Relationship Power Line Enhanced Transaction to Relationship Marketing Continuum and Insights into the Changing Practices of Marketing

Relationship Power Line Enhanced Transaction to Relationship Marketing Continuum and Insights into the Changing Practices   of Marketing


Over the last quarter century, there has been an undercurrent of activity that has affected the direction, role, and practice of marketing. The practice of marketing is going through a metamorphosis.  Not a simple paradigm shift, i.e. a shift in marketing standards and norms, as many proclaim (Peppers & Rogers 1995; Bejou 1997; Brodie et al. 1997; Gronroos 1997; Zineldin 2000l Watson et al. 2005), but an Isoquantic shift (Myers 1998).  John Sculley, former CEO of Apple, coined the term Isoquantic shift to recognize the effect technology is having on business, it refers to “…a significant technological advancement that dramatically changes the way people do things and completely re-orients people’s concepts of how things are done” (Myers 1998, p11).  Marketing is certainly faced with an Isoquantic shift, one that will significantly change how the marketing function works and what will be expected of it.  This article provides an overview of the drivers behind this shift and introduces a conceptual model, the Relationship Power Line Enhanced Transaction to Relationship Marketing Continuum, which can be used as a framework to ground future discussions on how marketers can respond to their changing role within an increasingly more diverse market and points the appropriateness Mobile Marketing practices within this context.

The role of marketing is shifting.  Prior to what is commonly referred to as the dawn of the Information or Digital Age, i.e. before computers, databases, the Internet, mobile phones, etc., marketers were primarily responsible with helping companies promote and sell mass-market consumer goods to a broad, generally anonymous, the audience (Dwyer et al 1987). In other words, they focused on Transaction Marketing, and their primary goals were to capture market share and generate as many discrete transactions as possible with as many people as possible.  However, since the dawn of the Information Age, things have changed and so has the practice of marketing.  Many interdependent catalysts can be singled out as being behind this change. For instance, globalization, reliance on services (e.g. services accounted for 67.8% of  U.S. GDP in 2006 (US Dept. of Sates 2007)), the hyper-fragmentation of media channels and hyper-competition (Becker 2005), introduction and maturing of new technologies (Berry 1983; Berry 1995; Bejou 1997; Zineldin 2000; Brohman et al. 2003); and the increasing power consumers have within and over the commercial exchange process (Fournier 1997; Hagel III & Rayport 1997; Watson et al. 2005).  In addition to the above catalysts there is one more that must be called out; that is, the fact that consumer attention is becoming a scarce resource.  Consumers are bombarded with advertising, messaging, choice, channels and more and their attention is limited (Parvatiyar & Sheth 1998; Mitchell 2001).  Getting through the market cacophony and into a consumer’s circle of awareness is becoming increasingly difficult. 

Many marketers have responded to this difficulty by employing Relationship Marketing, a term coined by Leonard Berry in 1983, and a practice founded in the earlier works of Levitt (1960), Arndt (1979), Bagozzi (1974, 1978), Day and Wensley (1983), Dwyer, Schurr, and Oh (1987), Levitt (1983), and Mancneil (1978) who all emphasized the importance of a consumer-centric focus on marketing practices and the fact that long-term buyer-seller relationships are critical for firm longevity.  Bejou (1997) notes that customer relationships don’t, or should not, stop at the initial sale but rather continue on. 

A significant body of literature has developed over the last 25 years around the topic of Relationship Marketing and a number of themes have emerged, including Service Marketing (Berry 1983; Berry 1995; Bejou 1997; Gummesson 2002); Database Marketing, Customer Relationship Management; One-to-One Marketing and Mass-customization (Peppers & Rogers 1995); Permissions Marketing (Godin 1999); Strategic Partnership Management; Customer Loyalty (Reichhel & Sasser 1990); Supplier Relationship Management; Internal Marketing (Gummesson 2002); and other generalized themes.  Out of all this work another theme, the understanding that the consumer is not the only relationship that marketers must manage, has also emerged. For instance, Morgan and Hunt (1994) identified 10 key constituents that marketers must form relationships with in order to achieve success and Gummesson (1987, 2002) identifies 30 key relationships that marketers must maintain and points out that firms need not only full-time markets but part-time markets as well, i.e. all customer-facing employees are marketers in some fashion.

