S
Suzanne Scacca
Guest
Modern marketing emphasizes long-lasting customer relationships rather than one-time transactions by prioritizing customer experience.
Are you looking to modernize and improve your company’s marketing strategy?
If so, then the first thing you should do is find out if you’re currently using a transactional or relationship marketing strategy. While there’s a time and place to use both, relationship marketing is becoming the preferred strategy of consumers and the most profitable one for businesses.
In this post, we’ll compare and contrast transactional marketing with relationship marketing. Then we’ll discuss five tips to help you optimize your strategy with value-based, relationship-building marketing techniques.
Even if you’re not familiar with the terms “transactional” or “relationship” marketing, you’ve likely encountered both and have felt the differences between the two.
In transactional marketing, the goal is to get a fast or immediate result. Transactional marketing can be used for getting consumers to notice your brand, leads to sign up or customers to buy something.
Typically, these marketing tactics rely on urgent and generalized messaging and the results only last for a short while.
The main question transactional marketers ask is:
X could be a specific number of impressions, leads, sales or another quantifiable metric calculated over a short period of time.
The target user could be a one-time buyer, repeat buyer or loyal buyer. Frequency of engagement or purchase does not matter. The priority in transactional marketing is to get as many customers to act at that very moment or to that specific campaign the way you want them to.
In relationship marketing, the goal is to build trust with leads and customers and to develop long-term relationships with them. Not only do marketers see results from these kinds of tactics for longer, they tend to multiply as loyal customers spread the word.
Typically, these marketing tactics start with deep dives into who the target customer is in order to understand what they want and need. Then, marketers make that a priority when developing messages and offers.
The main question that relationship marketers ask is:
In other words, the target user is more than just a number or sale. The company’s priority is to offer a positive and memorable customer experience (CX). It does this through genuine engagement, added value, personalized experiences and more.
Relationship marketers don’t measure their success in terms of one-time sales or interactions. Instead, they look at how their efforts affect customer retention rates, overall customer satisfaction and customer lifetime value.
Here are some examples of how these two marketing techniques differ:
Here are some tips to help your business shift away from focusing on one-time sales and engagements and toward a more customer-centric marketing strategy:
It’s not like consumers don’t care about the integrity of the businesses they buy from when making one-time transactions.
Even if they discover a cool new product or hot deal on Instagram, they’d likely check out the comments first to see what other customers have to say. Or maybe even Google the company to make sure it’s legit and that they’ll get what they ordered from them.
However, there’s a difference between someone checking to make sure they won’t get scammed by a one-off purchase and someone looking into what a brand’s all about before committing to them.
It’s the latter you’ll see more of when your marketing strategy prioritizes building relationships. Customers will actually want to know what your brand stands for. For instance, they might ask:
Consumers know they have an endless supply of options these days. It’s all too easy to switch from one brand to another if they’re dissatisfied in any way. At the same time, they value convenience. So if they can find a brand they trust, they’re going to stick with them.
That’s why so many people do their research on brands. They also watch closely to make sure they do what they say they’ll do. Consumers want to know that a brand makes a good product, offers great customer service and that their values match up with their own. They also want them to be reliable, transparent and have integrity when doing business.
In transactional marketing, customer retention doesn’t even factor into the equation. Instead, it’s about how many customers they can get to do a certain thing in a short amount of time.
In relationship marketing, it’s not as though we stop caring about how many customers we get or how much money we make. We need that in order to succeed. However, we understand that a retained customer is much more valuable to our business than a one-time customer.
So, our strategy needs to be about creating the best experience we can to improve overall customer satisfaction.
To do this, we need to first get acquainted with our target users. Who they are, what they do, what they need and want from us, what their likes and dislikes are, etc.
Then, we need to visualize what their relationship will look like with our brand. For example:
The point in all this is to figure out what needs to be done to nurture a relationship with your customers over time. Relationship marketing requires a long-term investment from you in fostering trust in your customers. If you can anticipate their next move and you understand their motivations, it’ll be much easier to devise your marketing strategy around this.
On a related note, your team should spend time getting to know your users—and not just on a hypothetical or generalized level.
You don’t need a multimillion dollar business to have the means to connect with target users. There are so many intuitive and economical tools that make it easy to perform user research and testing.
By doing user research and testing, you’ll have many different ways to solicit information about and from your users. To make it work to your advantage, though, you really need to listen to what they say and then implement it.
For instance, the data you gather will allow you to give your target users a say about various things, like:
Even if you believe that the “customer is always right,” it doesn’t mean you should betray your business’s objectives or profits to do everything your customers suggest (or that your data suggests).
