Financial Relationships Essay

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Financial Relationships Shamarah Chambers – 16080006 OTEC302: Customer Relations Ms. Leena Thyagaraj, Instructor College of Business Administration and Hospitality Management Northern Caribbean University October 19, 2011 Question: Explain financial relationships in terms of frequent buyer programs. Answer: Financial relationship can be defined as the bond or connection between a company, firm or business, and its customers that form a basic footing through a financial link. Frequent buyer programs, of which most are based on financial incentives, are often reward or loyalty programs that are among the earliest efforts used by organizations to retain its best customers. Two prime counterparts of financial relationship is social bonding and structural-interactive relationships. Social bonding stipulates that the formation of a social bond between the organization and its customers may create a stronger relationship. A definition of social bonding can therefore be made as a friendly companionship or an affective tie. Prime examples of social bonding would be the Saturn barbeque and plant tours that the company hosts each year for its customers and Chrysler’s ‘Jeep Jamboree that is hosted for two days and nights for the company’s customers that through the various planned activities allows the customers to establish a bond with the company and other customers. Interpersonal interactions between people within the organization and customers strengthen the linkage and decrease the likelihood that the customer will switch providers; therefore, efforts that focus on social bonds may increase customer loyalty to the organization itself. Structural-interactive relationships use system design to solve problems, reinforce purchases, and recognize the importance of each customer. Relationships based on structural interactions do not depend on the

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