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What is transactional marketing, how do you use it?

Transactional marketing takes place between a business professional and a customer.Their union is because of a "transaction" that has taken place.Transactional marketing is much like promoting your business by "word of mouth."The idea is that you develop an image for yourself as a professional and that the effort that you put into the development of that marketing relationship is dependent on the amount of the transaction.

Transactional marketing relies heavily on one's ability to deliver the marketing verbally.Relationships generated by transactional marketing could be passive or long-term in nature.Obviously the latter is desired as a loyal customer will help you in your job of marketing by promoting your service and highlighting a positive relationship.

Transactional marketing tends to put a value on each customer that is relative to their transaction frequency and amounts.

One business field where transactional marketing is used frequently is by real estate professionals. Real estate professionals will communicate their successes with others.They not only do this verbally, but they have developed what they call "Just sold" and "Just listed" postcards that are designed to promote property to potential buyers.These postcards are sent to individuals in the real estate agent's "Sphere of influence."This sphere of influence consists mostly of those past and current customers involved in the agent's realm of transactional marketing.Other individuals likely to become a target for transactional marketing include geographic or demographic groups in which a real estate agent has an interest in gaining market share advantages.

Transactional marketing is something that marketing managers are trying to move away from.Relationship marketing is being pushed harder than transactional marketing for some specific reasons.Relationship marketing has the potential to earn a greater increase from customer revenue than does transactional marketing.

Transactional marketing focuses more emphasis in gaining the respect and developing a relationship with the frequent and financially resourceful.In other words, in transactional marketing it is better to market to a customer with a lot of money versus a customer that frequents your business less and contributes less to your bottom line.Relationship marketing is growing in popularity because it exposes one very problematic flaw with the process of transactional marketing.That is that the high rollers are not necessarily the best outsource for marketing.Sometimes your wealthier customers expect certain treatment and to be given services for free.Sometimes these transactional marketing magnets are actually so picky that even your best services are criticized.

What does all this mean?Instead of simply researching a customer's purchasing patters and making marketing decisions on those facts alone, the relationships that exist between buyer and vendor are very important.Customers should be segmented and selected on the basis of relationships and rather than by the size of their transactions.Additionally, transactional and relationship marketing brings up the point that it may not be worth the effort to be trying so hard to attract customers that are not going to be profitable.

Transactional marketing is counter intuitive in that it encourages the customer to spread their business between many competitors in order to receive as many benefits from each as possible.Businesses obviously want customers to patronize their establishment because the customers want to do business with them, not because potential buyers have a hidden motive of getting as much as they can out of each business that they visit with.With relationship marketing the customer is encouraged to commit to long-term and loyal relationships with vendors.In doing so, the customer is rewarded with highly personalized attention and service and the vendor benefits from the marketing of a satisfied customer who will most likely bring more customers to their business.

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