Close customer relationships are important for profitability growth of any business organization. To maintain customer loyalty in today’s competitive business environment, access to accurate and complete customer information is a recipe in any business. Internet-based customer relationships allow business organizations to manage customer records, monitor the sales opportunities, and process customer orders over the web. Web-based customer support systems enable businesses to receive and send feedback hence maintaining close contact with the customers. The internet also allows sharing of customer information between businesses, which promotes business-to-business customer relationships. While customer relationship management is important for all business organizations, web-based relationships provide an even bigger opportunity for a business to expand.
Business-to-Business Relationships (B2B)
Internet-based customer relationships management can help promote business-to-business customer relationships. However, managing B2B customer relationships is challenging, as it requires customer/partner information disclosure (Berry 2004, 67). For a business organization to develop an effective customer relationship management, acquiring relevant customer information is fundamental. In most cases, the disclosure of customer information is often a problem, which in turn affects the proper implementation of a B2B strategy.
In internet-based B2B, poor customer relationships will influence customers to terminate the contract. In B2B relationships, customers seek partners who communicate regularly with honesty and transparency. B2B relationships can influence customers to seek better services from the competitors by accessing the information from the B2B relationships, as most customers prefer quality customer service.
Another factor that affects B2B customer relationships includes the global economy. The global economy affects a corporation’s investment ability to maintain B2B customer relationships (Xu and Chou 1997, 112). Also, the global economy influences customer purchasing power. B2B customer relationships keep on changing making it hard for an organization to develop a stable customer relationship management. B2B customer relationships increase competition between business organizations. Organizations that do not offer quality customer service or embrace necessary changes risk losing customers.
Organizations implement various strategies to strengthen future B2B customer relationships and remain competitive. Most organizations have long-term B2B customer relationship planning to explore the possible success factors that enhance customer relationships (Tanner and Erffmeyer 2009, 65). Companies should also invest in collaborative training that involves the customers as a way of promoting channel partner selling. Also, future B2B relations should focus on involving vendors or intermediaries to promote widespread B2B customer relationships. Organizations should expand their B2B customer relationships to include delivery of items ordered.
In conclusion, B2B customer relationships have brought radical changes to the e-commerce market as customers can access a firm’s information. However, B2B relationships are influenced by the willingness of a firm to disclose customer information and the global economy.
Business-to-Customer Relationships (B2C)
The internet-based customer relationships allow access to real-time customer information and sales information, which allows firms to respond to customer inquiries and sales requests. In B2C strategy, a firm sells products directly to retail customers. However, the B2C relationship model has some weaknesses. Firstly, fraud is common in B2C relationships where “unscrupulous traders market counterfeit goods to unsuspecting customers” (Jones and Sasser 1995, 88). Secondly, systems breakdown greatly affects B2C relationships as the transactions are affected by system shutdowns. Another weakness of the B2C strategy is that firms have to spend more money on advertisements through the internet to attract more customers. A B2C firm only focuses on a few individuals who in turn contact people directly.
B2C strategy can also be affected by logistics given the number of clients that a B2C firm has to keep track of and manage their records. Also, B2C strategy increases the risk of a firm producing products that customers do not need (Christopher, and Kauffman 2002, 155). The B2C firms cannot compete effectively with the B2B companies because B2B firms usually hire fewer agents who keep close contact with the customers. In B2C companies, the retailer usually has to pay the sticker price to acquire the product with no discounts or price reductions. B2B firms, on the other hand, give discounts when subcontracting its services to another smaller firm.
The B2C companies usually face logistical challenges regarding the processing of customer orders and delivery of the ordered products. In the future, B2C firms should focus on employing a third party to facilitate distribution activities. Other services such as customer support, packaging, and transportation can also be delegated to a third-party firm (Butanay and Wortel 1988, 52). Future B2C relationships will involve more interactions with the customers, expansion of the product variety and global access to the products (Cortheoux 2003, 117). Also, future B2C relationships will look into the interests and preferences of the customers before producing the goods and establish a feedback mechanism with the customers.
In conclusion, a B2C strategy promotes business access to a wider customer base whereby the retail customers transact business directly with the B2C firm without involving other smaller firms. However, this strategy has logistical challenges involving processing of orders, making customer deliveries and management of customer records. The future for B2C relationships lies in the inclusion of intermediaries and vendors to facilitate customer service.
Berry, Lindell. 2004. Relationship Marketing: Emerging Perspectives on Service Marketing. Chicago: American Marketing Association.
Butanay, Gregory, and Wortel, Harry. 1988. Distributor Power versus Manufacturer Power: The Customer Role. Journal of Marketing 21, no.3: 52-53
Christopher, Allan and Kauffman, John. 2002. Relationship Marketing: Creating Stakeholder Value. Oxford: Butterworth Heinemann.
Cortheoux, Richard. 2003. Modeling Multichannel Response Behavior. Interactive Marketing. 5. no. 2 : 117-119.
Jones, Tim, and Sasser Wesley. 1995. Why Satisfied Customers Defect. Harvard Business Review, 88-89.
Tanner, John, and Erffmeyer, Robert. 2009. Sales Management Future Sales Leaders. New York: Prentice Hall.
Xu, Yong, and Chou, David. 1997. Adopting Customer Relationship Management Technology. London: McMillan Press.