The different forms of marketing that are discussed above, i.e. Transaction and Relationship Marketing (in all its forms) are not mutually exclusive.  Rather, Transaction and Relationship Marketing form the two poles for the Transaction to Relationship Marketing Continuum (Jackson 1985; Gronroos 1990).  This continuum, however, is not continuous; rather it is interrupted by an Intent Barrier.  The Intent Barrier symbolizes the need for marketers to align their rhetoric and actions with their intent and if they do not they run the risk of either damaging a profitable future with their customers or wasting resources with customers that will never turn a profit (Jackson 1995; Fournier et al. 1998; Mitchell 2006).

The Transaction to Relationship Marketing model can be further enhanced with the Relationship Power Line™, a line that represents which party has the locus of power and control over the relationship—the marketer or the consumer.  Historically, with traditional Relationship Marketing, i.e. those practices referred to above (CRM, Database Marketing, One-to-One Marketing, etc.), the marketer has almost total control over the timing, content, and related factors that formulate the marketer to consumer relationship.   As noted, however, in recent years consumers are gaining more and more control over these factors and the consumer is gaining more control and power over the marketer to consumer relationship.  In fact, two new models have emerged to describe customer centric control rather then marketer centric control, Customer Managed Interaction (CMI) and Vendor Relationship Management (VRM). Watson (2005) defines CMI as “A Customer directed interaction with a firm in which the customer manages the content, mode, and timing of data exchange in order to meet the customer’s goals,” while VRM is defined as “the reciprocal of CRM or Customer Relationship Management. It provides customers with tools for engaging with vendors in ways that work for both parties” (Project VRM 2007).

The following figure provides a visual depiction of the discussion above, with the Transaction to Relationship Marketing Continuum depicted along the horizontal plane and the Relationship Power Line defined along the Vertical plane, and both interrupted by the Intent Barrier.

In addition, the figure above highlights additional variables, such as time, communication style, relationship type, and trust which significantly influence the various styles of marketing.

Conclusion

We are entering a new era of marketing, one where the traditional rules and models are losing their effectiveness and one where customers have awakened to their new found power and control.  It is not the purpose of this article to go into detail regarding the two new themes presented here, the Relationship Power Line or Intent Barrier, or to define CMI, VRM, and the various forms of marketing along the traditional Transaction to Relationship Marketing Continuum.  Rather, the intent here is to raise the awareness of the changing face of marketing.  As for the practice of Mobile Marketing within the framework describe here, much work needs to be done.  It is evident from academic research, stories in popular press, and industry case studies that Mobile Marketing, i.e. marketing through the Mobile Channel, can be used for numerous forms of marketing, and the unique and personal nature of the mobile phone brings to the forefront the issues of relationship control, trust, communications styles, and more.   The customer, our markets, and marketing are changing and marketers must take heed of this in order to thrive today and in the future.

Michael Becker’s is Executive Vice President of Business Development for iLoop Mobile, a leading mobile applications platform provider.  Michael is on the Mobile Marketing Association (MMA) Board of Directors (2005, 2007), Chairs the MMA’s Academic Outreach Committee (2005~2007), and is a doctoral candidate of Business Administration at Golden Gate University. 

To provide feedback on this article, contact the authors at research@mmaglobal.com.

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Credits: Image by PIRO4D from Pixabay

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Michael Becker is an intentionally recognized identity & personal information management solutions strategic advisor, speaker, entrepreneur, and academic. He advises companies on personal information economy business strategy, product development, business development, and sales & marketing strategies. He also represents them at leading trade groups, including the Mobile Ecosystem Forum. Michael is an advisor to Assurant, Predii, Privowny, and Phoji. He is the co-author of Mobile Marketing for Dummies and a number of other books and articles related to mobile marketing, identity, and personal information management. He is on the faculty of marketing of the Association of National Advertisers and National University. A serial entrepreneur, Michael founded Identity Praxis, co-founded mCordis and The Connected Marketer Institute, was a founding member of the Mobile Marketing Association (MMA), and was on the MMA board of directors for ten years and was MMA’s North American Managing Director for three years. In 2004, Michael co-founded iLoop Mobile, a leading messaging solutions provider. In 2014, Michael was awarded the 2014 Marketing EDGE Edward Mayer Education Leadership Award for his commitment to marketing education.

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