What is the difference between transactional and relationship marketing?

All marketing strategies aim to increase sales of products or services. Each method is different.

Each eCommerce company has a different definition of success. The more products you sell, the more successful your business will be. Marketing strategies all take into consideration the same factors: Who is your target audience and how much money and time you are willing to spend. Marketing strategies aren’t a one-size fits all. Different brands have different goals and values.

This article will discuss two popular, but seemingly opposing marketing strategies: transactional and relational.

What’s transactional marketing?

Transactional marketing is about selling as many products to as many people as you can. Transactional marketing aims to increase sales by continually appealing to new customers rather than encouraging repeat purchase from the same customer like in relationship marketing.

What is relational marketing?

Relational marketing is a strategy for marketing that focuses on long-term relationships and repeat customers. Relational marketing, as the name implies, focuses on building relationships and investing in recurring revenues instead of just one-off sales.

Benefits of transactional marketing

Transactional marketing is about making the next sale, not building relationships with customers.

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Three distinct benefits come with transactional marketing:

  1. Revenue increase. Transactional marketing is all that is needed to make a sale. The most important benefit of this is the revenue generated from new customers.
  2. Inventory turnover. It can be expensive and time-consuming to manage inventory. Transactional marketing is a way to make as many products as possible fly off the shelves quickly.
  3. Less expensive. Because the primary goal of transactional marketing is to sell, they are more affordable. They can be run for shorter time periods and targeted to reach as many customers as possible.

The advantages of relational marketing

Relational marketing is all about building strong relationships and customers. It offers many unique benefits in terms of customer satisfaction as well as revenue.

Relational marketing has many key advantages:

  1. High ROI. Acquisition cost are constantly on the rise. It’s much cheaper to keep your existing customers than to find new ones. Your customers will return to you more often if you invest in them. Brands have a 70% chance to convert existing customers.
  2. Increase brand awareness. Customers are more likely to spread the word about you. Your brand will be talked about by them on social media and among their family and friends. You can get customers to review your brand and leave feedback on your social media.
  3. Increase customer satisfaction. You can learn from customers’ feedback. Loyal customers will leave feedback more often, which can help you learn so much about your customer base, what they like and don’t like, and what you should do. Knowing what your customers want is a better way to please them. It also makes it easier to understand what they are expecting from you when they communicate with us.
  4. Customer loyalty and repeat business. Customers who like your products will be more loyal and likely to return to your store time after time.

Relational vs transactional marketing

Which marketing strategy is more effective? What can we do to compare them? It turns out that it isn’t so easy.

It is a fact that no business can survive without a successful transactional marketing strategy. It is important to always sell more. While it is true that customer acquisition costs are increasing, it is also true that you cannot plan a successful marketing strategy if you don’t have it. Relational marketing is an important source of LTV, and ROI.

It is possible to build a strong relationship with your customers, which will help you to get them to buy your products again, engage with your campaigns, or even become brand advocates. almost 60% of loyal customers prefer to wait for their products to be back in stock at their preferred brands than shop elsewhere.

There are many ways that brands can establish strong relationships with their customers. The most obvious is loyalty programmes. A staggering 83% global consumers believe loyalty programs influence their decision to purchase again from a brand. More than half are willing to wait until their favourite products are back in stock before they buy them from another brand.

Revolution Beauty launched RevRewards, a loyalty program that increases lifetime revenue and average order value . These amazing numbers can only be achieved when a brand invests in its customers.

Subscriptions to products are another way for brands to build lasting relationships. Subscriptions are increasingly popular in the eCommerce world. According to Shopify, 75% will offer subscriptions by 2025. Customers today want convenience and subscriptions provide that. Shoppers can forget about stocking up, and instead have the added benefit of seeing the latest package every time it arrives at their door.

Subscriptions are convenient for customers, but also for the brand. A subscription option allows brands to keep in touch with customers at regular intervals and generate a steady stream recurring revenue. Till You Collapse, for example, saw a 3x increase in subscribers after it implemented subscriptions within 3 days.

Which strategy should your brand choose

There is no one right answer. Transactional marketing should be part of your overall marketing strategy.

