Transaction oriented marketing and relationship program

Difference Between Relationship Marketing & Transactional Marketing |

transaction oriented marketing and relationship program

Transaction oriented marketing is a strategy that focuses on the increase of to build brand loyalty through the use of membership programs, loyalty rewards and in a mutually beneficial relationship for both the consumer and the business. An alternative to the transactional model, relationship marketing, emphasizes customer retention and future interaction with the company. There are advantages. Relationship marketing views the person behind the sale. Transactional marketing is focused on a single objective, and that is making the sale. relations, social media, newsletters, blogs, referral programs and frequent buyer incentives.

Relationship Marketing vs. Transactional Marketing | Your Business

She's turned on late-night television and immediately gets drawn to one of several televised shopping networks. The item they're selling—a kitchen appliance —looks pretty interesting, but Sally is more caught up in the countdown clock ticking off the minutes until the item is gone and the deep discount being offered for purchasing by 2 a.

transaction oriented marketing and relationship program

She picks up the phone and prepares to pay with her credit card. A few days later, Sally is at work, where she's in charge of purchasing new computer equipment for the retail stores inside her territory.

Since she makes frequent purchases and will be buying 50 machines during this purchase, she has access to a special online store for high-volume customers. It enables her to convey her specific tech needs to the manufacturer, while getting her frequent buyer discount and bypassing some of the headaches of dealing with a typical website.

transaction oriented marketing and relationship program

Sally is happy to use this new system because it's quick and easy, so she returns to it over and over. At first glance, it might look like Sally just likes buying stuff. But, let's look a little deeper. Each of these purchases has its place in a marketing strategy, helping to accomplish the goal of the business behind it.

transaction oriented marketing and relationship program

One is clearly focused on making the most sales as quickly as possible, while the other is based on building customer loyalty and convenience to help create repeat customers.

Can you identify which is which? These strategies can be separated into two categories of marketing: What is Relationship Marketing? Relationship marketing is a strategy in which businesses work to build and establish long-term relationships with their customers.

Instead of focusing on selling one product or having one interaction, brands that engage in relationship marketing are focused on efforts to build bonds and loyalty between the business and its audience. The distinctions between transaction marketing and RM already highlighted, together with additional key areas of difference are summarized by Kotler et al. We can see from this table that relationship and transactional marketing are different in several respects.

Relationship marketing and transactional marketing compared and contrasted Marketing Management

But why has RM emerged and what has given rise to this paradigm shift in the concept of marketing? However, as Lancaster and Massingham12 point out, the growth of RM has more pragmatic causes.

transaction oriented marketing and relationship program

Put simply, they assert, both marketer and customer have increasingly recognized that relationship marketing, and in particular the requirements needed to develop effective relationship marketing such as the building of strong trust and confidence between the two parties, the exchange of information and effective communication, and mutual support, simply makes good sense.

In particular, this commonsense approach concerns the building of strong trust and confidence between the two parties, the exchange of information, effective communication and mutual support, and this can only be good for business relationships.

For example there is a whole network of parties involved in the chain of supply, manufacture and marketing including raw material suppliers, suppliers of finance, distributors and intermediaries and a whole array of service agencies like advertising and market research agencies. The suggestion is that we plan marketing strategies around the whole network of supply and marketing. Perhaps this explains why RM first began to emerge in B2B markets, where it was readily seen to make good commercial sense in terms of improving customer retention rates.

Estimates vary, but on average it can be up to six to eight times more expensive to create a new customer than to keep an existing one.

What Is an Example of Transactional Marketing? |

For the marketer, building long-term relationships with customers can lead to substantially lower marketing and other costs, e. Selling costs can be lower, particularly in B2B markets where salespeople spend less time having to prospect for new customers.

Both implicitly and explicitly, RM focuses on customer retention. As we have seen with customer service, companies have realized the financial value of keeping customers and the life-time value of loyal customers is huge. This recognition of the financial pay-off of building long-term, lasting relationships with customers is now increasingly recognized in consumer goods markets.


This can substantially help reduce the time, effort and risk in making a purchase. In addition, many RM campaigns used in consumer markets involve some sort of financial inducement for the customer to become involved in a long-term relationship with the marketer — loyalty cards, air miles and bonus points are examples of inducements designed to encourage the customer up the ladder of loyalty.

RM would not have increased if there were no benefits for the customer. Again, in the case of B2B customers these benefits are readily identified and easier to communicate as they are principally financial in nature, e. Through RM, companies are able to develop collaborative ventures with customers or suppliers with regard to developing new products. Clearly, JIT and collaborative new product development require long-term relationships between customers and marketers.

Overall, as one would expect from any successful relationship, both parties need to feel they can benefit if RM is to be appropriate and successful.