Transactional vs relationship marketing (and what to choose)

Your marketing approach decides how your campaigns perform.

And there are two main approaches that we see all around us: a transactional marketing approach Vs a relational marketing approach.

As a business owner or marketer, you can leverage either of these approaches to get the same outcomes. Almost. You will get more sales and drive up revenue but the timeframe this takes place over will vary. So will other factors.

Let's dive deeper and look at these two marketing approaches. You should see your own marketing with fresher eyes and make better business decisions to help you achieve your goals.

About transactional marketing

Transactional marketing is a business strategy that focuses on driving one-time sales from individual customers. It focuses on point of sale transactions. The emphasis is on increasing the volume of individual sales and being more efficient at it rather than developing a relationship with the buyer

As a result, marketers create content and build campaigns that focus on immediate sales.

The ads you see, the use of FOMO, discounts, and other tactics are examples of transactional marketing.

About relationship marketing

Relationship Marketing is when you build a relationship with a customer to make them more likely to buy from you in the future. You also leverage your marketing to turn customers into advocates and ambassadors.

In relationship marketing, you develop a relationship with your customer. To do this, you have to understand what they really want and provide them with exactly that. Often going beyond their immediate needs.

And you know your customers' needs and wants because you are constantly in contact with them.

A relationship marketing approach places the attention on repeat sales to existing consumers. Over the long run, focusing on relationship marketing reduces costs. However, it takes time to see results and you need to invest time and effort from the start to create great outcomes in the future.

How to transform your transactional marketing into relationship marketing

It's smart to add elements of relationship marketing to your overall strategy. If you're currently focused on driving immediate sales, you can create small shifts in the following way:

Get to know your customers: You can't provide what they want if you don't know what that is. Talk to them, find out their needs and wants, and keep track of it all in a database or CRM.
Send them personalized communications: Use their name, send them relevant offers, and make sure the content is interesting to them.
Stay in touch: Keep in contact with them through various channels, like email, phone, social media, and even in person.
Show you care: Go the extra mile for your customers by providing excellent customer service.
Reward them: Reward your loyal customers with e-commerce loyalty programs, offers, and other promotions. This will make them feel special, and more likely to buy from you again in the future.
Create informative content: focus on blog posts and answer questions. As well as videos.

As you can see, relationship marketing is all about taking extra steps and driving positive customer experiences. And you won't see any results right away. Rather, you'll build a reputation for running a great service and will see the benefits down the line.

Advantages of using a relationship marketing approach

From the sound of it, relationship marketing seems like a better option for entrepreneurs and marketers. And there are many advantages to using this long-term approach that keeps results coming long after your initial work.

Here are some advantages that relationship marketing has over transactional marketing:

It builds trust: When you provide excellent customer service and send personalized communications, customers will start to trust you. This trust will make them more likely to buy from you in the future.
It creates loyalty: Loyal customers are more likely to buy from you again and recommend your products and services to their friends and family.
It reduces long-term costs: Relationship marketing is more efficient than transactional marketing because you're not wasting time and money trying to attract new customers. You're already attracting them through your existing relationships.
It's more effective in the long run: Relationship marketing is more effective than transactional marketing because it focuses on building trust and loyalty with existing customers.

Advantages of transactional marketing relationship marketing

If you're thinking that relationship marketing is the 'right' approach to your marketing efforts, then you want to keep an open mind.

Here are some powerful advantages of going with a transactional approach for your business.

It's easier to track: Transactional marketing is more measurable than relationship marketing because you can track individual sales instead of total satisfied customers.
It's more efficient in the short run: Transactional marketing is more efficient because you only have to focus on one-time sales from individual customers. You don't have to manage relationships or create loyal customers that might buy from you again in the future.
It's cheaper in the short term: Transactional marketing is cheaper because it doesn't require any extra time or effort to keep customers in the loop.
You can automate some tasks more easily: Transactional marketing is more easily automated because you can create an email sequence and schedule posts on social media channels in bulk. This will save you a lot of time when compared with spending that same amount of time on each individual customer.

Transactional Marketing Vs Relationship Marketing: Which Is Better?

The answer is neither. They're just two different marketing strategies that you can use to your advantage, depending on your needs and goals as a business owner.

If you have a new cash-strapped business, then a transactional approach can help you build your funds. You'll have tools and strategies that drive sales in the short run for your business - enough to create a pool of resources that you can later leverage to create longer-term strategies.

If you've already experienced business growth and want to create compounding outcomes and long-term results, then you could focus on relationship marketing.

Spending resources on both transactional and relationship marketing will make your efforts more effective. When you use both strategies together, you'll attract more customers, build stronger relationships with them, and get better results.

Tools for relationship Vs transactional marketing

You can use the same tools for both marketing approaches. What will change is the content you create and how you leverage them.

Let's look at a few examples:

Email marketing: When you're focused on a transactional approach, you'll send emails driving immediate sales regardless of how long a customer has engaged with you.

For relationship marketing, you'd hold off on sales-driven content. Instead, you might send informational blog content, ask questions, or just engage readers in other ways.

Social media content: Use social media ads featuring flash sales and other marketing tactics to create immediate sales.

For a relationship marketing approach, share behind-the-scenes content, create polls, or just entertaining content that builds a strong connection with your audience.

Blog posts: Your blog content should reflect different stages of your customer's journey. Towards the end of the customer journey, where they're contemplating taking action, create content that compares products. Also, add calls to action encouraging people to buy now.

For a relationship-based approach, you want to create posts for users at the top end of the customer journey. Create informational posts that answer questions or guide people through a complex subject.

Conclusion

There are many approaches to creating content and marketing your business. But most of them can fall under two main categories of transactional Vs relationship marketing.

I've shared some key differences between them, how to apply them, and when you should. Keep these frameworks in mind when you plan your next campaign, and you'll be more likely to get the results you want - whether it's to create more revenue now or have your customers love you so much that they talk about you on social media all the time.