8 Reasons Why Relationship Marketing Beats Transactional Marketing

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We don’t even need to have 8 reasons why relationship marketing is better than transactional marketing. Rand Fishkin said it in just a few words: “The best way to suck at marketing is viewing everything you do as a transaction”. Let it sink in for a second.

A few years back, Rand Fishkin explained in one of his Whiteboard Fridays at Moz, why he is not the biggest fan of transactional marketing. His words hold true, today more than ever. Transactional marketing purely aims at maximizing the volume of sales rather than developing a relationship with your customer. Sure this will make you a few bucks down the road but in the long-run, you’re missing out – BIG TIME as this research by Forrester showed! And after all, we’re in it for the long game, right?

Whether you are selling a product or a service, you need to understand that it’s not enough anymore to focus on features or price. If you want to win, you need to create an awesome overall customer experience. This starts for instance with your website, involves personal sales calls, personalized email messages along the way and proper after sales service. Relationship marketing plays an overarching role in creating this one of a kind customer experience.

Relationships are nice but what about ROI, etc.? Ever heard about the saying how retention is X times cheaper than acquisition (depending on the industry anywhere from five to 25 times). Relationship marketing is all about focusing on building that trust and loyalty with your customers that retains a solid base. As a result you’ll be able to sell over and over again to a bunch of happy people.

If you’re not convinced yet, keep reading to find out 8 reasons how relationship marketing beats transactional marketing every time – guaranteed. 

“Transactional marketing only results in one thing: transactional relationships. Every interaction is viewed exclusively as how are YOU going to become money for ME – which is an ugly way to think”

Rand Fishkin

Founder SparkToro & Moz

1. Focus on Your Customers

Relationship marketing emphasizes focusing on your customers. You are embarking on a journey of creating a tribe of loyal followers. This means you will set up different channels to foster and strengthen the relationships to your client.  Social Media, Blogs, EDM are the popular channels online through which you will interact with them. Make use of all of them.

When you release your next product or service, you can directly promote it to your audience via these channels. Since you have established strong bonds within your tribe, your followers will trust you and will show a high readiness to buy. Don’t forget to get their feedback after they purchased your product or service to improve their experience even further.

With transactional marketing, the focus is on getting the sale. It doesn’t matter as much if the person follows you on social media or buys from you again. It also doesn’t matter too much if the person will buy from you again.

While transactional marketing can support some of your business goals (e.g. revenue, profit), relationship marketing ensures you will have a dedicated audience ready to make anything you launch a success (i.e. sustainability).

2. Commit to Your Customers

Ever heard about the “know, like, trust factor”? Successful business owners commit to this simple yet effective process to improve their customer relationships. Through relationship marketing, you want people to feel as if they know you – no one likes to buy from strangers right? A good start could be the About Page of your website (look how Zendesk is doing this)

You also want your audience to like you so you need to show them how funny, creative, professional you are (make sure you resonate with your audience: as a funeral business you don’t want to talk about the foosball table and the bean bags in your common area – (side note to self: find out if funeral businesses have common areas…). The website of Toyfight is a great example of how to create instant likability. Those little naked action figures are too good.

And lastly you want them to trust you as if you‘re their favorite aunty. A great tool here is social proof (customer testimonials). For the rest it’s just simply delivering what you promise. If you can’t deliver on your promises too often, people will lose trust – and you will lose business.

Know, like, and trust are the real things that determine how people perceive you or your company. Use relationship marketing to firmly establish and develop these factors within your company.

For transactional marketing you require less commitment. But instead you may need to fork out additional money to put in paid ads campaigns to reach more new customers. Since they won’t stick for long, you are in a vicious cycle of ad campaign after ad campaign.

3. Provide Value To Your Tribe

As part of your commitment to relationship marketing, you will provide value to your followers and customers- this is where your customer experience will start to really shine! You will most likely use content marketing to write blog posts about your area of expertise or share useful tips and tricks on your social media. People might visit your website just to get some answers to questions they have – and that’s great because this is how you build up trust.

Always make sure to interact with your audience. reply to comments, answer questions, be present!

If all you do is sell or promote products on your website or social media, people will quickly be annoyed and leave your website or unfollow your social media. 

“Word of mouth comes from content, thoughtfulness, solved problems, and ease of use—in short, the whole experience of a product or service.”

Sean Ellis

Co Creator at Go Practice, Inventor of "Growth Hacking"

4. Find Out What People Truly Need

Relationship marketing will create valuable insights about your tribe. Without it you would never get those insights. By getting to know your customers, they will start to share their problems and pain points with you. This is invaluable knowledge which you can use to upgrade your products or services to meet the exact demands and needs of your customers. 

By constantly refining your offerings, your products perfectly solve the pain points of your customers.

In traditional transactional marketing, you don’t have that kind of knowledge and you can only guess what people need. Or, alternatively, you need to invest money in research to find out what problems people are struggling with.

5. Save Money

Well, you saw that one coming right? We love content marketing and we see it as an important element of relationship marketing – think of it that way: all content marketing is relationship marketing and all relationship marketing needs content marketing. The best thing about content marketing is that it’s free (if you do it yourself, that is).

All you need is some time that you invest in copywriting and SEO. You can schedule time each week to write a new blog post on a relevant topic or get someone to help you. Just make sure that you’re consistent! A blog will give people the chance to learn from and about you for free and decide whether you’re trustworthy enough that they want to buy from you.

With transactional marketing, you probably won’t have a comprehensive blog as part of your strategy. Instead you would have a budget for the ad campaigns you need to run to get people on your sales page (btw nothing wrong with paid ads, but we feel it should only be one part of your overall strategy).

6. Set Yourself Up For The Long Game

Another major difference between relationship marketing and transactional marketing is your time horizon. Transactional marketing would usually be focused on a quick sale.

For relationship marketing, it’s true that you will need to wait a little to reap the benefits of your strategy but you can be sure that the result is much more sustainable. Once your customers do know, like, and trust you, selling will become easy. You can sell your new offers to your audience for months or even years to come. After someone trusts you, they will be excited to break out their wallet and buy. After all you’re creating an awesome experience full of value for your customers.

7. Easy To Start!

To implement relationship marketing is much easier than one might think. You don’t even need a website. Just set up an account on LinkedIn Instagram or Facebook and you can start building relationships. Even if you have never designed anything in your life, tools like Canva make it easy for you to come up with your first few posts.

For transactional marketing you will often need at least some basic knowledge about Google Ads or Facebook Ads. Although it’s no rocket science the learning curve can be steep.

Bottom Line: Do Relationship Marketing!

Relationship marketing takes time but once implemented it is one of the best ways to sell your product or service. It’s all about building a tribe that loves what you’re doing. Whenever you launch a new product or service, you know you have a loyal group of people that is just waiting for you to realease that next big thing. And if they’re not, they will tell you why and you’ll do better next time!

What are you waiting for? Start building your tribe! 

on January 13, 2021


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