Benefits of relationship management

By Priya Chetty on October 30, 2010

Both parties benefit i.e., customer / firm from customer retention. It is not only in the best interest of the organization to build and maintain a loyal customer base, but customers themselves also benefit from long-term associations.

Benefits for customers

Customers will remain loyal to a firm when they receive greater value relative to what they expect from competing firms. Value represents a trade-off for the consumer between the “given” and the “get” components. Consumers are more likely to stay in a relationship when the gets (quality, satisfaction, specific benefits) exceed the gives (monetary and non monetary costs). Beyond the specific inherent benefits of receiving service value, customers also benefit in other ways from long term associations with firm. Research has uncovered specific types of relational benefits, these are:-

  • Confidence Benefits: These benefits comprise feelings of trust or confidence in the providers, alongwith a sense of a reduced anxiety and comfort in knowing what to expect. Across all of the services studied in the research just cited, confidence benefits were the most important to customers. e.g. Child Care Provider. Once the child care has been identified and established a satisfying relationship with a good caregiver family stress is reduced and the quality of life improved.
  • Social Benefits: Overtime, customers develop a sense of familiarity and even a social relationship with their service providers. In some long-term customer / firm relationship a service provider may actually become part of the customer’s social support system. A quote from the research where a customer describes her hair stylist: “I like him….. he’s really funny and always has lots of good jokes. He’s kind of like a friends now…’s you’re used to. You enjoy doing business with them”.
  • Special Treatment Benefits: Special treatment includes such things as getting the benefit of doubt, being given a special deal or price, getting preferential treatment. e.g. Doctor asking you to come is minutes before starting his consultation with the customers.
  • Benefits to the Organisation: The benefits to an organization of maintaining and developing a loyal customer base are numerous. They can be linked directly to the firm’s bottom line.
    • Increasing Purchases
    • Lower Costs
    • Free Advertising through Word of Mouth
    • Employee Retention

Priya is the co-founder and Managing Partner of Project Guru, a research and analytics firm based in Gurgaon. She is responsible for the human resource planning and operations functions. Her expertise in analytics has been used in a number of service-based industries like education and financial services.

Her foundational educational is from St. Xaviers High School (Mumbai). She also holds MBA degree in Marketing and Finance from the Indian Institute of Planning and Management, Delhi (2008).

Some of the notable projects she has worked on include:

  • Using systems thinking to improve sustainability in operations: A study carried out in Malaysia in partnership with Universiti Kuala Lumpur.
  • Assessing customer satisfaction with in-house doctors of Jiva Ayurveda (a project executed for the company)
  • Predicting the potential impact of green hydrogen microgirds (A project executed for the Government of South Africa)

She is a key contributor to the in-house research platform Knowledge Tank.

She currently holds over 300 citations from her contributions to the platform.

She has also been a guest speaker at various institutes such as JIMS (Delhi), BPIT (Delhi), and SVU (Tirupati).



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