Relationships, Loyalty & Trust

By: Cody Russell

Throughout this Marketing course, we have examined the consumer purchase decision process. Going even further in depth, we talk about RELATIONSHIPS. The relationships between the buyers and sellers in today’s economy all revolve around the words LOYALTY and TRUST and in doing so, making the customer not only satisfied, but truly happy with their purchase decisions.

More than often, a firm is faced with the decision of taking on new marketing strategies where servicing the customers becomes the primary goal. Whether or not the business is brand new, or going through a rough financial phase, exploring new marketing techniques is no longer a thought in the back of a company’s mind, but rather the next big move it has to make. Here are some of the resolutions which paid off for a couple organizations.

If you’ve ever driven by a corn stand with no one tending to it, then you’ve seen this strategy before. The sellers put trust in their customers to pay/take what they want. In doing so, they build a small relationship. Although most people may only pay a couple dollars, you’ll find more people giving more and more money all because they support the cause. In 2013, a San Francisco e-tailer Headsets.com promoted their business using this strategy. They call it “Pay what you want” and the only restrictions for this firm are that it must be a returning customer and only for a single unit. The founder and chief executive Mike Faith said that most customers pay the full price for two units valued at $119 and $319. In the article, Mike even states “Three customers have paid $1 so far for their unit, but we figure that is the price of doing business.” For headsets.com, the return on investment has been over 30% higher than what a normal marketing campaign would generate. Even though the prices have been reduced, they receive more sales per dollar of marketing which brings a higher overall return. He is also looking to kick the strategy up a notch to what he thinks will bring an extra 6%-8% in revenue this year. Faith’s final statement was “We’ve had 48 new accounts opened under pay what you want, but we expect to open several hundred in the next quarter.”

Now comes the interesting one, “Sending your business elsewhere.” Back in 2009, a London coffee shop called Prufrock ran a campaign which confused a large group of city workers. Instead of the standard loyalty cards you see from most businesses, their method of choice was a “disloyalty card.” That’s right; by patronizing 8 locally competing coffee shops and getting a card stamped there would entitle them to one free cup of Prufrock coffee. This strategy received so much attention business revenue rose 18%-20% just in the first three months of customers coming in for the cards. Although co-owner Gwilym Davies wants to give full credit to the marketing stunt, he has to account for the publicity it caused the business.

The last marketing strategy I’m going to talk about is called “Good turns pay off.” At this point, it might as well be called trading because little to no money is involved. In these relationships, it can be between a buyer and seller or even two buyers! But if you are trading goods/services you aren’t making any money right? Wrong. There are many ways two companies can trade services. Here’s an example to show how a little service trade can benefit both parties. My dad owns a Towing company out of Oceanside, CA. He had a good friend he grew up with go into the chiropractic business. They worked out an agreement so that they only charge what is covered by the insurance companies. My dad and mom both get adjusted once a week every year. That’s 104 weeks total. The average cost for a chiropractic visit at Mr. Walwick’s is $40 dollars and my parents insurance only covers half. So in return, 20 x 104 equals $2,080. If he charged my parents full price, they might only go a few times a year but because they don’t pay anything after insurance, it’s as if it were free. Not only do my parents save $2,080, but Jon’s business gains over $1,500 which he wouldn’t get from charging us full price. It’s also the same, vice versa. If he ever needed a tow (which can total a couple hundred dollars per tow/lockout), we’ve got him covered.

Healthy relationships are not only what keeps businesses going, but what makes them thrive as well. Without relationships, a happy business trade turns into a simple and meaningless transaction. By developing these everyday bonds with one another, we make deals; Deals that not only benefit ourselves and save money, but make for easy “hassle-free” trades with good friends who are in it together for all the same reasons.

Source: http://video.foxbusiness.com/v/968496825001/the-importance-of-relationships-in-building-a-business/

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6 thoughts on “Relationships, Loyalty & Trust

  1. Yuxuan Wang February 24, 2015 / 3:58 am

    I agree with your point, especially your last paragraph, I can’t agree anymore. In my opinion, loyalty and trust are the core value of Marketing. It can enhance the relationship between customers and business, make the marketing process more efficient, and increase the success possibility of their strategy. We know a successful marketing strategy could not just focus on this point. But this article makes a clear definition and uses a good example. Good job.

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  2. Mattia Lanzi February 25, 2015 / 8:57 pm

    I also totally agree with your point of view. For example, even huge brand name as NIKE use loyalty and trust with its customers. A good example is that Nike and Adidas are the two most popular brands in the world of soccer; but what makes Nike the number one with most sold items is because Nike has a service with its costumers that when you buy a pair of soccer shoes and you are tired of it, or maybe those are broken you can ship them back and can have a new pair of soccer shoes for free. Customers trust Nike for what it offers, and even Nike is already a big brand, thats the detail that makes Nike the best on the market. You used great examples that explain your point. Great work.

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  3. Michael Scuderi April 25, 2015 / 12:03 am

    I agree with this strongly because relationships is the only way the buy and selling process works. and in the business world you have to form a lot of relationships some you may like and some you my hate this is why you must from healthy relationships so you can have enjoyable long lasting and hopefully lucrative relationships.

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  4. Briana Lynch April 28, 2015 / 12:30 am

    I’m glad you stressed the importance of positive relationships between businesses and consumers in this post! I witnessed the power of these relationships last summer. I work for Market Basket and I was fortunate enough to be a part of the protests during the summer of 2014. Essentially what happened was the CEO, Arthur T Demoulas, was ousted by his rival cousin and the board of directors. What happened next astounded several business professionals. We employees stood behind our CEO and our faithful customers stood behind us. It wasn’t our low prices that made this a worthy cause for our customers. Instead, it was the high quality service we’ve provided them over the years. In the end, we defied the odds and won the company back together. Without the strong relationship between Market Basket and our customers, I am positive that Arthur T Demoulas would never have been reinstated as CEO and the Market Basket that we know and love would cease to exist today.

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  5. James Wagner April 28, 2015 / 4:15 am

    I am 100% a firm believer that life is all about the people you know and the connections you make. Relationships with customers is how your company gets popular. The company has to put its customers first. The importance of the customer relationship is extremely important to gain further customers and please current customers. Loyalty and Trust are big components to the integrity of the company. A company that doesn’t value its customer relations is a company that has very little integrity. You don’t hear about top performing companies that have a half decent customer support. It’s important to every company to keep up with their customers.

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  6. Megan Lac May 6, 2016 / 12:04 am

    I agree with the point that customers value loyalty and trust. Any consumers are loyal to a company because they have done business with a company before and can trust the quality they’re going to get instead of going to a different business all of the time. If, for example, somewhere like Starbucks messed up a customers order every time they ordered something the trust would be betrayed a customer would no longer be loyal.

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