Transactional or Relational Marketing, Which One Should You Go For?

October 16, 2015 / Reading: 4 minutes




The success of any marketing campaign depends on how you decide to promote your business or product. And while all marketing strategies focus on increasing revenue and profits by gaining new clients, the differences between transactional and relationship marketing are profound.

As more and more customers have come to expect a personalized experience, a growing number of businesses have had to shift their focus from transactional marketing to relationship marketing. The reason for that is because they found that building a relationship with customers usually results in increasing retention, average order size, sales and ultimately, profits.

Transactional vs. Relationship Marketing

Whereas transactional marketing focuses on short term benefits by centering strongly on price and maximizing profits for each transaction; relationship marketing’s key focus is brand loyalty and aims to develop deep, enduring relationships with all people or organizations that have a direct or indirect impact on the success of a business’ marketing activities. Below are the main differences between these 2 marketing approaches:



Relationship MarketingTransactional Marketing
FOCUSCustomer RetentionSingle Sale
ORIENTATIONProduct BenefitsProduct Features
TIME HORIZONLong TermShort Term
CUSTOMER FOCUSHighLow
CONTACT WITH CLIENTSHighLow

As you can see above, relationship and transactional marketing take different views of the role of the client. So while a purely transactional strategy is more short-term driven and is best suited for one-time purchases with no expectation that the customer would return for repeat business; the relational approach aims to encourage customer loyalty and return for future purchases by creating a long-term relationship between the customer and the business.

Focus on relationship marketing

As more and more customers expect a personalized experience, a growing number of businesses have had to shift their focus from transactional marketing to relationship marketing.

Read more: How To Conquer Your Clients And Make Them Loyal

Whereas transactional marketing focuses on short term benefits by centering strongly on price and maximizing profits for each transaction; relationship marketing’s key focus is brand loyalty and aims to develop deep, enduring relationships with all people or organizations that have a direct or indirect impact on the success of a business’ marketing activities.

There are many benefits to relationship marketing: Not only does it increase the likelihood of referrals, but a solid relationship marketing strategy can help make rolling out a price increase easier. It also creates an opportunity for genuine feedback that will most certainly help you improve your product offering and make your small business more adaptable to change.

Make sure you cultivate your customer relationships

Before implementing any sort of retention strategy, you should first have a solid customer relationship management process in place. A customer who feels they are not properly taken care of will most likely not respond well to your loyalty proposition.

This is becoming increasingly true, support, availability, and expert advice are now the hallmarks of a successful business relationship. In addition, keep in mind that customer loyalty is achieved not just when you have met an immediate need, but once you’ve managed to create a relationship based on trust. Schedule regular visits or follow-up calls to your clients as it adds a human touch to the business relationship. If you manage to create a strong relationship with your customers, they will become your best ambassadors.

You need to enhance your customer experience

Providing a superior customer experience is key to making your customers loyal to your business and is increasignly becoming the critical differentiator between market leaders and followers. You can achieve that by having a more compelling product or service offerings, or If for example you operate in the retail business, by revamping you entire ordering process:

  • Have an efficient inventory management system in place
  • Offer different delivery methods to the customer
  • Ensure the reliability of your delivery system (package quality, punctuality, etc.)
  • variety of payment methods, etc.

In short: make the whole customer experience as quick and hassle-free as possible.