Customer-Relationship Strategies and Management

Learning Objectives

  • Describe how businesses use buyer personas to better understand the target customer
  • Define customer relationship management
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A situation analysis can reveal whether a company’s relationship with customers is a strength to be exploited or a weakness that needs to be addressed. In many cases it’s a bit of both. For instance, a company might have loyal customers in one demographic but fail to hold the attention of customers in another demographic.

The question, then, is how do companies evaluate the quality of their customer relationships, and what approaches do they use to develop and maintain strong customer relationships? We will explore the answers to these questions in greater depth throughout this course. For now, we’ll touch on an approach that companies use to incorporate their customers in strategic planning and some of the tools they use to connect with them.

Buyer Personas

The basis for a strong relationship is getting to know and understand someone well enough to form a connection. The same is true for company relationships with customers. The trouble is that companies rarely have a chance to personally connect with individual customers—much less with all of their target customers.

Marketers use something called “buyer personas” to get a more accurate picture of the customers they’re trying to connect with and also to help them think of customers as real people. Buyer personas are fictional, generalized representations of a company’s ideal, or typical, customer. They help the marketer understand current and potential customers better. As a marketer, knowing whom you’re trying to reach and attract makes it easier to tailor your content, messages, product development, and services to the specific needs, behaviors, and concerns of different groups. For example, instead of sending the same email message to all potential customers, marketers will create a unique message for different buyer personas that aligns better with their personal interests and values.

Example of buyer persona write-up: Kyle Fisher: Potential Drake Motors Small SuV Buyer. Includes photo of smiling middle-aged man with the caption "I want a vehicle with outstanding fuel economy, smart features, and enough space for me and my family." Personal profile: Kyle is a 42-year-old and owner of a late-model Ford Escape. He's an active father of two, still plays team sports and is always connected to friends and the family through the internet and his mobile phone. Kyle is looking for a vehicle that offers outstanding fuel economy since he commutes approximately 90 miles round trip each day. He's also considering the Ford Escape Hybrid, Toyota Highlander, the Honda CR-V and the Ford Flex He uses a variety of review and third-party print research sites in addition to dealer catalogs. Kyle's product-content needs: information supporting fuel economy; photos and video that highlight vehicle's technology and stylish features; guidance, education, and reassurance that the brand can be trusted; competitive comparisons to his current vehicle; ability to gather and share information easily. Background: 42-year-old Caucasian male; father of two; plays drop-in hockey 3 mornings a week; uses vehicle daily for commuting, picking up kids from sports, weekend coaching and vacations; drives long distances and puts 20,000 miles on vehicle every year. Attributes: upper-middle class; smartphone and laptop user; influenced by online reviews, heavy user of print; iPod and Smartphone user; spends time reading in social media researching, but less time contributing.

Figure 1: Buyer Persona

Typically, a buyer persona will have a name and a story, as in Figure 1, above. The story will include information about how the persona spends her time and details about her interests, her concerns or fears, and her goals. Often, the write-up will explain what the persona wants from the company and its products to help marketers to use the information consistently. Each of these details helps the marketer focus on developing relationships with real people, and that results in a more personalized marketing plan.[1]

The strongest buyer personas are based on market research—both the information that is broadly available and information the company gathers through surveys, interviews, and observations of customer behavior.

Once a company understands its buyer personas, how can it match those to real people who will buy its products or services? Today, companies use significant amounts of data and complex technology systems to create the right match in what it offers to individuals and groups of buyers.

The American Marketing Association defines customer relationship management in the following way:

A discipline in marketing combining database and computer technology with customer service and marketing communications. Customer relationship management seeks to create more meaningful one-on-one communications with the customer by applying customer data (demographic, industry, buying history, etc.) to every communications vehicle. At the simplest level, this would include personalizing e-mail or other communications with customer names. At a more complex level, customer relationship management enables a company to produce a consistent, personalized marketing communication whether the customer sees an ad, visits a Web site, or calls customer service.[2]

Customer relationship management brings data and technology together with the marketing mix to increase the personal connection with the customer. Let’s look at an example. Harley Davidson has a famously strong brand. This video provides a glimpse into the relationship that customers have with the brand and shows how a new technology is assisting the company in expanding its connection with customers.

What are some elements of the Harley Davidson buyer persona?

How is technology being used for customer relationship management?

Check Your Understanding

Answer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does not count toward your grade in the class, and you can retake it an unlimited number of times.

Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.