Staying true to what you set out to do is important. However, relationship marketing asks you to take a more open and collaborative approach to business and marketing. Take your customer data and first-hand insights and use them to make what you do better. It’s when customers feel like a brand has heard them and understands their needs that a genuine relationship with them can begin.
Your products (or services) may be what initially attracts customers. In transactional marketing, the touting of your products, their features and their benefits would likely be enough to close the sale. In relationship marketing, though, you need to go beyond what you sell and use your marketing to give customers even more value.
Here’s a simple example that demonstrates this difference well:
Your business sells hair coloring products to stylists. With a transactional approach to social media marketing, your Instagram feed would be filled with self-promotional content like:
With a relationship-building, value-based approach to social media marketing, your Instagram feed would still have promotional content. After all, you’re running a business. However, it would also be filled with content like:
Not only do relationship marketers throw valuable informational posts into the mix, that content would make up the vast majority of what’s shared. Typically, the split is 80% helpful to 20% promotional.
Promotional content is great for time-sensitive offers and for bringing in new business. But if you have nothing more to offer your customers, it’s going to be very difficult to keep them engaged over the long run. Value-based marketing gives them a reason to keep patronizing your business.
Marketing content isn’t the only way to go above and beyond in relationship building either. Other effective tactics that build value include rewards programs, exclusive content, community access and white-glove customer service.
Personalization is one of the best ways to let your customers know you’ve really heard them.
By personalizing their interactions with your brand, each customer will feel like an actual person that means something to you, not just another sale. And that goes a very long way with consumers today.
As the number of channels through which we reach users expands, we have so many ways to personalize their experience at different touchpoints. For example:
We’re able to automate these personalized interactions, too. We can set them up based on information we have about the user. We can also set up triggers based on certain actions they take whenever they engage with us through our website or app.
Just be mindful of how far you go with personalization. While consumers expect brands to offer customized experiences, offers and recommendations, there is such a thing as going overboard.
This is why it’s crucial that you have a way to check in with your users. Information-gathering is certainly useful in the beginning as it allows you to learn about who your business serves. However, it should never stop. You need ongoing customer feedback to confirm that you’re on the right track when it comes to marketing and personalization.
Like I said, there’s a time and place for transactional marketing. For instance, it comes in handy when you have something timely to promote, like getting people to your store opening or moving a bunch of inventory at the end of a season. You can use time-sensitive offers, outrageous discounts and other eye-catching messages to drive these kinds of transactional marketing efforts.
Now, if your goal is to create a company with real staying power, then your marketing efforts need to speak to the modern consumer. Yes, there will always be people attracted to messages of urgency. But it’s incredibly expensive to design your marketing campaigns solely around those kinds of customers.
To get the greatest ROI from your marketing, you need to invest more heavily in relationship marketing. These types of marketing tactics will help you attract and retain customers who care about the brands they do business with and want something more from them than annual sales.
If you do this right, your business will see more recurring revenue, greater customer satisfaction and stronger customer loyalty. This translates to much higher profits than you’d see with a strictly transactional marketing strategy and profits you’ll sustain long term, too.
Read next: The Link Between Personalization and Customer Retention
Continue reading...
Are you looking to modernize and improve your company’s marketing strategy?
If so, then the first thing you should do is find out if you’re currently using a transactional or relationship marketing strategy. While there’s a time and place to use both, relationship marketing is becoming the preferred strategy of consumers and the most profitable one for businesses.
In this post, we’ll compare and contrast transactional marketing with relationship marketing. Then we’ll discuss five tips to help you optimize your strategy with value-based, relationship-building marketing techniques.
Transactional Marketing vs. Relationship Marketing: What’s the Difference?
Even if you’re not familiar with the terms “transactional” or “relationship” marketing, you’ve likely encountered both and have felt the differences between the two.
Transactional Marketing
In transactional marketing, the goal is to get a fast or immediate result. Transactional marketing can be used for getting consumers to notice your brand, leads to sign up or customers to buy something.
Typically, these marketing tactics rely on urgent and generalized messaging and the results only last for a short while.
The main question transactional marketers ask is:
X could be a specific number of impressions, leads, sales or another quantifiable metric calculated over a short period of time.
The target user could be a one-time buyer, repeat buyer or loyal buyer. Frequency of engagement or purchase does not matter. The priority in transactional marketing is to get as many customers to act at that very moment or to that specific campaign the way you want them to.
Relationship Marketing
In relationship marketing, the goal is to build trust with leads and customers and to develop long-term relationships with them. Not only do marketers see results from these kinds of tactics for longer, they tend to multiply as loyal customers spread the word.
