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Introduction
Customer relationships are vital to the productivity and performance of modern businesses. Companies must establish an association with their clientele to improve the aspects of loyalty and satisfaction. Various strategies can improve consumer relationships, but they have to be tailored to precise objectives. Every business has a unique organizational structure and culture, and, hence, the strategies adopted should be specific and not generalized. The customer relationship approaches may have different features, but all aim to improve the success of businesses. Financial incentives and enhanced customization are one of the most efficient approaches which lead to increased customer relationships and brand loyalty.
Financial Incentives
Definition, Advantages, and Disadvantages
Financial incentives have been used across different markets to improve customer relationships. Monetary incentives entail offering specific financial gains to the clients to encourage positive actions toward the company (Wang et al., 2020). The progressive activities mainly include brand loyalty, marketing, and improved brand awareness (Hartline et al., 2000). Financial incentives are easy to use by organizations and require fewer resources to develop, especially human capital. In addition, their impacts are immediate to the market and help increase customer relationships quickly. However, rival firms can adopt the same strategy limiting any competitiveness growth a corporation may want to achieve. Companies also have to realize that financial incentive approaches are long-term and cannot be stopped irrespective of the monetary situation.
Case Example
AT&T is a company that has utilized financial incentive strategies to improve its customer relationships. It has used coupons and promo codes that customers can use to reduce their purchase costs, enhancing the company’s customer relationships. For example, in 2020, AT&T offered a 25% discount to first responders and military personnel on their wireless installation (AT&T Promo Codes, 2020). For a quick and direct impact on customer relationships, financial incentive strategies are recommended.
Enhanced Customization
Definition, Advantages, and Disadvantages
Companies have sought to improve their customer relationship via enhanced customization. It allows the business to offer customer-centered services where products are developed based on specific client preferences (Hartline et al., 2000). Accumulating customer preference knowledge is essential for the successful customization of goods produced (Schlager et al., 2018). Feedbacks and direct communications between the company and customers can be used to gain the mentioned knowledge. Enhanced customization leads to significantly improved brand loyalty by customers. Additionally, it is highly competitive, as rivals cannot replicate other companies’ customization processes (Schlager et al., 2018). Yet, it is expensive as it consumes human and financial resources to develop its framework. The impact on customer relationships is also gradual as it takes time to gain the customers’ product preference information. Enhanced customization is a sustainable and effective customer relationship improvement strategy.
Case Example
Nike Inc. is a case example of a company that has effectively utilized the enhanced customization approach. The company allows customers to modify shoe designs online and deliver the product (Nike by You, 2020). In addition, the shoes are personalized for each country, allowing customers to follow current trends (Nike by You, 2020). Nike Inc. has realized growing customer relationships and brand loyalty over the years using this approach.
Conclusion
Financial incentives and enhanced customization lead to improved customer relationships. While the latter’s impact can take a prolonged period to be realized, the former can be implemented to fill this gap. Using such approaches, companies can identify increased customer satisfaction, brand awareness, and loyalty. It is recommended that businesses conduct research on which customer relationship strategy is more effective in a particular situation.
References
AT&T Promo Codes 2020. (2020). Forbes.
Hartline, M. D., Maxham, J. G., & McKee, D. O. (2000). Corridors of influence in the dissemination of customer-oriented strategy to customer contact service employees. Journal of Marketing, 64(2), 35-50.
Nike by You New Releases. (2020). Nike. Web.
Schlager, T., Hildebrand, C., Häubl, G., Franke, N., & Herrmann, A. (2018). Social product-customization systems: Peer input, conformity, and consumers’ evaluation of customized products. Journal of Management Information Systems, 35(1), 319-349.
Wang, B., Li, S., Wang, Q., & Lin, Z. (2020). Understanding travelers’ mobility decisions in response to customer incentives. Transport Policy, 97, 113-120.
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