backburner for so many years, relationship marketing now sits on the front burner”. In a recent white paper by IBM, it explains that “relationship marketing is architected to manage relationships as a means for extracting the greatest value from customers over the lifetime of the relationship. These strategies typically concentrate on the operational responses required to manage the customer.
2.2 The digital world
With social network sites, though, customers (and their highly influential virtual networks) are now
1. Introduction
As aptly described by Castells (2000), the network society that has evolved over the last decade, has made a spectacular makeover in relationship marketing; a paradigm shift from being monopolised by large organisations to having a consumer stronghold.
Relationship marketing has been impacted with the emergence of the digital world and consumers’ dependency and behaviour towards social network sites and will be reviewed here to identify how organisations have evolved to adapt to the changes in the game and re-define their business goals – “engage consumers into a platform; to sell products, to generate contributions, to get people to join conversations” (Scott, 2012, p.33).
2. Relationship marketing redefined
2.1 Definition “Relationship marketing is defined as is a process of maintaining and enhancing relationships with customers and stakeholders for mutual benefit” (Berry, 1983; Gronroos, 1994; Morgan & Hunt 1994). Berry (1995, p237) rightly pointed out that being “on marketing’s backburner for so many years, relationship marketing now sits on the front burner”. In a recent white paper by IBM, it explains that “relationship marketing is architected to manage relationships as a means for extracting the greatest value from customers over the lifetime of the relationship. These strategies typically concentrate on the operational responses required to manage the customer.
2.2 The digital world
With social network sites, though, customers (and their highly influential virtual networks) are now
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