Typically, these marketing tactics start with deep dives into who the target customer is in order to understand what they want and need. Then, marketers make that a priority when developing messages and offers.
The main question that relationship marketers ask is:
In other words, the target user is more than just a number or sale. The company’s priority is to offer a positive and memorable customer experience (CX). It does this through genuine engagement, added value, personalized experiences and more.
Relationship marketers don’t measure their success in terms of one-time sales or interactions. Instead, they look at how their efforts affect customer retention rates, overall customer satisfaction and customer lifetime value.
Spot the Difference Between the Two
Here are some examples of how these two marketing techniques differ:
| Transactional Marketing | Relationship Marketing | |
|---|---|---|
| Flyer in the mail | Mass mailing offers a free cleaning to anyone who wants to take advantage of the deal at the new car wash | Targeted mailer invites repeat car wash customers to sign up for the monthly membership and receive an exclusive discount |
| Discount code for 20% gets sent to shoppers who abandoned their cart | Customers who recently purchased a pearl powder supplement receive an informational email explaining the hidden benefits of pearl powder with 10 tips on how to get more from it | |
| Video ad | Car dealership announces massive President’s Day deals, slashing prices up to 75% | The owner of a long-time car dealership introduces herself and then segues into customers speaking about how happy they are with the service and their purchases |
| About page on website | The “About” page on a design agency’s website touts their low-cost fees and quick turnaround | The “About” page on a design agency’s website discusses the company’s history, mission, and values, which include transparency, craftsmanship, customer service and innovation |
| Social media | A beauty influencer creates a 15-second reel for TikTok in which she seductively poses for the viewers and invites them to subscribe to her page | A beauty influencer creates a 3-minute reel for TikTok in which she starts with a bare face and shows her morning skin care routine and the actual cleanser and face cream products she uses |
How to Transform CX with Relationship Marketing
Here are some tips to help your business shift away from focusing on one-time sales and engagements and toward a more customer-centric marketing strategy:
Tip 1: Create a Brand of Integrity
It’s not like consumers don’t care about the integrity of the businesses they buy from when making one-time transactions.
Even if they discover a cool new product or hot deal on Instagram, they’d likely check out the comments first to see what other customers have to say. Or maybe even Google the company to make sure it’s legit and that they’ll get what they ordered from them.
However, there’s a difference between someone checking to make sure they won’t get scammed by a one-off purchase and someone looking into what a brand’s all about before committing to them.
It’s the latter you’ll see more of when your marketing strategy prioritizes building relationships. Customers will actually want to know what your brand stands for. For instance, they might ask:
- Do your business’s values align with theirs?
- Do you use sustainable products?
- Are you a woman-owned business?
Consumers know they have an endless supply of options these days. It’s all too easy to switch from one brand to another if they’re dissatisfied in any way. At the same time, they value convenience. So if they can find a brand they trust, they’re going to stick with them.
That’s why so many people do their research on brands. They also watch closely to make sure they do what they say they’ll do. Consumers want to know that a brand makes a good product, offers great customer service and that their values match up with their own. They also want them to be reliable, transparent and have integrity when doing business.
Tip 2: Invest Heavily in a Customer Retention Strategy
In transactional marketing, customer retention doesn’t even factor into the equation. Instead, it’s about how many customers they can get to do a certain thing in a short amount of time.
In relationship marketing, it’s not as though we stop caring about how many customers we get or how much money we make. We need that in order to succeed. However, we understand that a retained customer is much more valuable to our business than a one-time customer.
So, our strategy needs to be about creating the best experience we can to improve overall customer satisfaction.
To do this, we need to first get acquainted with our target users. Who they are, what they do, what they need and want from us, what their likes and dislikes are, etc.
Then, we need to visualize what their relationship will look like with our brand. For example:
- Where are they most likely to engage with us online?
- What is going to make them seek us out?
- How long will it take before they make their first purchase?
- What will motivate them to make a second and third purchase?
- What kinds of incentives or rewards will they need to keep buying from us?
- How can we make their experience with us better than they’ve had with other brands?
The point in all this is to figure out what needs to be done to nurture a relationship with your customers over time. Relationship marketing requires a long-term investment from you in fostering trust in your customers. If you can anticipate their next move and you understand their motivations, it’ll be much easier to devise your marketing strategy around this.
Tip 3: Really Get to Know Your Users
On a related note, your team should spend time getting to know your users—and not just on a hypothetical or generalized level.
You don’t need a multimillion dollar business to have the means to connect with target users. There are so many intuitive and economical tools that make it easy to perform user research and testing.
By doing user research and testing, you’ll have many different ways to solicit information about and from your users. To make it work to your advantage, though, you really need to listen to what they say and then implement it.
