Relational vs. Transactional Marketing

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Everyone loves a good salesperson.

Sound strange?  Maybe.  But it’s true, so why does it sound so wrong?

The problem is, we remember all of our bad experiences with bad salespeople and project it onto the good ones.  Nevertheless, the good ones always find a way to make us happy again.

What’s the difference between a good salesperson and a bad one, then?  It’s about the  approach. 

Bad salespeople approach their interaction with you trying to get a sale.  This way is a transactional approach.  If you buy, they win. If you walk away, they lose.

However, good salespeople approach their interaction with you trying to establish a relationship with you.

If they win your trust, they win, even if the sale doesn’t materialize.

There are advantages and disadvantages to both approaches.

The transactional way generally makes more sales in a shorter time. The relational way takes more time to produce the same sales volume but has a higher repeat business.

But while higher sales volumes with shorter sales cycles are tempting, transactional marketing has some severe disadvantages.

While doing well at producing sales, transactional marketing performs poorly at motivating the next sale. If all you want is one time sales, then transactional marketing is the way to go.

Customer satisfaction is minimal with transactional marketing. Even if customers know they’ve got a fair deal, their satisfaction level will remain low because they don’t feel pleased with the final transaction.

No one’s impressed with even-steven. 

Customers aren’t “wowed” with an equal exchange of value. It’s hard to get customers to consider a second, let alone a larger purchase after the first one if it’s merely a fair deal.

Transactional marketing creates very little word of mouth. Customers simply don’t talk about their mediocre experiences with their friends. 

If your marketing is only aimed at the transaction, then that’s all you’ll get.

If you want access to your customer’s extensive network of friends, then you’ll have to take the time to build a relationship with them by creating an experience that they’ll love. If you don’t, then all you’ll ever get is the sale.

Transactional marketing forces you to drive down your prices. Without the social proof of word of mouth advertising or the allure of a relationship with an authentic company, your customer has little incentive to buy if the price is a little steep for them. 

Once this happens, it’s a race to the bottom. The top question in your customer’s mind will be: Can you beat your competitor’s price? This is not a good place for your business to be.

In stark contrast to transactional marketing, relational marketing makes better business sense in the long run.

In relationship marketing, you listen to your customer. You get to know them.

Through relationship marketing, you gain the consumer’s trust by giving them marketing content that will help them solve a problem even if they don’t buy your product. Your generosity forms the basis of your relationship with the consumer.

Customers are more comfortable talking with a person they trust. So now, you won’t be the only one talking. Your customers will tell you what they want, what they need, and how they want their vendors to provide services to them.

Here are some of the biggest advantages of getting to know your customers through relationship marketing.

1. Your customers will help you get your marketing right. Wondering what will motivate them to buy? No guessing. They’ll tell you!

You’re wondering what changes you need to make to your product to make it more appealing? Just sit back and relax. They’ll tell you.

When you take the time to know your customer before pushing the sale, you’ll be able to hear from them what they like and don’t like about what you’re offering.

2. You’ll experience a higher rate of repeat sales. People will keep coming back for more if they feel you know them. Your products will keep getting better suited for your audience, enticing them to come back and buy from you.

3. Customers will experience longer satisfaction with you and your services. Even if your product is no better than your competitors’, your customers will still feel happy they bought from you because you know them.

Everyone wants to be heard, noticed, and taken seriously. Do this with your customers, and you’ll have a loyal audience of fans willing to buy whatever you come up with next.

4. When your customers are feeling good about their experience with you, they’ll be happy to share you with their friends. Give them a buying experience that outshines their expectations, and you’ll give them something to talk about with their friends.

Word of mouth is relational by nature. Friends talk to friends. When you position yourself in your customer’s mind as a friend who has a product to help them along in their journey, they’ll be more inclined to introduce their network to you.

5. When your customers feel like you know them, your perceived value goes through the roof, allowing you to sell your product at a higher price. Customers are willing to pay more for a product from a company that understands them and their needs.

When you have a relationship with your customer, you don’t have to lower your prices to give them the incentive they need to buy. You’ve been providing content of value to them already without asking for any compensation. When they feel as though they’ve received more than they’ve given, price isn’t such a barrier anymore.

For our money, relational marketing is the way to go.

Getting to know your customer isn’t just an exercise in goodwill. It fits perfectly within a solid business plan. Take the time to get to know your customers, and they’ll reward you with their loyalty.