Gupta had a word of caution too: Managing customer loyalty is powerful in theory but difficult in practice. More so, when a consumer is not necessarily a willing participant in a loyalty programme. According to Gupta, companies have to prove through their actions that marketing relationships are not empty, meaningless and stressful. Some other challenges of relationship marketing: devising appropriate systems and execution capabilities; developingthe right organisational structure; budgeting for lifetime customer value; managing an integrated communications programme; and building allianaces between manufacturers and retailers.

The key steps therefore, in one-to-one marketing were: identify your customer; differentiate your customers; interact with your customers; and customise your enterprise's behaviour.

To enhance effectiveness of relationship programmes, Gupta suggested that companies invest in sharper targeting; topical or timely rather than perfect communication; individual communication rather than general mailers; ensure the communication has a sensible offer to maximise response; not waste resources in purposeless image-building communication; keep up an ongoing dialogue with existing customers; manage the database of existing customers; respond quickly; provide information in a well organised, reader-friendly manner for faster decision-making; tie-ins, to help defray costs while enhancing value to the customer; greater physicalinvolvement, for better response.

Banking on loyalty
But is it equally important for every company to go for relationship marketing? According to Gupta, the concept works particularly well for companies in the service industry. For instance, banks tend to have high levels of loyalty --``it is easier to get people to open a second bank account than to shift their account.' Gupta drew from his experience in marketing ANZ Grindlay's credit cards, which in 1998 emerged as the fastest growing card brand. With a base of 1,000 card accounts in 1997, ANZ Grindlay's card accounts went up to 1,50,000 cards in 1998.

The strategy adopted was two-fold: gain new customers and two, communicate to/sell more to existing customers. The bank gained new customers through existing customers, cold prospecting, and other companies' customers with win-win proposals like the member-get- member (MGM) programme, retail bank cross-sell, Valentines' Day offer, Karvy mailer, Club list promos and others. On the other hand,selling to existing customers involved providing ongoing information and building the relationship; selling more products; rewarding with valuable offers from third parties with win-win proposals.

Bought loyalty Vs earned loyalty
Presenting a unique outlook was Devangshu Datta, head strategic service division, KSA Technopak, who held that customer loyalty can be both bought and earned. However, earned loyalty is more lasting and needs and creates a chain. ``Bought loyalty can only support and not replace earned loyalty. Earned loyalty needs and creates a chain,'' said Datta.

He opined that when it comes to the retail environment, operational factors are more important than commonly understood marketing factors. According to Datta, increasingly, power and influence in the supply (demand) chain is being held by the customers rather than the suppliers or retailers.

To this effect, a new breed of `channel creators' is emerging which deals directly with customers. These `channel creators', he said,own the `brand' with which the consumer identifies and which she/he trusts. `Their businesssuccess depends on intellectual assets which is understanding of a relationship with the consumer.''

According to recent research conducted by KSA Technopak in India, the two foremost factors that affected the choice of retail stores for consumers were: stores should stock good quality products `I-trust' and offer value-for-money. Reward or relationship programmes were way down their priority lists.

Datta's tips: Identify high-value customers and cultivate them through an ongoing exchange of information. Reward customers for their purchase behaviour. Build relationships with customers and retain them. Of course, it's all easier said than done.