What kind of relationship do you have with your customers?

As marketers, we are always looking for ways to build the relationship between our brand and our customers. It's more profitable to maintain a relationship with an existing customer than to recruit a new one and our loyal customers are the ones that can tell us what we are doing well - and badly.

That's why it's important to understand what kind of relationship we have with our customers and segment our customer base accordingly.

According to Ehrenberg et al, most customers exhibit 'polygamous loyalty' - in other words, they have a shortlist of trusted brands they do business with. Donaldson and O'Toole have suggested that there are four types of relationship we can have with our customers:

		ACTION COMPONENT
		High	Low
BELIEF COMPONENT	High	Close	Recurrent
	Low	Dominant partner (hierarchical)	Discrete

Close relationships are most likely in corporate or private banking, where the proposition is bespoke to each individual customer and switching costs are high. These days, we should probably add those customers most keen to interact with our brand: the ones that write to us with suggestions, set up fan pages, blog and tweet about our brands. These customers can become 'lighthouse customers' (Prokesch 1993) who are willing to be actively involved in focus groups, new product development and so on.

Dominant partner relationships are those where one party has (or perhaps is perceived to have) all the power - these relationships have low levels of trust and the subordinate party is probably keen to find a better relationship with another partner.

Recurrent relationships are those where the customer tends to choose the same brand but would find it easy to change to another - for example instant access savings account customers.

Discrete relationships are those where the customer makes each purchase decision individually and won't favour the existing provider - for example 'rate tarts'.


We can move customers from one category to another and increase their loyalty by increasing their trust in our brand - according to Sako, we do this by keeping our promises, performing competently, and exceeding expectations through 'goodwill' actions - the warm and fuzzy stuff that makes customers likeand identify with your brand as opposed to seeing their product as a commodity.

I think it is this final element that is most important - keeping promises and being competent are, surely, hygiene factors - it's expected and therefore will go unnoticed and unrewarded.

However, demonstrating a willingness to treat our customers as people will encourage customers to invest in a relationship with us that moves beyond the products they hold now. The better we do this, the more likely we are to be prioritised among the brands to which our customers are 'polygamously loyal'.