how can companies build strong relationship with customers

HOW CAN COMPANIES BUILD STRONG RELATIONSHIP WITH CUSTOMERS

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Buyer relationship can be classified into 8 categories:

1. Buying and selling2. Bare bones3. Contractual transaction4. Customer supply5. Cooperative systems6. Collaborative7. Mutually adaptive8. Customer is king

Buying and Selling:

Simple routine exchanges with moderate level of cooperation and information exchange.

Bare Bones:

These relationships require more adaptation by the seller and less cooperation and exchange.

Customer supply:

In this traditional custom supply situation, competition rather than cooperation is the dominant form of governance.

Contractual Transaction:

These exchanges are defined by formal contract and generally have low levels of trust, cooperation, and interaction.

Cooperative Systems:

The partners in cooperative systems are united in operational ways, but neither demonstrates structural commitment through legal means or adaptation.

Collaborative:

In collaborative exchanges, much trust and commitment lead to true partnerships.

Mutually Adaptive:

Buyers and sellers make many relationship-specific adaptations, but without necessarily achieving strong trust or cooperation.

Customer is king:

In this close, cooperative relationship, the seller adapts to meet the customer’s needs without expecting much adaptation or change in exchange.

Business Relationship: Risks and Opportunism

Vertical coordination can facilitate stronger customer-seller times but at the same time may increase the risk to the customer’s and supplier’s tailored expenditure for each other.

Opportunism:

Opportunism takes place when buyers can’t monitor the supplier’s performance properly. It is some sort of cheating or under supply relative to an implicit or explicit contract.

New Technology and Business Customers:

Top firms use technology to improve the way they do business with their B2B customers.

Disclaimer:““These slides were created by Shine Ali, MEC Cochin, during a marketing internship by Prof. Sameer Mathur, IIM Lucknow (See www.IIMinternship.com)”