The management of relationships has been a facet of business for as long as business transactions have existed. On the most basic level, Relationship Management is about interaction with customers. From a broader perspective one can consider employees, suppliers and consumers as customers, the employees being the internal customers of the organization. Relationship Management deals with the treatment and management of partnerships, connections, linkages and chains between business entities.
For the purposes of this paper, we view Relationship Management (RM) as a conscious and planned activity. It would be misleading to suggest that there have not been relationships in business or any focus on relationships by companies. However, the thrust of RM, as expounded in recent times, points to a more tactical and strategic approach to focusing on the customer rather than a relentless focus on the competition.
After the economic downturn of the 90s, many companies started to examine the possible benefits to be gained from less negotiation strong-arming, closeness to suppliers and the establishment of constructive relationships with strategic stakeholders. This does not suggest that RM was founded in the US, or has not existed before then; the Japanese had perfected RM and value-concretisation into an art form on the basis of social structure and communal creed.
RM itself has not just many types but many levels. The manufacturer has his suppliers and the end users as his customers; the retailer has the manufacturers and the end users as his customers, and manufacturer, the supplier and every organization with a tactical or strategic agenda have internal customers.
There have been several different sub types of Relationship Management introduced by writers, marketers and business pundits, starting from the most widely known Customer Relationship Management (Buttle, 2004; Kracklauer, Mills & Seifert, 2004) to Customer Centricity (Gummesson, 2008); Collaborative Customer Relationship Management (Kracklauer, Mills & Seifert, 2004); Supply Chain Relationship Management (Kracklauer, Mills & Seifert, 2004), Integrated Supply Chain Relationship Management (Kracklauer, Mills & Seifert, 2004), and so on. Hines (2006) delineates three types of relationships: the strategic alliance, the functional partnership and the one-sided partnerships. Donaldson & O’Toole (2007) outlines four types of relationships: partnership, friendship, adversarial and detachment. Our discussion here centres on four components of Customer Relationship Management: Customer Identification, Customer Attraction, Customer Retention and Customer Development; all of which, for the purposes of this paper, we shall consider all of these under the blanket term Relationship Management; Relationship Marketing, the management of, not the cooperation with customers; the latter being the job of relationship management, is not within the scope of this paper but since from a conceptual perspective, the difference between the two may not be as simplistic and marked, it may be mentioned or discussed in passing.