Customers are increasingly looking for brands to trust and connect with. Relational marketing and customer retention have become a major focus. You need to give your customers what they want in order to reap the benefits of that extra mile they are willing to take for their favorite brands.

source https://www.yotpo.com/blog/transactional-vs-relational-marketing/

How to add subscriptions to your business
Without the Hassle

Understanding subscription eCommerce servicesLet’s begin at the beginning: What is a subscription?

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Subscriptions are not a new concept. For generations, we have had newspaper and magazine subscriptions. Maybe you were given a subscription for the magazine or the fruit of the month club during the holidays.

eCommerce subscription services look similar to traditional retail, but they can only be purchased online. You can set up products or services to be ordered and delivered on a regular basis. This could be monthly, weekly or seasonal. The payment is made and the products shipped automatically. Customers often receive a discount for repeat and reliable purchases.

Types of subscription models


Replenish can be used for products with a high consumption rate such as office supplies, health and beauty products, food and food. Amazon’s Subscribe & Save is a well-known example. However, many companies also sell specific items such as pet toys and shaving supplies. One third all subscriptions follow this replenish model.


The Curation is the most used model, accounting for 55% all subscription services. It is based on the desire of shoppers to discover new things. A company will usually ask customers to take a quiz about their preferences. They then send a selection of items that are based on the buyer’s preferences. Each new box, and customer feedback, makes the selection more personal.


The third model is Access. Customers get access to exclusive products at a discounted price. Access can be found in brick-and-mortar warehouse clubs such as Sam’s Club, BJ’s and Costco. Online examples include Grove Collective and Thrive Market. Access accounts are only 13% for subscription services.

You need to be aware of the subscription terms

We now have a good understanding of subscription services, and the three most popular types of subscription models. Let’s discuss the terminology that marketers use to describe their subscription offerings.

  • AOV The average value shows the average dollar amount a customer spends each time they place an order on your mobile app or website.
  • CAC – Customer acquisition costs are the cost of acquiring one customer.
  • Churn rate: This refers to the percentage of subscribers who cancel their subscriptions within a specified period.
  • CLTV – The customer lifetime worth refers to the amount of revenue that you can earn from customers throughout the account’s lifetime.
  • Customer Portal – This secure hub is located on your eCommerce website and allows your customers to easily access all information regarding their business.
  • Merchant Portal – This online tool allows you, as the merchant, manage your subscriptions, make discounts, and adjust your customers’ accounts.
  • Recurring revenue: This refers to the percentage of a company’s revenue that is expected continue month after month. Read our guide to learn more about recurring revenues.
  • Subscription Management – This is how you manage your customers’ subscriptions, and make sure they have a great experience using your product or service.
CHAPTER 02The 5 top benefits of adding a subscription to your eCommerce business

Subscription-based businesses are booming. This model has many advantages. Let’s look at the top five benefits of adding a subscription platform for your eCommerce business.

More reliable sales metrics

Subscriptions can help you get a better understanding of your future sales, revenue and inventory. Your customers “opt in” for a certain period of time to your service. This makes it easier to predict how many customers you will have each month, and what products they will purchase.

This knowledge will allow you to better understand your inventory requirements and your retention rate. You can then focus your attention more on acquiring new customers and less on managing inventory and payments.


Subscriptions are more retention-driven than acquisition-driven. Subscriptions offer more stability because you have a 60%- 70% chance of selling your product to an existing customer.

Loyalty to a brand

Customers will appreciate your brand and understand it better as they continue to use your products and services. If they are satisfied with what you have to offer, they will return for more. Customers end up investing in companies because they know their preferences, especially with the curation model. This gives you the chance to cross-sell and upsell to existing customers.

More engagement opportunities

Engagement with customers is crucial in this age of instant access and social media. There are many ways to engage with customers through subscription models.

The replenish model allows you to remind customers when their subscription is due. This can be a chance to teach them how to use the product and improve the subscription’s longevity. You can also encourage customers to review and provide feedback on the products, which will help you better understand their needs. You can also share with customers the member-only benefits of their subscriptions with the access model.

Every model has the potential to improve your customer relationship beyond the transaction.

source https://www.yotpo.com/how-to-add-ecommerce-subscriptions/

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