Relationship management is strategic

Relationships are strategic. Customer relationship management is an approach that has to be implemented across the entire company to achieve the desired output. As with any initiative in a company it is crucial that senior management acts as a role model and supports the initiative. If this is not the case most oft he efforts are just wasted and not sustainable.

However, considering relationship management as a strategic task there are various implications for the management. First of all there should be a sound understanding what a „relationship organisation“ is all about. Some important characteristic traits of relationship organisations are:


  • Willing to develop new possibilities through partnerships & strategic alliances
  • Non-core activities should be outsourced
  • Product development to turn ideas into products
  • Open relationships to employees
  • Use IT to serve the customer better
  • Customer satisfaction measurement linked to compensation & rewards structure
  • Market driven & customer led
  • Partnerships (any stakeholder) based on trust & commitment
  • Responsive & adaptable (provide information to and get information from stakeholders)


Six market model by Payne


Payne’s six market model (link here) helps any senior management to make sure that they have considered every “market” that is essential for relationship management. For each and every market a dedicated target could be set and a realistic approach planned. By doing this the executive can define how they want to orchestrate their marketing activities. Those six markets encompass:


  1. Customer markets
  2. Referral markets
  3. Supplier markets
  4. Employee recruitment markets
  5. Influence markets
  6. Internal markets



Customer markets

With the development from a transactional relationship to a relational relationship the marketing activities have changed as well. It is today the goal to moving customers up the marketing loyalty ladder to become an advocate of the company linking into the referral market element of the six markets model.

To achieve this many components have to be aligned like quality management, service management, customer retention management, complain management, innovation management, communication management and last but not least customer value management. Each component contributes to the holistic approach of relationship management to develop the customer step by step into a company advocate who recommends the company and it’s offering via word-of-mouth etc. A crucial point is to keep an eye on customer satisfaction to track the performance and the stage of a customer. Measures like the net-promoter score (that is a score measuring how many promoters and detractors a company consists of in a relational way on a scale of -100 to 100) could help to derive a portfolio view of your entire customer base.  However, as outlined in my previous entry it might be that customers don’t seek a relational relationship but a transactional relationship.


Referral markets

Referral markets are important to spread the word about the company and its offering. This could be done by customers and intermediaries. Kick-back incentives for a recommendation is a possible way how a referrer could be bought into this approach.

Many companies work with recommendation marketing because a satisfied customer or intermediary is always the best referrer without being biased. On the other hand referrals have a far wider reach then the company’s marketing efforts only. Today with the help of social media the word is spread in minutes across the globe with the means of e.g. Facebook, Youtube etc. It’s therefore essential that you offer the tools to spread the word across these platforms and make it as easy as possible for the referrer. Today’s digital native generation has really reinforced the “social spreading” gene and companies should direct their marketing initiatives into this direction as well.

On the other hand, negative word of mouth can be spread the same way. So it’s recommendable to track and monitor what has been sound on the market to intervene as early as possible.


Influence markets

Influence markets are markets that can change the rules of the game. Legal perspectives like laws etc. can quickly change the basis of your entire industry. It is therefore important to build relationships with the government, lobbies, authorities, regulators etc. Mostly this is a formal relationship with an interest of information exchange.


Supplier markets

The relationship between the company and its suppliers has undergone a change from just squeezing every drop out of the supplier to a relationship where customers needs are mutually anticipated and products build upon the needs. Companies always suffer if a supplier is suffering even if the good could be replaced or substituted by another supplier. Starting again a new relationship that carries some uncertainties has become a risk in a world where product lifecycles are getting shorter and shorter. The customer expects new products on a regular basis which again requires a sound and working value chain starting with the supplier.


Recruitment markets

Managing the recruitment market is an important strategic approach that has been neglected for a long time. Today, the most important resource of any company is not their goods or intellectual property but the employees. They are responsible for the ideas and innovation that leads to goods and intellectual property. Highly skilled people form a competitive advantage that can be sustainable if people can be retained. It is therefore extremely important and strategic to attract skilled people that again influence customer satisfaction – a virtuous cycle. This task is about employer branding by showing presence at universities, fairs and positioning the company in the minds of the people. Form that perspective it’s not entirely down to the human resource department but also a marketing task of each and every employee and department.


Internal markets

This market is about internal employees that act as internal customers and suppliers. Additionally, management has to ensure that employees are aligned to the company’s vision and mission. If everyone in the company acts in concert it can be ensured that the best possible output for the customer and the relationship could be achieved. By doing this it is paramount that the internal limits of processes etc. are not imposed onto the customer.  Managing internal markets is a central task of senior management.


The six markets model helps to consider each and every market of relationship management. However, not every market requires the same amount of effort and time. It is nonetheless important that every market is dealt with to ensure a holistic perspective of relationship management.








Customer centric MBA with 16+yrs experience focussing on personas and use cases to deliver added value to customers. Innovation and visual analytics addicted product guy.