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Difference Between Relationship Marketing & Transactional Marketing

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

One is focused on customers; the other is focused on sales. What's a marketer to do? In this lesson, we'll talk about the basics of relationship and transactional marketing and how the two are different.

Sally Interacts with Two Types of Marketing

Sally can't sleep. 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.m. 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. 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. (Just kidding.) 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. 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: relationship and transactional.

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. How? By implementing tactics such as buyer incentives (coupons and promotions), engaging in conversations on social media, and referral programs.

Relationship marketing is a lengthier process than transactional marketing, requiring more time, energy and resources than the short-term presence of transactional marketing, which relies on acquiring new customers through completed transactions. What will you do to keep those new customers long-term, however? Ah, that's where relationship marketing comes in.

So, you can see, how relationship marketing and transactional marketing might co-mingle: new customers pulled in through transactional marketing must be nurtured through relationship marketing to keep them sticking around. Likewise, customers nurtured through relationship marketing must be targeted in a transactional sense to encourage them to make purchases and spend money.

What is Transactional Marketing?

Where relationship marketing focuses more on building connections and bonds, transactional marketing is more geared toward making a sale. This includes what some people might consider aggressive sales tactics (think ''limited time offer'' and ''call now!'') in order to complete a sale.

Transactional marketing also focuses heavily on product features and value in order to create more transactions to pad the bottom line. For example, if you've ever attended a timeshare presentation (or perhaps heard about one), you know that sales agents use intense selling tactics in order to close the deal. These sales agents aren't necessarily concerned with building lifelong relationships, but getting new timeshare owners to sign on the dotted line.

Comparing and Contrasting Styles

So, let's take a moment to get an at-a-glance view of the important points of relationship and transactional marketing:

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