For instance, the data you gather will allow you to give your target users a say about various things, like:
- What the experience of using your website or app is like
- How your brand speaks to them online
- Which platforms your brand should connect with them on
- The kinds of products and services you sell
- What types of customer support you offer
- How to recover their business after a bad experience
- What types of rewards to offer
- Ways to keep their business year after year
Even if you believe that the “customer is always right,” it doesn’t mean you should betray your business’s objectives or profits to do everything your customers suggest (or that your data suggests).
Staying true to what you set out to do is important. However, relationship marketing asks you to take a more open and collaborative approach to business and marketing. Take your customer data and first-hand insights and use them to make what you do better. It’s when customers feel like a brand has heard them and understands their needs that a genuine relationship with them can begin.
Tip 4: Create More Than Just a Product
Your products (or services) may be what initially attracts customers. In transactional marketing, the touting of your products, their features and their benefits would likely be enough to close the sale. In relationship marketing, though, you need to go beyond what you sell and use your marketing to give customers even more value.
Here’s a simple example that demonstrates this difference well:
Your business sells hair coloring products to stylists. With a transactional approach to social media marketing, your Instagram feed would be filled with self-promotional content like:
- “Buy 2 mixing bowls, get the 3rd free!”
- “End of year blowout sale! All our products are 90% off”
- “Tired of knotty hair? The new Rapunzel detangling brush works for every hair type”
With a relationship-building, value-based approach to social media marketing, your Instagram feed would still have promotional content. After all, you’re running a business. However, it would also be filled with content like:
- Step-by-step demonstration of how to color your hair at home for the first time
- A video review of the three most popular coloring gloves for stylists
- Content shared from other brands that give followers additional advice and tips
Not only do relationship marketers throw valuable informational posts into the mix, that content would make up the vast majority of what’s shared. Typically, the split is 80% helpful to 20% promotional.
Promotional content is great for time-sensitive offers and for bringing in new business. But if you have nothing more to offer your customers, it’s going to be very difficult to keep them engaged over the long run. Value-based marketing gives them a reason to keep patronizing your business.
Marketing content isn’t the only way to go above and beyond in relationship building either. Other effective tactics that build value include rewards programs, exclusive content, community access and white-glove customer service.
Tip 5: Personalize Your Content and the Experience
Personalization is one of the best ways to let your customers know you’ve really heard them.
By personalizing their interactions with your brand, each customer will feel like an actual person that means something to you, not just another sale. And that goes a very long way with consumers today.
As the number of channels through which we reach users expands, we have so many ways to personalize their experience at different touchpoints. For example:
- In email marketing, we can address them by name and add details specific to their account or purchase history in the body of the message.
- In ecommerce, we can alter the layout of the navigation and what content is shown on the homepage based on the visitor’s shopping history.
- On social media, we can display ads based on target user demographics and in-app behaviors.
- In blogging, we can write posts for different user segments. We can also display in-line banner ads based on their preferences.
- Within rewards programs, we’re able to celebrate special days like birthdays and anniversaries and provide tailor-made product recommendations.
We’re able to automate these personalized interactions, too. We can set them up based on information we have about the user. We can also set up triggers based on certain actions they take whenever they engage with us through our website or app.
Just be mindful of how far you go with personalization. While consumers expect brands to offer customized experiences, offers and recommendations, there is such a thing as going overboard.
This is why it’s crucial that you have a way to check in with your users. Information-gathering is certainly useful in the beginning as it allows you to learn about who your business serves. However, it should never stop. You need ongoing customer feedback to confirm that you’re on the right track when it comes to marketing and personalization.
Wrapping Up
Like I said, there’s a time and place for transactional marketing. For instance, it comes in handy when you have something timely to promote, like getting people to your store opening or moving a bunch of inventory at the end of a season. You can use time-sensitive offers, outrageous discounts and other eye-catching messages to drive these kinds of transactional marketing efforts.
Now, if your goal is to create a company with real staying power, then your marketing efforts need to speak to the modern consumer. Yes, there will always be people attracted to messages of urgency. But it’s incredibly expensive to design your marketing campaigns solely around those kinds of customers.
To get the greatest ROI from your marketing, you need to invest more heavily in relationship marketing. These types of marketing tactics will help you attract and retain customers who care about the brands they do business with and want something more from them than annual sales.
If you do this right, your business will see more recurring revenue, greater customer satisfaction and stronger customer loyalty. This translates to much higher profits than you’d see with a strictly transactional marketing strategy and profits you’ll sustain long term, too.
Read next: The Link Between Personalization and Customer Retention
Continue reading...