Transactional marketing or relationship marketing - what works better?

Commplace PR agency

Transactional marketing, like all marketing activities, is focused on generating sales and acquiring customers. However, transactional and relationship marketing take a different approach to it. The first is to provide a one-off sale to a large number of customers. The purpose of relationship marketing, on the other hand, is to encourage repeat purchases of not one, but a larger group of customers. The choice between these two strategies depends on answering a few questions.

Before you decide which type of marketing - transactional or relational - it will work better for you, verify the following:

What do you sell?

- who you see as the perfect client?

- what kind of relationship do you want to establish with him after sale?

With this knowledge, you can verify which strategy will help you with achieving the company's goals. Check what exactly is transactional and relationship marketing (also known as affiliate marketing) so that you can be sure that you are on the right path.

What is transactional marketing?

When you think of the word transaction, you probably automatically think of selling. Correct, because that's what transactional marketing is. This is where it matters the number of sales transactions recorded, the profit on sales, and the cost of each purchase. Transactional marketing aims to maximize the number of sales through continuous attracting new customersrather than encouraging repeat purchases, as is the case with relationship marketing.

An excellent example of this type of strategy is the sales presentation on Mango 24. Probably everyone, if they have not watched it at least once, has certainly heard about this television band specializing in teleshopping. After turning on this type of channel, you can buy many different products without leaving your home - from jewelry to household appliances. The purpose of the broadcast content is selling as many items as possible at a certain time. The companies behind the products on offer don't spend time engaging with their audience and building relationships. Instead, we have a simple, one-sided message where presenters use discounts, incentives, and slogans in style Call To Action (eg "the clock is ticking" or "you only have two more days") to generate as much sales as possible. Other examples transaction marketing are e.g. sale of cinema tickets, train tickets, sale in shopping centers etc.

Transactional marketing and relationship marketing

Relationship marketing - definition is not difficult to interpret on your own. Unlike transactional marketing, relational marketing it focuses on what its name suggests - on the relationship with the client. The purpose of relationship marketing is to create a bond that ensures customer retention and re-purchases. As with any relationship building, this strategy takes longer to achieve its goals. What exactly is it about? On focusing activities companies on the customer and making marketing efforts that are investments in the promise of long-term sales. When implementing this strategy, you have to ask yourself questions about it what the client is looking for and whether he finds it valuable what you offer him.

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One example of this tactic is a polite telephone conversation with the customer who made the purchase. A simple mood check, i.e. contact to probe or measure the level of customer satisfaction, builds relationships with them and provides insights and data that will be used wisely to serve them even better in the future. This is a really great way to do it increasing the level and quality of contact between customers and the company and to better understand the needs and preferences of individual customers.

Table 1. Characteristics of transactional marketing and relationship marketing

The Benefits and Pitfalls of Transactional Marketing and Affiliate Marketing

As with any marketing strategy, it has both advantages and pitfalls. This is the nature of business. Transactional marketing means little emotional attachment to consumers. The truth is, most transactional customers are looking for low priced products because price is their main concern. This means they likely won't be long-term customers. Unless you stick to a pricing strategy or nurture a relationship, they will look for alternative options. Focusing only on price eliminates the focus on product value or service performance, and can lead to price wars. If a competitor in the same industry cuts the price of their products, customers will go over there willingly, ignoring yours. Whereas on the benefit of transactional marketing is inventory rotation. Admittedly, inventory storage and management are high costs, and transactional marketing tries to reduce them quickly. Works well at removing seasonal merchandise or items that don't sell out immediately. By getting rid of discounted items, you can make room for more of the items you are looking for, generating higher income.

While transactional marketing it is telling the client "We have something you want", in case of relationship marketing message appears "We are here for you". People have got used to trying to sell them something at every turn. Therefore they became resistant and resistant on traditional advertising. Taking a more emotional and personal approach may turn out to be an excellent alternative to the previously used concepts of marketing management, which turn out to be insufficient and ineffective.

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