Transactional marketing, long the staple of short term sales building and product placement efforts is being challenged by the benefits of the other wing of sales strategy and tactics, the consultative sales approach or relationship building. Punctuated by heavy advertising and promotion; and almost always singularly focused on price, the transactional approach has been the mainstay of marketers of just about every gadget imaginable. Built on the philosophy that throwing more of anything against a wall quickly will result in greater quantities of just about anything finding adhesion on the wall, has consistently generated it fair share of “flash-in-the-pan” results. With a goal of making as many sales as possible in the shortest time period, transactional marketing relies heavily on incentives, buzz words and the “buy now before it is gone” approach. While successfully producing optimal revenues quickly, it is dependent on favorable market conditions and is vulnerable to a competitors underselling price strategies, which ultimately results in eroding profit margins. In the technology era where a companies pre-packaged sales message can be out-clicked in Nano-seconds by better-tech’d competitors, the reliance on a transactional marketing approach is gaining a healthy reevaluation.
With the cost of a single “first sale” being as much as five times that of a repeat transaction, producers are looking to connect more directly with their customers and build relationships that go beyond the first sale. With broader, longer-term objectives, relationship marketing is focusing on consulting with prospective customers through social media interactions to determine their specific motivations in the purchasing decision making process. While price is always a factor, today’s smartest businesses understand the importance of building customer loyalty by consistently delivering on product and service promises.
According to Nagasimha Kanagal, in a recent article published by the Journal of Management and Research, “Relationships as a focus of marketing strategy aids in the understanding of consumer needs and wants, which is useful to implement profitable exchanges. Knowledge and application of relationship marketing helps in achieving customer satisfaction, customer retention, and customer acquisition.”
Relationship marketing, with its broader, longer-term goals, focus on branding, customer service and social interactions requires patience and intense organizational efforts on all things that gravitate towards achieving a customer centric approach. Committing to building on those aspects of a business relationship that occur after the sale will differentiate one competitor from another. Over time, it will result in greater market penetration, customer loyalty and profitability. How is your business building relationships?
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