The key difference between transactional marketing and relationship marketing is that transactional marketing refers to short term sales boost, whereas relationship marketing refers to long term customer connection with the business.
Transactional and relationship marketing are two popular strategies of marketing in the contemporary business world. Although strategies aligned for both these marketing forms are different, their ultimate objective is to enhance business performance.
CONTENTS
1. Overview and Key Difference
2. What is Transactional Marketing
3. What is Relationship Marketing
4. Similarities Between Transactional Marketing and Relationship Marketing
5. Side by Side Comparison – Transactional Marketing vs Relationship Marketing in Tabular Form
6. Summary
What is Transactional Marketing?
Transactional marketing refers to a business strategy that focuses on the point of sale (POS) transactions. Since this strategy targets quick sales, its main purpose is to maximize sales efficiency by increasing the volume of individual sales. However, this business strategy does not have an interest in developing an ongoing relationship with the buyer.
Transactional marketing is based on four traditional elements of marketing, known as 4Ps.
4Ps of Marketing
Product
The first P is Product, which involves creating a product to satisfy customer needs and expectations. For instance, selling a washing powder which is more effective than the existing washing powders in the marketing.
Price
Price is all about assigning an attractive and reasonable price to lure customer. For example, reasonable prices than other competitive products in the market or giving an incentive for the product to boost sales.
Place
This is all about placing the product where buyers can find the product easily, not letting customers search for the product. For instance, selling washing powder in groceries, supermarkets and even village boutiques.
Promotion
Promotion mainly includes urging customers to buy the product immediately. For example, store promotions and online coupons to attract buyers to purchase the product as quickly as possible.
What is Relationship Marketing?
Relationship marketing is an aspect of customer relationship management which focuses on customer loyalty and long term customer engagement. The prime objective of relationship marketing is to create a strong connection between the customer and brand or product, which may lead to the success of the ongoing business. Most importantly, relationship marketing does not have an interest in short term sales boost.
At present, businesses have realized that acquiring new customers is always costly and challenging. Therefore, relationship marketing help to retain customers over the long term. As a result, customers build trust and loyalty with the brand. Moreover, relationship marketing uses strategies to foster better customer loyalty. Two-way communication between the buyer and the business is very important to create a good relationship. Internet, social media, as well as word of mouth and testimony from existing customers, can help to promote the business and build strong relationships.
What are the Similarities Between Transactional Marketing and Relationship Marketing?
- Transactional and relationship marketing are just two ways of marketing.
- Although strategies aligned for both terminologies are different, their ultimate objective is to enhance business performance.
What is the Difference Between Transactional Marketing and Relationship Marketing?
The key difference between transactional marketing and relationship marketing is that transactional marketing focuses on the effectiveness and capacity of sales, whereas relationship marketing focuses on keeping long term relationship with customers. While transactional marketing is a short term strategy, relationship marketing is a long term aspect.
Strategies like advertising and promotions are used in traditional marketing, while relationship marketing is focused on enhancing and creating a permanent connection with its customers. According to marketing consultants, relationship marketing can easily capture a competitive advantage than transactional marketing. Another difference between transactional marketing and relationship marketing is that transactional marketing does not focus on customer loyalty and repetitive purchase of the same customer while relationship marketing does. In addition, relationship marketing strictly believes that loyal customers are extremely valuable to a business than attracting new customers, whereas transactional marketing only focuses on sales uplift.
The following infographic summarizes the difference between transactional marketing and relationship marketing.
Summary – Transactional Marketing vs Relationship Marketing
Transactional and relationship marketing are just two ways of marketing. The key difference between transactional marketing and relationship marketing is that transactional marketing focuses on short term sales boost, whereas relationship marketing focuses on long term customer connection with the business.
Reference:
1. “What Is Relationship Marketing? – Definition from WhatIs.com.” SearchCustomerExperience, Available here.
2. “What Is Transactional Marketing? – Definition from WhatIs.com.” SearchCustomerExperience, Available here.
Image Courtesy:
1. “4Ps” By I, WikiFB3 (CC BY-SA 3.0) via Commons Wikimedia
2. “1433642” (CC0) via Pixabay