Marketing Case Study
Statement of the Problem
The issue of the case study lies in the threat of failing to retain old customers due to poor personal relationships established by the company’s sales personnel. Having been ranked poorly when it came to customer retention, Mr. Buddy saw that the company would go out of business in the next three years. The sales personnel had failed the role of relationship selling and this was bound to affect the company negatively. Additionally, there is a lack of agreement between the company’s personnel like Buddy and Laura on the most effective method of creating a long lasting personal relationship with key customers.
Summary of Facts
In this scenario, much emphasis is put on follow-up when it comes to maintaining good and long-lasting customer relationships based on Mr. Buddy’s perspective. During the years that he has been working at Onmico, he turned out to be the top salesperson while setting an impressive record within the company. According to the company’s information, most of its success attributes to loyalty that he had managed to aspire in his customers over the years. For him, golf and the activities involved in the golf course built the kind of loyalty that has saved the company today. Based on his performance, Buddy got a direct approval to become the company’s sales manager. Here, he discovered the threat the company was in when it came to retaining long-term relationships with its clients. His conclusion was that the sales people had failed to appreciate the importance of relationship selling hence his first goal. From the financial analysis, he concluded how difficult and expensive it was to acquire new customers than maintain the existing ones. Additionally, he mentioned that the continuous loss of customers would affect the business three years down the line. His suggestion was the cultivation of closer and more personal relationships with the most important customers using the golf course. A number of employees, Laura Kilburn being one of them, rejected his suggestion. For Laura, the only thing that helped retain customers was the improvements of the company’s products and services. However, she agrees with Buddy’s idea of follow-up that can also be achieved away from golfing (Crosby & Johnson, 2000).
From the case study, it is clear that Buddy’s strategy has always worked for the entire time in the company. Here, the good relationship he creates with the clients’ results in loyalty hence the success of the company. In this case, there is proof that business success is dependent on customer loyalty and personal relationships established over time. It is evident that the company would not have been successful without the good relationships established by the personnel. In this scenario Mr. Buddy uses the only means he finds comfortable: golfing. While others fail to agree with this approach and refer to it as being old school, he finds it easier and more appropriate when it comes to achieving business goals. Having foreseen the threat of losing customers in the next three years, he blames in this the sales person’s lack of relationship selling which has always been effective. When compared to other companies of its kind in the customer retention analysis, Omnico turns out to be below average. Any company has to call for all forms of actions. Here, he decides to take up relationship selling which turns out to be effective on his part. The other method suggested by his counterpart was through the provision of quality goods and services which does not rely on relationship selling, as Laura claims in the case. Based on the information presented, both systems can be effective for clients’ retention (Bollen & Emes, 2004).
From the conducted analysis, it is clear that the company has failed to establish the right personal relationships with its customers. Most research studies show that friendliness towards customers is a key factor when it comes to building good relationships and, consequently, loyalty. Here, the company would need to employ all possible means to promote relationship selling. Apart from golfing, the company could offer promotions and packages or other forms of benefits for its loyal customers to ensure their long-term retention. The company management could provide resources, additional information and other solutions to its customers. The idea behind customer relationship and loyalty does not always have to come from them paying for satisfying goods and services. Whichever method the company decides to use, the end goal should be making its customers feel important and appreciated. Omnico could introduce a loyalty program that would help in the product and service marketing while aiming at customer attraction.
In conclusion, both solutions provided by Mr. Buddy and Laura are appropriate. However, I would side with Buddy’s decision of using golfing to ensure interaction with customers. Putting business and money away from the relationship would encourage loyalty and therefore a long-term benefit for both customers and the company itself. Additionally, good personal relationship promotes communication between clients and the company. This way, it would have been easier for the company to know where the average rate of retention lay as compared to its competitors. Omnico could take up the habit of responding promptly and making frequent follow-ups to ensure no customers are lost to its competitors. Mr. Buddy’s idea is investing much when it comes to taking care of company’s current customers rather than attracting new ones in the coming years. Just like Buddy suggests sales people going into golfing, the company could also train employees on relationship selling.