October 9, 2018 (Updated: May 4, 2023)
The world of online content marketing has grown more fluid, and businesses have to occasionally re-educate themselves with new terms and concepts. For example, you may have heard about the difference between relationship marketing vs. transactional marketing but wonder what these terms mean and how they are different. If that’s the case, look no farther than this guide on the two key divisions in online marketing. You’ll understand not only their basic points of diversion but also how those differences matter when creating and promoting content.
Image via Flickr by Christoph Scholz
A business with any degree of success should have some experience with transactional marketing. This term simply means marketing with the objective of achieving a transaction or sale. Chiefly, transactional marketing is set around maximizing the volume of sales and efficiency of conversions. It contrasts against a more elongated and casual approach that aims to build a relationship with the potential customer first.
Transactional marketing is usually broken down into a structure called the four P’s: product, pricing, placement, and promotion. Naturally, a product is self-explanatory. Pricing means reaching an asking price that fits the ideal medium between attractive to customers and profitable to the business. Placement means establishing the right distribution for the product, and promotion means creating enough visibility for the placement to earn sales.
The chief end point of transactional marketing is the sale. Once the sale has been made, no more needs to be done for the buying customer, apart from any obligatory customer service issues that may occur. Transactional marketing is pure, blunt selling, and no business could succeed without it. However, the limitations of this style can mean that even if you achieve a substantial number of customers, only a small fraction of them may become repeat buyers. You may experience high customer turnover, never gathering a particularly large audience of loyal customers.
In contrast with transactional, relationship marketing puts off immediate sales and instead seeks to build natural connections with customers. It can take many forms but is fairly easy to see online. One example would be a business sharing helpful content for free and then communicating with the people who find it relevant, having honest discussions that rarely lead toward an actual sales pitch.
Whereas transactional marketing projects the message “we have something you want,” relationship marketing projects the message “we are here for you.” People are too used to selling and are resistant to traditional advertising, but taking a more emotional and personal approach first can melt through those barriers. Relationship marketing cannot be automated, however, and someone will have to operate your social media or email accounts to maintain positive connections between every willing person, customer or not.
The reason this approach works is that it builds a powerful base of word-of-mouth supporters and repeat customers who assist in your more straightforward transactional marketing efforts. This effect is sometimes called a street team, and you can message these people to post about special offers, new products, and anything else you want to secure attention.
Relationship marketing is not superior to transactional and it does have disadvantages. Particularly, relationship marketing is not as time and cost efficient. Consider relationship marketing as the long-term portion of your online strategy, nurturing connections that will snowball with time into a league of passionate repeat buyers and supporters. You will need transactions to survive, of course, but you will need relationships to grow ahead of your competition.
You may look at these two categories and think that relationship marketing is something you’re already doing because you don’t ask for a sale immediately. However, this thinking is not entirely accurate. Any type of content made with the intent of ultimately getting a sale, even if it’s not planned directly or pushed in the audience’s face, is still transactional marketing.
Let’s use an example: A business hears about relationship marketing and creates blog posts made to solve a common problem among its audience. The business promotes these pieces on social media, and people like them, post comments, and subscribe to the blog for email updates. At this point, the business thinks it has succeeded and can now start making sales. However, the next time the business promotes one of its offers or products to its freshly built email list, hardly anyone buys.
This example represents mistaking longer-term transactional marketing for relationship marketing. The business should have taken some action such as releasing friendly emails with more valuable content and encouraging people to reply back. Among those who do, a rapport could be built over several weeks, with back-and-forth support toward one another by email and on social media sites. When it comes time to release something transactional, these people will know the business and brand well and consider it a friend worth their support.
Now that these two types of marketing have been explained, below are some tips on how to create and promote content for each one.
It’s wise to start early and develop a balanced content marketing strategy designed to both encourage early transactions and to build relationships for greater future returns on investment. Such a plan will build your visibility without having you completely starved of revenue. Of course, not all businesses are equipped to handle both efficiently from the beginning. Consider using experts outside of your own team to fill in for your current shortcomings or knowledge gaps. Whatever you decide, keep at it, always improve, and never give up.
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